The University’s Undergraduate Finance Board is more important than it sounds. As the student government branch responsible for coordinating funding across undergraduate student groups, UFB finances everything from Senior Week to Brown Outing Club hiking trips to Spring Weekend.
Unfortunately, UFB has not been measuring up to the magnitude of its responsibilities. As many students are aware, the board made substantial budget cuts to student group funding in the face of cash shortfalls. How we got here is unquestionably the result of poor decision-making from the board as a whole. We should take time to understand what went wrong and reflect on how we can prevent financial mismanagement from occuring in the future.
The root of our current predicament dates back to 2020 when UFB discovered something miraculous: Newly accessible financial records showed the board had accumulated over $1 million in budget surplus. This number far exceeded their permanent target surplus of $300,000, which they typically aim to keep as a buffer against unexpected emergencies.
It puzzles me that the University did not provide adequate information to UFB about its own finances — and that UFB’s accounting system did not allow a high-level look at those finances. Regardless, the unexpected fortune put the board in an excellent position to improve funding for the foreseeable future. At the time, UFB had promising options. They could have gradually spent the surplus over several years, using it to pad additional spending needs. This strategy would have mitigated budgetary issues for class years well into the future. Alternatively, they could have set up a small endowment, investing the surplus and drawing on its interest to support the budget in perpetuity. If allowed by UFB rules, an endowment would have provided a permanent new revenue stream. Perhaps they could have set a higher target for the emergency fund to account for inflation over the past several years.
Instead, after two years of COVID-induced waiting, UFB decided to exhaust the entire surplus in the 2022-23 academic year. Spending surged from $2 million to $3.2 million, rising higher than even they had planned because of inaccurate projections. The entire emergency buffer was depleted, forcing UFB to replenish it this year through budget cuts.
Without a deep understanding of UFB's financial situation, it's difficult for us to know what the ideal plan would have been. As the experts, the board’s membership should have put in the effort to identify that plan. Instead, it seems they implemented something that was both short-sighted and poorly executed.
Everyone will be paying the price this year. As previously reported by The Herald, many clubs and organizations received significantly less funding than normal. Brown Mock Trial has been withdrawing from tournaments due to travel costs. Swing Club may be forced to cancel its Winter Ball. And Spring “Weekend” has been shortened to a single day with a budget for artists that is less than half of what it was last year.
What I find most perplexing about this affair is that UFB has portrayed it as a success story. When interviewed by The Herald, UFB’s president said that they “need(ed) to do this massive stimulus in order to get people involved in clubs and get clubs to flourish as much as possible.” He went on to say that “the stimulus was very successful, and we are (now) in a belt-tightening era.”
To me, “very successful” is a stretch. It’s undeniable that clubs are in a bad situation today because of the decisions UFB made last year. Student groups had no way of anticipating that their budgets would drop precipitously. Furthermore, the board’s justification for spending sounds less like a rigorous cost-benefit analysis and more like a guess. Why would it be beneficial for student groups to spend a disproportionate amount of funding in one specific year? After all, membership changes every year, and many groups allocate their funding to discretionary purposes like travel, events and social gatherings. I highly doubt the first-year class is grateful that so much of their club funding was spent before they even started college.
While I believe UFB should have implemented a more prudent budget last year, the purpose of this op-ed is not to point fingers. As a study abroad student in my final semester, I have very little stake in this situation. Rather, I want to highlight the obvious fact that financial mismanagement happens everywhere, all the time, often with consequences far more severe than this. Grand episodes of financial fraud are easy to condemn, but quieter instances of poor decision-making and negligence matter too; both can cause profound harm. Whether it's at a local non-profit or a major institution, many of us will one day have influence over these decisions. The onus is on us to ensure our choices are thoughtful, informed and transparent to the people we serve.
Corey Gelb-Bicknell '23.5, a former Herald section editor, can be reached at email@example.com. Please
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