By Jessica Robinson, Editor-in-chief
It seems that this year’s SGA executives is finally following through on the association’s ever-elusive promise of transparency, by opening its books and revealing that they entered this academic year $166,771 in debt.
The 2016-17 exec actually incurred $272,960 in debt over the course of last year, and relied on the remaining assets from previous years to cut the number down by just over $100,000.
“That’s the thing, about how poorly we’ve managed our money. It’s incredibly scary.” – Roch Goulet, SGA President
Kraymr Grenke, a Laurentian Commerce student and former President and CEO of the SGA for the 2016-17 year, explained that the health plan was much more costly than the association originally anticipated.
“We want our students to use the services that we have,” Grenke said, “and unfortunately we got burnt with [the health plan].”
The 2016-17 year, the SGA switched to a new health plan with much better coverage than the previous year, which likely accounted for less students opting out, and more students making claims than originally estimated.
“The problem with health plan spending is that it’s decided for you as President,” he said. “My price [meaning the cost each student was charged for the health plan] was decided by Johnny [Humphrey, SGA President from 2014-16].”
Students claimed $1,116,897 from the SGA health plan last year, which was about $230,000 more than the association anticipated. This discrepancy became clear to Grenke early on in the year.
“I got monthly reports last year; I knew by last fall,” he said. “But at that point, there was nothing we could do about it. Which is unfortunate. From there, we knew we had to be planning for the next year. I didn’t know who the next President would be by then, of course, but I knew that part of the next year’s plan was going to have to be about paying [the deficit] back.”
The SGA health plan is run through Student Benefits. It uses a trust model, which means that SGA students contribute their fees into a pool, alongside the other 14 schools covered by the company.
“That’s the nice thing about the way that the health plan is set up,” Grenke said. “The deficit that was incurred is split with the other schools, and it’s interest-free. So there’s no burden back to students, essentially. We do have to pay that money back, over time, but there’s no banking ramifications.”
In other words, the amount SGA students overcharged the plan was covered by the pool of funds initially; the SGA is expected to cover the extra charges, but over time, without interest costing students more.
“When I left, I made sure that we were going to charge enough next year to cover the costs, and hopefully also start to pay a little bit back,” Grenke said.
The SGA has a well-known but largely undocumented history of money trouble and untraceable financial documents, and this year was no different. It is expected that the outgoing SGA president help transition the incoming president into office; and while Roch Goulet, sitting President of the SGA, did shadow Grenke for more than two months, there wasn’t much paperwork to be passed on.
“When I left, we didn’t have a finance manager,” said Grenke. “I wasn’t going to write a document on how finances were run, because I didn’t think it was run all accordingly, and I knew it would change anyways. They were in the midst of hiring someone in my last week—I think they hired someone the week after I left. So I wasn’t going to write a plan and then that plan wouldn’t be in use.”
Goulet said that coming into office while the SGA was in the process of rehiring a finance manager made the transition more difficult, by impeding his knowledge of what was happening with the association financially.
“My own follow up transition was probably the whole month of May, to catch up, just because things were left so messy,” Goulet said. “Especially because we were drafting a budget in a new format; comparing this new budget to the financials we were working with was really messy.
In Goulet’s opinion, previous execs did not allocate enough time and manpower when it came to managing the association’s money.
“I just don’t think there was enough hours and resources specific to figuring out the financial side [of the association],” he said.
“SGA had a bad history with its financials; [last year’s exec] definitely could have used that past experience to adapt. It’s unfortunate that we [the 2017-18 exec] were dealt a bad hand.”
“But we’re making the most out of it,” Goulet said, “by hiring a full-time manager for finances, as well as training myself through online classes. It’s been beneficial so far. And transitioning banks has helped a lot, now that we have better third-party communication and contact.”
Goulet emphasized that, while it did incur the majority of the SGA’s debt, “the whole deficit wasn’t fully because of the health plan.”
“They overspent by $272,960 last year,” he said. “And the amount we overspent by on the health plan doesn’t make up the whole $272 thousand. It was about $230 thousand. So that leaves $40,000 that Kraymr still overspent on other things. And that’s where we look at things like travel… It’s so frustrating.”
From the 2015-16 year to the 2016-17 year, the SGA’s “Travel and Entertainment” expenses increased by more than $20,000.
Even now, Goulet isn’t confident that the year end report accurately depicts exactly where money was spent over the course of last year.
“It felt as though last year’s budget wasn’t followed as well as it should have been. The financials are so messy. We drafted a budget, and the account lines didn’t match the financials. So in the year end report, there’s still a lot that we’re not confident belongs in x section,” Goulet continued. “We had KPMG decide where any unknown spendings fit in which account; meaning we had a third party, who doesn’t know how we run, allocate where they spent the money. That’s the thing, about how poorly we’ve managed our money. It’s incredibly scary.”
“It’s been a really frustrating process, to get our finances in order,” he said. “But so far so good. We’re really solid right now.”
“I hope that students don’t feel that they shouldn’t trust the organization because of past mistakes, because we’ve been able to make the necessary changes, to be the association that the students deserve.” – Roch Goulet, SGA President
Being in debt has affected the SGA’s spending this year, leaving less money to be allocated for events and services like the Pub Downunder. The SGA emptied the contingency fund to make up as much of the debt as possible.
On top of debt draining the SGA’s savings, Laurentian’s student enrolment hit a low this year, with approximately 800 fewer students than anticipated—meaning the SGA has fewer students paying for its services.
“We expected to have 5200 students this year and instead have 4900, meaning we have less money than we thought we would when we put together our initial budget,” Goulet said. “We’ve made the necessary changes. We won’t be laying off any of the staff and students we’ve hired. We’ve adjusted the contingency makeup, so we’re not going to be repaying our debt as much as we thought, by about $4,000. For events, and pub / voyageur café, operationally we’ve had to slow things down.”
Goulet is making it his mission to turn the SGA’s history of mismanaged money around. The SGA replaced last year’s part-time finance manager with a full-time director of finance.
“We’re really happy with our new hire and the hours he’s been able to commit, because he’s full-time. The difference between part-time and full-time is substantial,” he said.
“This year, we’ve been able to actually activate the lessons learned in past years,” Goulet said. “I hope that students don’t feel that they shouldn’t trust the organization because of past mistakes, because we’ve been able to make the necessary changes, to be the association that the students deserve.”