UC Berkeley’s student union mired in financial controversy
By Daily Bruin Staff
March 3, 1996 9:00 p.m.
UC Berkeley’s student union mired in financial controversy
Transactions not in budget discovered, recovery sluggish
By Rachel Kelley
Daily Bruin Contributor
Mirroring the difficulties of the students’ association at UCLA,
UC Berkeley’s student union is facing the challenges brought on by
a $680,000 loss during 1994-95.
After an external audit revealed inaccurate inventory
estimations and poor management, UC Berkeley officials threatened
to strip the association of its student store.
Since a San Francisco accounting firm took over the union’s logs
in February of last year, it uncovered a series of business
activities not accounted for in the budget. These discrepancies
included a mandatory $61,700 payment to their university police
department for patrolling a parking garage and recreation center,
and a $35,100 purchase of 20 hand-held radios.
In response to the deficit, the audit made several
recommendations to the association including hiring a certified
public accountant, increasing student involvement, tightening
balance sheets, and an $800,000 cut in inventory to prevent an
overstocking of goods.
Since implementing these recommendations, the student union
appears to be heading in the right direction – the month of January
yielded a $228,300 net profit. If this trend continues for the
remainder of the school year, it will be the first time that the
association turned a profit since 1993.
The recent revenues have not, however, put the university’s
worries to rest. Campus administrators said they still have "grave
concerns" about its current financial status, and one university
official was quick to point out that an increase in sales for a
month does not mean an increase in profit line.
The university will be working closely with the students’
association during the recovery process.
Although the university signed an agreement in 1994 which
formally gave the union control over its business operations, UC
Berkeley Chancellor Chang-Lin Tien has the ultimate responsibility,
according to Karen Kenney, the student activities and services
director.
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