Published May 14, 2019
Sub-board 1 is a fiscal agent for seven student governments at the university. As the fiscal agent, SBI provides accounting and banking services through a centralized corporate services office. SBI’s main function is to handle funding that UB collects on behalf of to student governments. This funding comes from student activity fees paid by UB students and amounts to about $5 million annually. The student governments use the funding to manage their operations and provide programming to students.
SBI also provides several services, funded by the student governments. The SBI charges an additional fee to the student governments for these services, and this fee has been mandatory to student governments whether or not an individual student government was in favor of a particular service. These services are: a safety shuttle, ticketing for student government events, legal services, WRUB radio, gaming, dry cleaning and off-campus housing assistance. It also operates a pharmacy and administers domestic student medical insurance.
The university has a responsibility to ensure that mandatory student fees are handled properly. Under SUNY rules, every campus must formally designate a “fiscal agent” to handle student activity fees. Any entity not designated cannot legally handle student fees. SBI has never been formally designated a “fiscal agent” by UB.
The university reviewed SBI as part of a regular and on-going process to audit financial practices and financial management, including student fees. The scope and purpose of the SBI review was to assess its operation and make recommendations related to the following functional areas of SBI: administration, governance, program offerings and fiduciary responsibilities. The review assessed these areas as they relate to SBI’s ability to support the university’s goals and the students whom they serve.
The SBI review included in-depth scrutiny of its financial statements and organizational structure. The review committee held interviews with SBI staff, leaders from the seven student governments, stakeholders who utilize SBI as their fiscal agent and key university stakeholders with significant interactions with either SBI leadership or services provided. As part of these conversations, student leaders were able to express their opinions on SBI’s operations and management.
The administrative review found that SBI does not have a contract with the university to serve as a fiscal agent for student governments, and SBI isn't eligible under SUNY policy to be a fiscal agent for student governments. Under SUNY policy, only a Faculty Student Association, campus-based foundation, Research Foundation, or a contractually recognized campus affiliate are authorized to serve as fiscal agents. In addition, the structure of SBI’s board is not in compliance with SUNY policy and may be in violation of state law.
The university’s review also concluded that while SBI does provide some services that are beneficial to students, the fees charged by SBI to subsidize these services could be reduced and be used more effectively under a different structure. Moreover, student governments were required to pay these additional fees for services whether they supported them or not.
The university has appointed the Faculty Student Association (FSA) to serve as the fiscal agent for UB’s student governments. All SUNY four-year institutions, except one (which uses its Research Foundation), have designated their campus FSA as the fiscal agent to handle student fees. The transition to FSA is expected to produce significant annual savings and provide more autonomy for UB’s student governments.
The university strongly believes that appointing a new fiscal agent for student governments at UB is in the best interest of our students.
The decision to perform the administrative review of SBI was that of executive leadership at the university.
The committee was charged by Vice President for Student Life A. Scott Weber and Vice President for Finance and Administration Laura Hubbard and the committee members were chosen based on subject matter expertise.
Student governments will still maintain complete control of their funding and will continue to designate its uses and plan accordingly. As the fiscal agent for the student governments, FSA’s only role is to ensure proper and efficient disbursement of funds to the student governments according to the budget and purposes communicated by the student governments.
The university will work with the student governments to determine which SBI services are valued by students and should be considered for continued funding by student fees. Other services may be more appropriately administered by the university.
For example, UB’s parking and transportation office will explore offering a safety shuttle option for the campus, and the university will investigate ways to provide free legal counseling to students, perhaps at a location near campus or via office hours on campus. International students seeking assistance on immigration matters may be able to utilize legal service provided by UB’s International Education Office. In addition, the university will assist the student governments in transitioning to a modern ticketing operation for student events. The university will absorb the SBI pharmacy and the student medical insurance function and provide those services to students.
SBI leadership never inquired about the possibility of a contract during the tenure of UB’s current vice president for student life and current vice president for finance and administration. Furthermore, there are no records of SBI inquiring with former vice presidents about the possibility of a contract. During the university’s review of SBI over the past year, SBI showed minimal willingness to modify its operations in response to an internal audit.
Some student government leaders have expressed satisfaction with the decision and have pledged to work with the university and fellow student leaders to ease the transition to FSA. Others are concerned about a loss of autonomy and are suspicious of the change. The university hopes that over time all student governments will realize the change does not affect their ability to operate independently and provides greater transparency in the financial management of their funding.
This money belongs to the student governments; it is being held by SBI on behalf of the student governments. While the administration of those accounts will need to be changes, the balances will always be owned by the respective student governments.
An implementation committee has already begun meeting on a regular basis each week, with the goal of beginning the transition to FSA on July 1. The committee is committed to ensuring an efficient transfer to FSA over the next several months.
The implementation committee will work with the student government leadership to transition the financial function to the new fiscal agent and support the operationalization of programs and services.
The implementation committee will be comprised of staff from the university and FSA as well as student government leadership.
Historically, with SBI as the fiscal agent, student governments paid a an average fee of 18% of the total revenue allocated from the mandatory student activity fee. Under the new fiscal agent, the fee is expected to be significantly lower, producing a significant annual savings for the student governments.
Changing fiscal agents will not impact the employment status of the seven professional staff employed by the student governments nor is it expected to impact their health benefits and retirement options.
FSA has implemented substantial internal control reforms and is in compliance with all SUNY requirements. FSA will serve as the fiscal agent for the student governments and will provide the student governments with clear, transparent accounting systems with access to real-time balances. FSA will establish agency accounts for each government to transact their business. By definition, an agency account is used to receive, hold and disburse funds on behalf of another organization (in this case, the student governments). It is the expectation that Internal Control Programs would be imbedded in each student government to ensure appropriate usage of their funds and to mitigate risk of any fraud – as is required by SUNY student activity fee policy.
According to the SUNY Policy 3901 Student Activity Fees- Mandatory; proceeds of the student activity fee shall be disbursed by the student government, through the designated independent fiscal agent. SUNY Fiscal and Accounting Procedures for Mandatory Student Activity Fee Programs require a tri-partite structure made up of the student government, the fiscal agent and the campus president or designee. This document further states that the fiscal agent must be one of the following independent entities: Auxiliary Services Corporation/Faculty Student Association, campus-based foundation, or a contractually recognized campus affiliate. Since SBI is none of these things, suggesting that student activity fees remain with SBI would violate SUNY rules.