By Emma Sandri
The long-awaited Ryerson Students’ Union (RSU) “financial review” of expenditures from the last academic year shows that $99,477 could not be verified as legitimate by the RSU’s audit committee.
The approximate $99,477 is part of a lump sum of $127,000, which was found to have no corresponding receipt or invoice and no corresponding credit card expense form. According to the financial review, “undocumented transaction doesn’t mean that the money was misspent,” but it means that RSU policy was not followed. The RSU said they are still investigating how to recover funds.
The review also accounts and confirms a total of $260,000 of expenses made on three RSU credit cards—held by the former RSU president, vice-president operations and financial controller. This includes the previous expenses reported by The Eyeopener which confirmed around $697 was spent on an Airbnb and about $1,375 was spent at Nick’s Sport Shop.
According to the RSU’s “financial review,” the board and executive of the union started investigating union expenditures made from May 2018 to December 2018. The RSU retained PricewaterhouseCoopers LLP (PwC) to conduct a forensic audit.
PwC explained it was possible to review all the expenses and “supporting documents” from May 2018 to December 2018. But, because the full forensic investigation would have been expensive and taken a “significant amount of time,” the RSU asked PwC to investigate only the union’s credit card expenses.
A forensic audit, as well as sharing the results, was part of three conditions agreed upon between the university and the student union after last year’s alleged financial mismanagement. When a student asked why a forensic audit was not conducted as was required by the university at the semi-annual general meeting on Monday night, Reanna Maharaj, the RSU executive director, said she could not comment due to legal reasons.
“PwC began its investigation by speaking to key current and former RSU [executives] and staff. Because the RSU was, and is, investigating options to pursue recovery of funds, the RSU instructed PwC not to interview anyone who was impeached,” says the review.
In February 2019, then-president of the RSU Ram Ganesh was impeached at a Board of Directors (BoD) meeting.
PwC was provided with the credit card statements from May 5, 2018 to Jan. 3, 2019 and all available receipts, invoices and expense forms—as well as all available internal emails for the president, vice-president operations, vice-president equity, vice-president education, vice-president student life and events, the financial controller and human resources from February 2018 to February 2019.
Transactions from all three credit cards were reviewed and it was determined whether “credit card expense forms and receipts” were available for all transactions. PwC did not determine whether these expenses were reasonable—that was done by the RSU’s audit committee.
Breaking it down
Expenses in the audit were put into four categories: (1) the transactions listed on the credit card expense form with a corresponding receipt or invoice, (2) transactions with a corresponding receipt or invoice but had no corresponding credit card expense form, (3) transactions listed on a credit card expense form but had no corresponding receipt or invoice and (4) transactions which had no receipt or invoice and were not listed on a credit card expense form.
According to the audit, the approximate amount spend in each category is as follows:
- Category 1, $86,000
- Category 2, $45,000
- Category 3, $2,000
- Category 4, $127,000
Only expenses in Category 4 “raised concerns” to the union about a failure to follow RSU policy.
“While an undocumented transaction doesn’t mean that the money was misspent, it does mean the money was spent without following RSU financial policies,” said the union in the financial review.
The union received the PwC spreadsheet summarizing Category 4’s expenses on Oct. 14. RSU president Vanessa Henry then emailed the BoD requesting the creation of an audit committee, says the review.
While the committee determined that Category 4’s transactions breached the union’s financial policies, that didn’t “necessarily mean all expenses were improper.”
The committee wanted to determine if the expenses were legitimate expenses. To do this, they reviewed the PwC spreadsheet and the 25 vendors or merchants to whom the largest dollar-amount expenses were charged to.
The committee concluded that it couldn’t verify the legitimacy of $99,477 of the charges.
‘Disappointing decision’
They also made an additional finding during this period related to “cheque expenditures” says the review.
According to the audit, “In March 2018, the former RSU President retained a new lawyer to assist with the union’s legal affairs.” In addition to expenses for legal advice, the president approved and paid for the lawyer’s first-class trip to India. The legal and travel expenses totalled $36,000
“According to the Audit Committee Review, it does not appear the lawyer provided work product to justify these expenses,” says the review.
The RSU said they reported the lawyer to the Law Society of Ontario—which is responsible for the self-regulation of lawyers and paralegals in the Canadian province of Ontario. The society determined there wasn’t sufficient information to warrant a disciplinary action against the lawyer.
“Despite this disappointing decision, the RSU is still investigating to determine exactly what occurred, whether any of these expenses were legitimate, and, if not, if the expenses can be recovered,” says the review.
The RSU said it is still reviewing all cheque expenditures.
More to come.
Joseph Pilch
What a surprise, no charges.
Imagine that