SA press release leaves much to be desired

The Student Association has released its version of events. It reiterates the same points I have been making here about their response and stated actions.

As I mentioned on Friday, the request for an independent auditor is a non-starter. In the letter, Ms. Prahl notes that the Director of the Internal Audit division rejected it "with no reasoning provided."

Given the discussions, I can see why Director Rediske didn't bother to give a reason. From his viewpoint, he has the right to see these documents, and asking for an independent auditor to see them first is evidence that there is something to hide.

However, what really caught my attention was the statement that despite the Student Association being effectively shut down, it had "retained Attorney Teresa Rickert of the Brookfield law firm of Schmidt Rupke Tess-Matner & Fox, S.C. on Monday, October 23 to intervene on its behalf." Remember that as of Friday, October 20, an emergency Senate meeting was held for the purpose of discussing obtaining legal counsel. As there was no quorum, no action could be taken. And no new Senate meeting has occurred since then, although one is scheduled for October 29. So under what authority were they able to retain an attorney? Money coming from the Private Account in excess of $150.00 must be approved by the Senate. So are we to assume that this attorney is either working pro bono or taking a severe pay cut?

The Student Association also wants to make it clear "that SHAC [Sandburg Halls Administrative Council] and SA are two completely separate entities." However,as we have seen , checks to AcerPrudens were written from both SHAC and SA for services no one is able to verify were delivered. Both of these accounts have also been under the control of Russell Rueden at one time or another, and as such, it is worth looking into the possibility that this account has been tampered with as well. This counters the argument that "no link between the check under investigation and SA has ever been made."

The statement also says, "The execution of the search warrant [of October 23] has now completely disabled SA." However, they were able to hold an informational meeting on the day of the press release, and they are going forward with plans to have a Senate meeting on the 29th. Furthermore, someone was able to post this press release, which came out after they were "completely disabled", on the SA website. (To be fair, they have been disabled enough to prevent posting the Senate agenda, which was promised to be available after the 27th.)

Again, this appears to be a case of the Student Association hiding behind meaningless platitudes and blather, and as such, isn't worth the electrons it's being stored with.

The Administration comments

This was sent to all UWM students:

Dear UWM students, faculty and staff,


On October 21, the Milwaukee Journal Sentinel published a story about
UWM and the Student Association (SA), Student government shut down: UWM police investigating possible embezzlement.

Because we value and respect student government, we believe it is important to share with you the perspective of the UWM administration regarding current questions relating to the UWM Student Association (SA). Federal privacy laws restrict us from disclosing everything, but many facts can be shared about what has happened over the past month and a half.

At the outset, we want to emphasize that our concerns in this situation are not about the role of student governance, but rather about our obligation to ensure that all students are represented with accountability, transparency and adherence to state laws and policies. The UWM administration fully supports the right of students to independently govern themselves.

Two separate but related investigations are currently under way. Both commenced September 6, the same day a Sandburg Halls Administrative Council (SHAC) representative discovered the existence of the $10,000 check written from a SHAC account to an entity called AcerPrudens.

UNIVERSITY AUDIT

The first of the two investigations is one being conducted by the UWM Department of Internal Audit with assistance from the UW System Office of Operations Review and Audit. Its purpose is to determine whether student funds were used in adherence to state law and UW System policy. Following SHAC’s report of the $10,000 check written to AcerPrudens, the auditors reviewed SHAC’s financial records. SHAC cooperated fully with the auditors in this effort.

Related to the audit, on October 9, the Chancellor requested that the Student Association also provide UWM officials with access to its financial records, in particular those relating to an outside bank account for funds privately raised. Such an account, which does not contain state funds or segregated fees, is permissible under UW System policies.

Authority for the Chancellor’s request is found in UW System Financial Administration Policy F20 (which can be found online at www.uwsa.edu/fadmin/fppp/fppp20.htm):

All student organizations receiving Segregated University Fees (SUF) support along with any student organization using University facilities, must agree as a condition of such support or use, to provide financial records, if requested, indicating specific revenues and expenditures for the particular event for which they received SUF support or the particular event they utilized a University facility. If SUF is received for ongoing operations of an organization, the organization must provide financial records of their entire operation, if requested by the Segregated University Fees Allocations Committees (SUFAC) or the
Institution. An organization's failure to comply with a request for financial information may result in the denial of SUF support and/or use of University facilities.

On at least three separate occasions after October 9, UWM Director of Internal Audit Paul Rediske communicated with Student Association President Samantha Prahl regarding the university’s request to access all financial records relating to the outside account. On each occasion, while Ms. Prahl suggested alternatives to UWM’s review of the records, she clearly indicated that the Student Association did not intend to turn over SA’s financial records relating to the outside bank account.

In light of SA’s response, on October 20, UWM administration took action to deny continued access to the SA offices pending resolution of its request for SA records. Part of UWM’s concern has been to ensure that the records it is seeking would be secure throughout any further delay in SA’s response to the request.

Please note that UWM’s action to suspend SA’s access to university funding and facilities was intended to impact only SA. No other student organizations are affected by that action at this time.

On Monday, October 23, SA’s attorneys contacted UWM administration to cancel the scheduled meeting between SA representatives and the auditors, and to propose that the requested records be removed to SA’s attorney’s office for review at that location. This proposal was under consideration, but has since been impacted by recent events in the criminal investigation as outlined below.

CRIMINAL INVESTIGATION

The second of the two separate investigations is being conducted by the University Police Department for potential criminal violations pertaining to the previously mentioned $10,000 check.

The latest development in that case came on the evening of Monday, October 23, when University Police executed a search warrant upon the SA offices. The warrant for the search was authorized by a Milwaukee County Circuit Court Judge after being briefed on the case.

As a result of the University Police Department’s gathering of evidence, it appears that at this time there is no reason to continue to deny SA representatives access to university facilities, and we will work with SA to allow the offices to reopen.

Previously in this investigation, on September 25, information gathered by University Police was presented to the Milwaukee County District Attorney’s Office, which then requested that certain additional information be gathered. As a result, on October 4, University Police executed a separate search warrant on a private residence, in addition to the warrant executed on October 23.

University Police will use the information gathered during the two searches to determine, along with the district attorney’s office, whether criminal charges will be issued.

We will continue to make every effort to keep the campus informed as future events surrounding the investigations into this matter unfold.


Sincerely,

Rita Cheng
Provost and Vice Chancellor for Academic Affairs

I will be investigating this and commenting on this later.

UPDATE: 1:37 p.m., October 24
I will be attempting to read between the lines of this letter. The obvious part is that two separate but related investigations are happening. One is being done by the Internal Audit Division, and the other is a criminal investigation through the District Attorney's office. However, the search warrant in the criminal case has obviated the need for the lockdown of the SA office realting to the audit. This means one of two things:

1. The records of the "Private Account" believed to be in Union EG80 were not found there, thus making the lockdown meaningless.
2. The records were found and seized.

We will find out which is correct later.

Student Association not completely locked down...

The Student Association isn't completely locked out of using any facilities, as had been previously assumed. Instead, the only office for which they are not granted access is the one they hold in Union EG80, on the ground floor near the Studio Arts and Crafts Centre. That is the one which is believed to hold the records that the University Administration seeks, and as such is the only one to which SA is denied access. The Student Organization Programming Center, which is in the former SA office of Union 363, is operational, although the question of what funds are being used to pay the workers there remains unanswered at the moment.

As such, we expect the next scheduled meeting of the SA Senate to go on as scheduled (October 29, 6:00 p.m., Fireside Lounge) despite the fact that this information was actually published well in advance. Agendas are supposed to be available by Friday the 27th, and it will be interesting to see if the Financial Accountability Act of 2006 will be on it.

The letter that triggered the lockdown

In addition to Interim Vice Chancellor of Student Affairs James Hill's letter informing Student Association of their denial of service, a copy of the e-mail that Samantha sent to the Director of UWM's Internal Audit Deparment was posted as well:

Date: October 18, 2006
To: Paul W. Rediske (Director, Internal Audit Department)
CC: Sherwood G. Wilson (Vice Chancellor, Finance & Administrative Affairs)
Sub: Student Association Audit

Director Rediske,

I would like to make the position of the Student Association clear; it is my intention, and the intention of the Student Association, to work with the university administration to conduct an audit of our financial accounts that is both just and preserves the integrity of an independent association. A very dangerous precedent is set when an independent association is subject to unbridled intervention by a co-equal in university governance. As such, it is our hope to continue the discussion to find an amenable solution that preserves the legitimacy of our independent association.

I ask that you please work with me to develop the most appropriate solution to this situation that will satisfy both parties.

In service,

Samantha Prahl
President
Student Association

Every Student Association I have witnessed has had delusions of grandeur, but calling itself a "co-equal in university governance" is a bit much. And if they are a co-equal, how can they be an independent association?

It also seems clear to me from the tone of this e-mail that Ms. Prahl was made aware that consequences would be forthcoming before sending it. If there is a working arrangement, or if there is progress being made toward one, there is no need for such language as "it is our hope to continue the discussion" or "I ask that you please work with me". These are the words that come a person who has been clearly told that her position is unacceptable and her refusal is about to get her in trouble.

If my supposition is correct, then President Prahl had one to two days notice that something along the lines of the lockdown was about to take place. Who else knew, and what did anyone do about it? She spoke at the meeting in the garage about how much harm is being done to students by the SA office being locked down. If she could have prevented the lockdown but failed to act, isn't part of the blame for that harm on her?

The wall of silence is broken...

For more information on the campus community, visit Well Armed Sheep.

The Milwaukee Journal Sentinel has decided to report on the shutdown of the Student Association office. This article is an excellent summary of the situation to date, and it counters the assertion made by Samantha Prahl at the garage meeting of the Senate that the SA shutdown was unrelated to the embezzlement investigation.

As to the meeting itself, the meeting appears to be in violation of the SA Senate bylaws Section 6d, which states, "There must be at least 48 hours between the time the meeting is called and the meeting itself." The explanation given at the meeting was that the bylaws listed are out of date and only two hours notice is needed. If this is the case, why are the old bylaws listed (if indeed there really was a change in the bylaws)?

This is part of the history of meetings of questionable legality perpetrated by this SA administration. The Senate Allocation Committee, one of the two that allocates segregated fees, held a meeting in July where unconfirmed appointees attended to achieve quorum and pass sweeping changes that put them in charge of approving student organization charters, which has been run in the past by the Student Activities Office. The Senate meeting to approve these bylaws was never posted in the Union, where it was to be held, except on the daily event listing provided by Reservations and Event Planning Services, where it was buried with all of the other listings. Even then, that listing said that the room was reserved from 3:00 to 5:00 p.m., and when no one had appeared, a call was placed to the contact person, who told them that the room was no longer needed. As the room setup for a Senate meeting is different from normal, the REPS crew reset the room to normal. However, at 6:00 p.m., the senate came in, moved furniture around, and held their meeting anyway.

For a group that is claiming to empower the students, the actions taken seem to convey the opposite message. Meetings suddenly lack quorum when they don't need it or when people are motivated to attend, whereas meetings with no one around seem to happen. At first, I was willing to chalk this up to coincidence; now I am not so sure. And with more media coverage, there are fewer places to hide.

The next time, they'd better bring a band...

This publication came from Well Armed Sheep.

I went to the UWM Student Senate emergency meeting in the garage. The posting in the Union listed the purpose as "Discussion of Obtaining Legal Counsel". When we arrived, we got a single sheet of paper with the agenda on one side and a proposed piece of student legislation on the other side. Here is the full text of both; I will comment through parts of it, with full explanation afterward:

AGENDA
Student Association Senate
Emergency Meeting October 20, 2006 7:00 p.m.

1) Call to Order/Approval of the Agenda
2) Reports
3) New Business
a. The Financial Accountability Act of 2006
4) Adjournment

The Financial Accountability Act of 2006
(Comments in italics are mine)
Author: Sen. Daniel V. Bahr
Sponsor: Sen. Bahr

WHEREAS, segregated fee expenditures are governed by (UW-System)Financial Administration Policy F20, and

WHEREAS, the Student Association is charged with allocating segregated fees and ensuring that those fees are being spent legitimately, and

WHEREAS, the Student Association is aware of at least one illegitimate transaction that occurred at the direction of Interim Vice Chancellor James Hill between the UWM Student Union and the Department of Athletics totaling over $100,000.00, and

WHEREAS, the policy of the University, as echoed by Chancellor Carlos Santiago, is that an audit of a SUF (Segregated University Fee) department is permissible at any time under F20 and until such time as the audit can be completed the department must cease functioning (See below for explanation of this comment), and

WHEREAS, F20 allows equally for "SUFAC (Segregated University Fee Allocation Committee, appointed by the Student Association) or the Institution" to demand a financial audit, and

WHEREAS, both SUFAC and the Institution are equal in the eyes of policy F20, and

WHEREAS, SUFAC is a subcommittee of the Senate, comprised entirely of Senators, and

WHEREAS, all actions of SUFAC must also be approved by the Senate;

NOW THEREFORE BE IT RESOLVED that the Student Association is requiring a complete financial audit to be conducted on the following entities: UWM Student Union, Norris Health Center, Klotsche Center, Department of Athletics, and

BE IT FURTHER RESOLVED that the Student Association orders the operatios of these departments must cease immediately in order to comply with the University's interpretation of F20.

BE IT FURTHER RESOLVED that the Student Association empower the President to use all practical and logical means to enforce this order, and

BE IT FINALLY RESOLVED that the Student Association order the President to use any and all private funds to ensure that we effectively address the constitutional crisis facing our government.

Events of the last few days
In light of the controversy over the Sandburg Halls Administrative Council's mysterious check to Senate Speaker Russ Rueden's company, as listed in the UWM Post Blog, there have been calls to audit other records stemming from last year's administration (i.e. when Rueden was Student Association President). As part of this investigation, the University has asked for records relating to the "private SA account" from current SA President Samantha Prahl. By this, she is referring to an account that any student organization can have for funds that aren't part of segregated fees, usually through the UW Credit Union.

Prahl is refusing to release these records for fear of setting a precedent that would allow the University to examine this account any time they felt like it. The University's position is that this account is a legitimate part of the audit per the Policy:

If SUF is received for ongoing operations of an organization, the organization must provide financial records of their entire operation, if requested by the SUFAC or the Institution. An organization's failure to comply with a request for financial information may result in the denial of SUF support and/or use of University facilities.

--UW System Financial Administration Policy F20, Section II.

Therefore, since Ms. Prahl refused to release the records for the "private account", the University invoked the "failure to comply" clause and
denied Student Association the use of its University office.

This proposed legislation is an attempt to respond in kind. If failure to respond to all of an auditing agency's requests is enough to order their denial of University space, then the Student Association can do the same thing by demanding that other organizations submit to an audit. This, however, is flawed on the following grounds:

1) The policy states that the SUFAC can request the financial records, not the Senate that appoints them. While actions of the SUFAC may be subject to Senate approval, there has been no meeting by the SUFAC itself to request this audit.

2) The wording of the policy does seem to favor the University position. It does state the organization "must provide financial records of their entire operation" if requested. The fact that some of these records are not of segregated fees does not seem to be an issue.

3) This move appears to be one of retailation, not of legitimate concern. The alleged illegal transaction is one that has been a part of student government here for years. Back in 2002, money was taken from the Union budget (which makes money from its dining services) and moved to the athletic budget with the full support of the student government at the time. (They even used these payments to demonstrate their commitment to athletics on campus.) Samantha Prahl's claim is that these transfer payments continued without student approval in subsequent years. While I have found no votes to authorize this continued use of funds, neither have I found any votes to disallow it either. Anyone with information one way or the other on this is encouraged to share it with me.

It seems to me that the Student Association is taking an open secret (Union funds being used for athletics) and using this as a pretext to close the entire school. Even so, the question of whether other student organizations on campus are similarly shut down remains. Stay tuned for more details.