UCD student union racks up €1.4m debt
THE students' union at University College Dublin has run up debts of €1.4m following years of catastrophic accountancy practices.
The Revenue Commissioners, which is owed nearly €400,000 in unpaid tax liabilities, have been contacted.
A meeting at the university campus last night, attended by over 100 students, was given details of the union's deficit following a thorough audit of its financial affairs from 2007 to June last year.
It uncovered a lack of systematic book-keeping; missing bank statements, paperwork and cheque stubs; and evidence that the union had paid employees without deducting tax.
Gerry McNally, of McNally Business Services Ltd, told the meeting he had been called in to "get a position in terms of what the financial status of the union was" and to "put systems in place to make sure that the problems do not go forward".
With an annual turnover of around €4m, the union was a "big organisation by Irish standards" and included four retail outlets, Mr McNally said.
"There has been no real control of day-to-day spending."
He said his team had uncovered a "really poor, or lack of management" in financial activities.
Slides shown during the half-hour presentation cited a "lack of clarity and transparency between (union) entities" and "no formal management reporting" as well as "substandard books and records".
"We couldn't find cheques written so we couldn't find out who cheques had been written to," said Mr McNally.
There were up to 23,000 bank transactions over the four-year period and as many as 10,000 of these held no initial explanation.
While the trawl of the union's books has been completed, it must be signed off by an external accountant -- a process likely to take another two months.
It was unclear last night what action, if any, the Revenue is likely to take, although the meeting heard that the union could face interest and penalties on the €397,000 outstanding in tax liabilities.
Union shop losses over the period ran to some €358,000 and general cost overruns within the organisation itself reached €210,000.
Mr McNally said that formal structures had now been put in place to ensure that the situation does not arise again.
In the meantime, the union is facing the prospect of seeking a hefty bank loan of up to €900,000 in order to pay its bills. It is unclear what financial involvement, if any, the university has in the union's affairs or whether it will be in a position to offer any assistance.
However, referring to income received from student registration, union president Pat de Brun said: "We are in a pretty unique position because not many businesses can go in and say we have guaranteed income of €700,000 a year."