The university has set aside money to repay the Tufts Community Union (TCU) Senate — possibly before an insurance check comes in — for funds allegedly embezzled from the group, Tufts' Vice President for Finance Thomas McGurty told the Daily. But the full details are only surfacing now that a cloud of miscommunication hanging over the Senate and various departments within the administration has broken.
TCU senators will receive the funds as soon as the university works out a final number, which it is set to do by Oct. 1.
McGurty, who is also the university's treasurer, said that his office, banking on getting an insurance payout, has already recorded the expected payment in its books and has transferred the money to an account for student groups. "I have money sitting in an account to cover any [TCU Senate] request," he said. The money comes from the university's cash reserves.
Director of Public Relations Kim Thurler said that Tufts is handling the payout to the Senate separately from the insurance check, which could reach the Hill as early as this month.
"The status of the insurance settlement has nothing to do with the funding of student organizations. The insurance settlement is a university claim and will be managed accordingly," she said in an e-mail. According to Thurler, the funds have been ready for the Senate since June.
TCU Treasurer Matt Shapanka said that he is happy with the commitment, but that it came only after a long process marked by gaps in communication.
Shapanka said he had not been able to get the university to confirm the existence of the funds until yesterday, despite repeated inquiries.
"I don't want to accuse them of anything, but they haven't been actively talking to me. I've had to go to them," he said before learning officially about the money.
But he said that he feels better after talking with McGurty yesterday. "He was very helpful and very straightforward," Shapanka said.
Meanwhile, the TCU Treasury has already set up an account anticipating the recovered funds and has overdrawn it by around $190,000 in order to pay a debt to the university. The debt stems from accounting problems; in the past, money that should have been used to pay the university for interdepartmental payments and expense transfers never left the Senate's Citizens Bank account. Shapanka said this is because the Senate did not know it owed the money, and the university wasn't asking for it. Tufts only requested the payment when the Senate closed its Citizens account and officials realized that the debt existed.
Had the administration requested the funds earlier, the Senate may not have had enough money in the Citizens account to pay, since, according to Shapanka, it was a major source for the embezzlement.
"If the university had asked us to pay the cash," it may not have been there, Shapanka said, "because it was being stolen."
The Senate's available funds will be further depleted when it forgives the debts of student organizations affected by the alleged embezzlement. Combined, 30 student organizations went $181,556.04 into the red during the 2007-2008 academic year, but only some of this debt is tied to the allegedly embezzled funds.
During its first meeting of the school year on Sept. 21, the Senate plans to formally forgive its own debt of $67,851.20, as well as the $44,488.03 debt racked up by the yearbook and the $20,930.21 debt accumulated by TCU Operations. Shapanka does not expect any opposition to this. "The Senate will certainly forgive debts that were the result of embezzlement," he said.
Senators will also make the rare move of considering forgiving the debts of groups not affected by embezzlement. The Programming Board went $27,937.41 into the red during the last academic year, in large part because of administrative confusion that was beyond the board's control and unrelated to the embezzlement scandal, Shapanka said. He supports erasing the debt because of the board's utility on campus.
If the Senate does not forgive the board's debt, "then programming at Tufts would grind to a halt," he said. "So that's just a practical consideration."
A similar situation has arisen in the case of the $104.47 debt that the Elections Commission (ECOM) incurred. "We need elections and I don't want to hamstring ECOM's ability to hold successful elections," he said.
The scandal that prompted discussion about pumping funds into the Senate began in November of last year, when the administration fired former Office of Student Activities (OSA) Director Jodie Nealley amid allegations that she had embezzled about $300,000 from the university. She and Ray Rodriguez, the OSA's former budget and fiscal coordinator, have been indicted for skimming a combined total that approaches $1 million.
The administration's offer to advance money to the Treasury for allegedly embezzled funds was first presented during the aftermath of Nealley's firing. Tufts officials said they would make money available if student leaders needed it to ensure quality programming.
But Shapanka said that until yesterday, nobody from the administration had repeated that offer to him this academic year, and that he had been under the impression that he would have to wait for the insurance payout.
The process created confusion within the administration as well. Marc Miller, the director of administration and finance for the School of Arts and Sciences, told the Daily late last month that university officials were considering dipping into cash reserves to make money available for programming before the insurance payout comes in.
"I think we may just do a book entry and book a liability," he said. "There is clearly a sufficient amount of money in reserve to cover that."
But that had already been done, according to McGurty. "I recorded a receivable and I put that money into the account," he said.
Meanwhile, McGurty, who had said that he was able to speculate about whether the university would get an insurance payout, old the Daily on Tuesday that he is confident that it will come in.
Assistant Public Relations Director Suzanne Miller confirmed that the funds have already been set aside and said that the administration is coordinating the repayment effort with student leaders. "The university is working with student Senate officers to determine the appropriate way to restore the funds," she said in an e-mail.
Currently, it is unclear exactly how much the university owes the Senate. Officials should have a final number within the next few weeks. Shapanka said that while he understands that figures are currently speculative, he would have liked to have seen more updates along the way.
"I understand that they don't want to give me a final number until they have all their ducks in order, but I wish they would have given me more information," he said.
Shapanka expects to eventually recover more money than the amount by which the Treasury overdrew the account set up for the funds. He said that in the meantime, despite having to overdraw and forgive debts, programming has not suffered.
According to Shapanka, the Treasury's financial situation is looking good, especially after he deposited the approximately $1.3 million generated by this year's Student Activities Fee.
"We can fully fund all student programming with funds to spare," he said.
