…too bad this is real life

Further developments in the student society world have again raised questions about accountability of the Canadian Federation of Students (CFS).

Recently, documents from 2003 were leaked on the Internet. The memorandums from Judy Guthrie, the former University of Victoria’s (UVic) Student Society (UVSS) divisional manager, read “Last year the CFS was good enough to support the UVSS with a $350,000 loan during a particularly difficult cashflow period.”

This $350,000 loan is something the UVSS’ Board was unaware of.

However, the documents alone are not enough to support this allegation. Kelsey Hannan, a Director-at-Large for the UVSS, said, “we are still looking into it.

Marne Jensen, the General Manager for the UVSS, said the $350,000 figure quoted in the memo was from not paying the CFS fees in combination with not paying the premiums.

She also said it “was really unfortunate” of the memo to use that language, referring to the use of the word ‘loan’.

“We were managing a very tight cash flow situation,” she said, “and it looked like we were going to run out of cash.”

The “tight cash flow situation” was caused by a previous business manager stealing from the UVSS and committing fraud. The incident left the UVSS with losses totaling over $600,000, in two years.

The UVSS has a health and dental plan offered by the CFS-Services through Greenshield, a non-profit provider. In order to remedy the cash flow situation, Jensen stopped paying the health and dental premiums, which totaled “a very significant amount of money”. The UVSS was negotiating a loan with the UVic at the time, in order to regain financial stability.

Soon after the UVSS stopped paying the premiums, Jensen received a phone call from Philip Link, the CFS-Services Executive Director, about the issue.

“I had a conversation where I assured the CFS that we would be in a position to pay our Greenshield bills in a reasonable timeline,” said Jensen.

“As far as I have been able to find out,” said Dylan Hardie, another Director-at-Large for the UVSS, “there were no repercussions [of not paying the premiums]. The assumption [is] that [Link] talked to them and bargained or something and they agreed to accept the late payment.”

Hardie suggested that one reason there were no repercussions from the health insurance company was because they did a lot of business with the CFS.

“Is that a healthy relationship to have with a health company?” Hannan asked, suggesting the UVSS take a more “arms’ length approach” with them.

There is still debate over whether or not this transaction can be defined as a loan between the CFS and the UVSS. The CFS has not yet responded to the allegations, said Hannan.

The CFS was unavailable for comment before press time.

“Theoretically, it’s possible that the CFS paid an installment, or paid the interest, it’s possible that they paid the installment and then [Greenshield] reimbursed them. This is all possible, but from our records, it doesn’t show any of that,” said Hardie.

Jensen is surprised that people are questioning the cashflow management strategy from eight years ago.

“I am not aware what transactions happened between the CFS and Greenshield, but I still don’t understand how that would turn it into a loan.

As a parallel, a few years later the Douglas Students Union (DSU) also found itself short on cash. They too had to stop paying their health and dental premiums, but in this situation the CFS provided a $200,000 loan to the DSU.

Jensen said the difference is that at the UVSS, the debt would be paid back in a few months thanks to the loan from UVic. Conversely, the DSU might not have been able to pay back their debt for a few years.

Jensen justified the UVSS’ situation saying she imagined that every student union in BC “from time to time has been late paying for a CFS-Service.”

Hannan said the arrangement made with the health insurance company may have benefitted the UVSS, “but it does call into question, especially for other members of the CFS, that their brokers could potentially be playing with their finances.”

“If it was swept under the rug, then that would have been the wrong way of dealing with it,” says Hardie, “...but there’s ... nothing to say that it was kept hidden.”

//Samantha Thompson
assistant news editor

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© 2011 The Capilano Courier. phone: 604.984.4949 fax: 604.984.1787 email: editor@capilanocourier.com