The USU has existed in one form or another since 1874, which makes it almost as old as the University of Sydney itself. It owns and manages two bars, multiple food and coffee outlets, two venues and the Wentworth, Holme and Manning buildings. Yet the average student most likely will never see the management behind it, nor the issues the organisation has as a commercial enterprise. The USU turned a small profit in 2013, but ran a $1.5m loss in 2014. It needs a governance shake-up.
Compared to its peers, the USU releases its annual reports abnormally late. The 2015 annual report is scheduled for release in September of 2016. In comparison, the University’s 2015 report is due in May and presented at the AGM. The USU’s approach is out of step with pretty much every corporate enterprise that releases financials to members and stakeholders as soon as they are available.
USU President Alisha Aitken-Radburn told Honi that the Union’s accounts will be released in May (before the report), and further “aren’t actually obligated to prepare an annual report because we’re an unincorporated entity, but it has been historical practice to do one”.
Examining the report reveals more questions. 2014 – the most recent report available – disclosed a $1 million increase in “employee benefits expenses”, a $300,000 jump in “property expenses” and $200,000 in “administration expenses”. No notes were provided to explain the jump in costs.
Aitken-Radburn told Honi the $1 million growth in employee benefits was due to “CPI salary increases, award rate increases, statutory super increases and additional staff to cater for new outlets such as Courtyard.”
The property expenses were attributed to “the USU taking on more costs that were previously paid by the University under our service agreement”, while the admin expenses were said to relate mainly to the two Supreme Court cases the USU were involved in in 2014.
Though the above may be a legitimate explanation, a reader is unable to derive this from the annual report produced. Operations aside, another worrying aspect of the report is found in Note 25. In 2014, the 14 member student board was paid $110,400, while “key management personnel” pulled in $1,092,031 (including super) – up about 40,000 from the year before ($1,055,050). These numbers appear to be ridiculously bloated when compared to the University’s own key management personnel expense.
In 2014 the University earnt $1.897 billion but only paid out $4.1 million to management. That’s only 0.22 per cent of its revenue. Partly that’s because the Senate (the University’s board-equivalent) does its job for free, and partly because key management don’t cost as much as they do at the USU comparatively.
Put another way, despite earning close to 100 times the revenue the Union does, it only pays out four times more to key management. Something doesn’t add up. If there have been protests about how much management is paid at this University, then where are the protests about money being wasted at the Union?
To pay the top people at the USU, you’d need the membership revenue of roughly 16,000 ACCESS students – half the undergraduate student body. Aitken-Radburn told Honi the contrast was “just really a maths issue.”
“The University employs over 6,500 people and therefore their key management personnel will represent a tiny percentage of the total staff and therefore cost. The USU on the other hand has less than 100 full time equivalent employees and therefore management personnel represent a higher percentage of the total workforce and cost.
“It is important to note that the USU key management personnel earn significantly less than the University staff in key management positions.”
Transparency is always a key concept every Union Board election, and in this case, we need to begin having a wider investigation into how the Union’s finances are operated. In 2015, it received $3.3 million in SSAF funding, and as members, we should be knowing where our money is going.