Editorial | A moratorium on mismanagement

History has repeated itself at Penn — it’s written all over the Student Activities Council’s balance sheets. Two weeks ago today, SAC issued its second moratorium in less than two years to tackle mounting debt among 48 student groups. The policy prevents new groups from being recognized and receiving funding.

Beyond the obvious drawback of preventing new groups from enlivening the extracurricular scene, the moratorium is an embarrassment to Penn. Fifteen of the offending student groups have incurred more than $1,000 of debt over the last year. The biggest debtors — Alternate Spring Break, Penn Review and the International Affairs Association — are among the most prominent student groups on campus. Their leaders have set a poor example by mismanaging finances. They stand in stark contrast to SAC-funded groups like the dance group, City Step, which went line by line to make sure that its expenses did not exceed its budget.

SAC’s leaders have also failed to instill the importance of fiscal responsibility in the student groups it funds. They have forgotten to glean key lessons from an identical moratorium that was put in place between January and September 2011 to tackle debt that had accumulated over several years — a moratorium that was lifted once SAC absolved groups of all historical debt.

In an editorial last September, The Daily Pennsylvanian acknowledged the need for SAC to correct its mistakes by canceling student groups’ debt.

We acknowledged that it was unfair for current student leaders to be penalized for their predecessors’ wrongdoings, but also that student groups should be held accountable for the health of their finances. Most importantly, we saw this as an opportunity for SAC to enforce more stringent repayment policies and system of sanctions to deter groups from overspending.

SAC’s current debt policy — which redirects student group’s budgets and encourages greater administrative oversight in an effort to help groups remain out of the red — has failed spectacularly. A possible reason is that student groups’ accounts are only suspended when they overspend by more than $9,000.

Groups also face a 5 percent budget cut for every $1,000 of debt that they incur and, under new rules, only have to present a plan to repay their debt by SAC’s next general body meeting on Oct. 25 if they owe over $2,000.

SAC Chair and College senior Melissa Roberts has already told the 48 groups that they have until the next GBM to repay their debt or face sanctions. However, SAC’s penalties have proved to be utterly inadequate.

Tougher sanctions must be put in place. SAC should use its meeting in two weeks to reevaluate its current policy and consider our suggestions. SAC should not reimburse groups’ expenses until they have repaid all their debt or demonstrated a clear plan to repay it. Additionally, groups currently in debt should suffer a cut the next year that represents the dollar amount they owe.

While SAC’s effort to train treasurers is commendable, more must be done to rid the University of its debt culture. It’s not enough to send a monthly email to leaders. As future leaders of this country and the world, we need develop a culture of fiscal responsibility. What better place to begin this than at Penn?

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