The San Jose State Associated Students board of directors approved financial audits for the 2019-20 fiscal year, recommended more thorough screenings for outside organizations that offer services to SJSU and discussed possible changes to the SmartPass Program during Wednesday’s meeting.
Every summer, A.S. finances, expenses and revenues are evaluated by an independent financial auditor who compiles a report for the directors to review, according to the 2019-20 audit report.
The financial auditor investigates financial statements in the A.S. budget. The report states auditors assess the appropriateness of accounting policies used by A.S. and offer their recommendations to improve future financial transactions.
A.S. financial audits are performed by RSM US, an outside audit, tax and consulting organization.
James Westbrook, A.S. associate executive director and finance and accounting manager, said the auditors recommended the administration and finance division should conduct more extensive background checks on vendors who want to sell their services at SJSU. This would be to ensure there are no conflicts of interest with A.S. board members.
A.S. Controller and Chief Financial Officer Flor Sario asked why the auditors made the recommendation.
“Does A.S. have a tendency of [having conflicts of interest with vendors]?” Sario asked. “Why was that pointed out as something we need to do better off?”
Westbrook said the board currently doesn’t have conflicts of interest with vendors, but auditors recommended more background checks as a precaution. It's a conflict of interest if an A.S. member favors or benefits from a vendor who wants to offer their services to SJSU, according to the university’s finance policies and guidelines regarding conflict of interest.
Westbrook said there is a lack of formal background checks conducted on vendors to ensure they have no affiliation with A.S. members.
“This is something (to ensure) the best practice that we really haven’t employed over the years,” Westbrook said.
SmartPass program
A.S. Director of Academic Affairs Anoop Kaur asked A.S. Executive Director Carole Dowell if A.S. will have to negotiate for more SmartPasses for students once more in-person classes resume.
The program provides students, faculty members and staff with unlimited low-cost rides on the Valley Transportation Authority (VTA) according to the SmartPass page.
Dowell said that in the spring, SJSU Transportation Solutions, a subgroup of A.S., negotiated a contract with the VTA so it could pay a reduced fee for students. She said A.S pays the VTA before the semester for the projected number of passes for students and faculty members. A.S. went from paying for 32,000 passes to just 19,000 passes because of the decrease in students attending in-person classes. As a result, the cost of the program decreased by $262,000 in 2020, according to the audit.
After the coronavirus pandemic, A.S. will go back to funding passes for all students according to the A.S. website. Dowell said if student enrollment increases in the future, along with VTA fare rates, A.S. may be forced to dip into its reserves to continue funding the program.
The VTA implemented a 5% fare increase in January 2019, resulting in SJSU having to increase its per-enrolled-student rate from $38 to $40. According to the report, any additional increase in VTA fares might affect A.S.’s ability to “fully deliver” the SmartPass program.
“We have to make sure (right now) that our finances are ready, including our reserves,” Dowell said. “If those increases happen, [then] we are prepared for it. We can still react and be in a good position.”
