Kwantlen Student Association Votes to Revoke KPIRG’s Funding
The court case between KPIRG and its founder on hold as the group adjusts to lack of revenue
Story updated at May 17, 1:20pm.
As a result of the allegations of fraud that the Kwantlen Public Interest Research Group made against its founder and former employee, the Kwantlen Student Association has voted to revoke and hold the funding they collect from students on KPIRG’s behalf.
The KSA believes that the alleged fraud—totalling approximately $112,000—which KPIRG has accused its former administrative coordinator, Richard Hossein, of committing constitutes a breach of the autonomy agreement between the two societies. This breach led KSA Council to vote to defund KPIRG in a meeting on April 6.
According to an email from KPIRG sent on May 16, the KSA is currently holding $1,456.38 of the research group’s unremitted fees.
The Court Case on Hold
Since KPIRG was founded in late 2013, it has been Kwantlen Polytechnic University’s student-operated social and environmental justice resource centre. As a part of the autonomy agreement between KPIRG and the KSA, which came into force on Jan. 1 2015, the KSA has collected and remitted student fees to fund the research group.
With this funding now revoked, KPIRG Director-at-Large Simon Massey says that it is “very unlikely” that they will be able to pay for a full-fledged court case against Hossein.
“[Pursuing litigation against Hossein] will be much more difficult, and if we do make that decision we will have to substantially divert funds away from maintaining the society’s purpose, doing the work KPIRG was set out to do,” says Massey. “We’re going to have to re-examine our budget, but this has had a pretty significant effect on our ability to pursue that.”
KPIRG’s mandate is to provide social justice-centric education, research, and events for KPU students. For years, Hossein was responsible for the group’s day-to-day operations including bookkeeping and taking records. Sometime after he resigned in August 2017, members of KPIRG began to suspect that he had made several fraudulent statements regarding payments to third parties during his time as the administrative coordinator.
Soon after, KPIRG filed the incident to the RCMP and issued a notice of civil claim against Hossein. They did not, however, serve papers directly to Hossein to begin litigation as they anticipated that the KSA would consider ending their autonomy agreement.
Massey says that he and his colleagues “definitely hoped that the KSA would see the value in continuing to fund KPIRG,” but also that they “always knew it was a possibility” that their funding would be revoked.
“We had known for a long time that our goal would be to continue doing the work we do and continue doing our events,” he says. “We’re hopeful that, in the future, the KSA will reconsider this decision. Right now, unfortunately, it is what it is and we’re going to keep fulfilling our commitment to the students and to the university and to our members.”
While KPIRG does not expect to receive any income for the foreseeable future, the research group is not yet bankrupt. It retains the funds gathered from all of its members who paid fees last semester, putting its reserves at $210,759.24 as of April 30, 2018. However, the organization has already paid a $5,000 retainer to its lawyer and “are yet to exceed that amount in billings for legal services,” according to Massey.
KPIRG’s audited financial statements from the years prior to the discovery of the non-operational loss provide a basic understanding of the group’s revenues and expenses. In 2015, it collected $250,185 and spent 205,629, and in 2016, it made $261,780 and spent $246,503. If these trends of earning and spending continue, the funds left in KPIRG’s reserves are likely to last for about one year.
Had the group’s funding not been revoked, KPIRG would have received payment for the summer semester between late April and early May. In the absence of those funds, its board will be looking into applying for grants.
Sometime this summer, they will also need to call an SGM to change the definition of ‘membership’ “specifically to reflect the situation” they’re now in, according to Massey.
Still, he says that KPIRG will be “pushing ahead with events and programming.” In the meantime, the RCMP will continue investigating Hossein’s alleged fraud independently of KPIRG.
The KSA’s Decision
According to KSA President Caitlin McCutchen, the alleged fraud committed by Hossein violated articles 7 and 8 of the autonomy agreement between the KSA and KPIRG. The KSA voted to defund KPIRG as a direct result of these violations.
“In Article 7, it says that KPIRG shall use all funding provided by the KSA towards funding the purposes of KPIRG. They acknowledge that some of that went to Richard,” explains McCutchen. “Article 8 says that those actions must be commercially responsible and comply with KPIRG’s constitution. When they paid that to Richard and he claimed he was going to pay an outside group, they paid him instead.”
“There are [also] a couple of other [violations],” she adds. “Their annual audit must disclose irregularities and they did have a loss. Also, they must adhere to the Societies Act and their board of directors was not upholding fiduciary duty.”
The decision to defund KPIRG was made in-camera at an April 6 meeting of Council. Moving in-camera meant that no KPU students aside from the members of Council were there for the decision, and no minutes from the discussion were taken.
“I think that Council is acting in the best way we can to deal with this situation right now,” says McCutchen. “We consulted with our legal counsel on this and I just think it’s important to make it clear that this isn’t terminating KPIRG. We’re just [revoking KPIRG’s] fees until things get sorted out with them.”
McCutchen says that the fees normally collected on behalf of KPIRG could potentially go towards funding another public interest research group, if the KPU student body wants to create one.
“The fees are still there, so we didn’t need to consult with students for that. They’ll just be held,” she says. “[The KSA] can’t use it. There’s a specific fee for PIRGs so it’s not like they’re being diverted.”
The Runner will continue to follow this story as it progresses.