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More Compulsory Student Association Fraud

Thu, 10 Jun 2004

More Compulsory Student Association Fraud: $130k Vuwsa

Recent allegations involving the suspected theft of over $130,000 from the Victoria University of Wellington Students' Association (VUWSA), is the latest in a long line of frauds involving money collected from students by compulsory student associations, Student Choice spokesman Glenn Peoples said today.

The case, reported in the Sunday Star Times (6 June), concerns money collected by VUWSA and transferred to another compulsory student group Ngai Tauira, which claims to represent almost 1500 Maori students at Victoria University.

Every fulltime Victoria student is forced to pay $99 a year to VUWSA, giving the association annual fee income of $1.3m. Membership of VUWSA is compulsory; students must pay the association's fee before they can study. In 2003, VUWSA transferred $166,000 to Ngai Tauira.

Compulsory membership of VUWSA and other associations creates large pools of money which make tempting targets for fraudsters. Because students are forced to join groups like VUWSA they don't take an active interest in the organisation. This gives a small number of people control over large amounts of money and makes fraud easier.

If fraud occurs in other incorporated societies members can leave and reduce the organisation's income. But even though it appears Victoria students' money has been misappropriated, compulsory membership means next year VUWSA will take another $1.3m from students.

The VUWSA case comes hot on the heels of a fraud last year when a former employee of the Massey Wellington Students Association (M@WSA) admitted stealing over $203,000 from the compulsory association.

Victoria University management cannot dismiss the VUWSA case as merely a "student association matter". The university collects VUWSA's income by adding the association levy to students' invoices and transferring collected monies to VUWSA. If VUW didn't act as VUWSA's agent, the association would have to charge students directly. However this would mean most students wouldn't pay because they see little value in the compulsory organisation.

Financial misappropriation of the type seen at VUWSA and M@WSA will continue as long as students are forced to join student associations.

ENDS

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