Harvard UC Finance Audit Finds No Irregularities, Vindicates Accused Council Members

UPDATED: March 25, 2022 at 6:38 a.m.

An audit of the Undergraduate Council’s finances has “yet to find evidence of any financial irregularities,” according to an initial report of its findings released Thursday by Undergraduate Council President Michael Y. Cheng ’22 and Vice President Emmett E. de Kanter ’24.

The audit, which began in January and was conducted by Harvard Risk Management and Audit Services, dispelled some allegations of financial mismanagement that have plagued the Council since a particularly contentious presidential election last November. It also made recommendations on procedural changes for the body.

The Council voted unanimously to “fully cooperate” with the investigation last December. The audit was expected to conclude by the end of February, but was extended several times “in part because of refusals to answer questions,” Cheng wrote in his email.

The Dean of Students Office, which disperses funding to the UC, had withheld more than $125,000 from the body in response to the audit.

Throughout his Thursday email, Cheng asserted multiple times that the audit had uncovered “extensive financial mismanagement in the UC,” and that some more serious findings had been withheld from the report due to concerns over optics.

“Some of the findings of the investigation will not be released publicly because they could cause substantial harm to Harvard’s reputation, given that the UC nominally represents Harvard students to the public,” Cheng wrote in the email.

Assistant Dean of Student Engagement and Leadership Kate Colleran, who previously served as a mediator for the UC, had a different evaluation of the report.

In an email to The Crimson, Colleran asserted that the report represented the full scope of the investigation.

“I was pleased that the UC recognized a need to hold themselves accountable in their stewardship of student money by requesting an audit,” Colleran wrote. “I have confirmed with Audit Services that all of their findings are included in the report and no financial irregularities were found.”

Cheng later clarified his statements in an interview.

“I think being yet to find evidence does not mean that the UC is completely cleared,” Cheng said. “Strictly looking at legal terms, yeah, there are no legal financial irregularities, but there is definitive financial mismanagement.”

The report makes conclusions about the merits of six of 12 financial allegations against the body.

In one finding, investigators determined that a student organization received $2,190 of funding from the Grant for an Open Harvard College in November 2020 to purchase Patagonia sweaters. The report indicated that the apparel “does not align” with the grant criteria.

The grant money is to be awarded to initiatives that are “socially inclusive and financially accessible,” including racial, cultural, mental health, and harassment prevention causes, per the UC’s website.

The report also stated that a UC retreat to Sunapee, N.H., in the fall of 2021 had exceeded its $3,000 allocated budget by nearly $4,000. No formal budget for the trip was available, the report also noted.

The report evaluated the legitimacy of several claims made during the UC’s officer elections last November, including allegations levied against former Adams House Representative Esther J. Xiang ’23, who was accused of losing or stealing at least $20,000 of Covid-19 relief funding granted by the Council.

“We found no evidence that any funds were disbursed, used for other purposes, or otherwise spent improperly by presidential candidate Esther Xiang,” the report states.

Xiang and her running mate, David Y. Zhang ’23, were runners-up in the election among six tickets.

In a written statement to The Crimson Thursday, Xiang underscored the distress the episode had caused her and advocated for compassion and kindness from her peers.

“These were severe accusations, and their insidious intent and destructive power cannot be understated. They affected my relationships, had people questioning my character, and took a deep toll on my mental health and wellbeing,” Xiang wrote. “I hope that this audit brings us clarity, not just about my situation, but about how the UC, its campaigns, and all members of the Harvard community should hold themselves more accountable for their actions.”

Cheng addressed the findings in his email.

“No one deserves to have their reputation destroyed by false, misleading allegations,” he wrote.

The report also cleared the Council of tax code violations that were the focus of attacks by Ivor K. Zimmerman ’24 during his bid for UC president in the same election.

Zimmerman and his running mate, Joy Y. Lin ’23, campaigned largely on the premise that the UC had violated its own constitution by failing to file for non-profit status since 2008, and that the body was therefore nonexistent.

Then-UC President Noah A. Harris ’22 defended the council against the accusation, clarifying that the Council was automatically granted non-profit status on account of its standing as a Harvard student organization. The UC later voted to remove this constitutional requirement.

The report echoed Harris’ explanation.

“The UC is not required to file income tax returns since it is sponsored by the DSO and qualifies under the University’s tax-exempt status,” it reads.

Zimmerman reacted to the findings with relief and some humor.

“I don't want to say I'm disappointed because it's a good thing, but obviously, womp womp, ran a campaign on saying it wasn't real,” he said.

The report states that, in two of the 12 allegations investigated, auditors could not make conclusions “based on the unavailability of financial records or inconclusive data.” These allegations included the “failure to collect and review $100,000 of grant receipts and request return of unspent funds during 2017 and 2018” and the use of UC debit cards for meals and snacks.

Four other allegations remain pending including favoritism shown toward large student organizations, conflicts of interest in Wintersession grants, political contributions made by the Council, and “misuse of grant funds by a student organization focused on cultural and racial initiatives.”

The report also presented a range of procedural recommendations to improve the UC’s financial management practices, including regular review of UC debit card activity, more thorough financial training for officers, and the documentation of conflict of interest procedures.

UC Treasurer Kimani E. Panthier ’24 expressed satisfaction with the results of the audit and underscored his commitment to improving the UC’s financial management infrastructure.

“My reaction to the audit is that the audit confirms what I knew all along, that there were no financial irregularities,” Panthier said. “I think that these findings demonstrate that we can even further enhance the fiscal responsibility of the UC with the help of the professionals from the independent audit.”

The report states that the investigators are “working with UC officers to resolve” the pending allegations and expect “to reach a conclusion in the next few days.”

—Staff writer J. Sellers Hill can be reached at sellers.hill@thecrimson.com.