For most people, forgetting your wallet on a trip the bar means a sudden halt to the evening’s festivities.
But if an employee of Clark Hall Pub finds him or herself lacking in cash at the end of a shift and can’t find an ATM before heading to another bar, he or she can just grab a 20 from the till.
The Engineering Society executive closed Clark Hall Pub in June. EngSoc President Charlie Scott and Vice-President (Operations) Rob MacNamara cited budget inconsistencies and liability issues as reasons for the closure.
Erin Hall, the pub’s former business manager, said the practice of employees borrowing money from the pub, referred to as the “Bank of Clark”, has been going on for years. She said the money comes from petty cash in the till.
“It’s like, ‘I don’t have my wallet with me; I’m going across the lounge to have a beer.’”
Hall said it’s a courtesy to the bar staff.
“Usually [employees] have the ability to take cash out of that, and it comes out of their paycheque,” she said. “[It’s] basically because they spend so much time at the bar, if they ever need cash, they’ve got it.”
The loans are recorded on printouts with the first name of the staff member borrowing money, the amount and the date. Hall said staff are discouraged from borrowing more than their monthly salary because of the lack of flexibility in the pub’s numbers.
“Clark’s finances have always been really, really tight.”
If an employee puts in work hours during a given pay period, Hall said, the bar is required to issue a cheque. If the employee has borrowed more than his or her salary, a cheque for a few dollars is issued and the remaining money is deducted from the following month’s paycheque.
“Sometimes people do exceed their salaries, but it doesn’t really make a difference.”
She said the practice isn’t something the pub staff has ever tried to hide.
“It’s a practice that’s been going on at the bar that [EngSoc] should know about.”
No one has ever questioned the practice, she said.
“I’ve never heard of anything, any problems.”
Scott said he knows of the practice only anecdotally.
“I’ve heard rumblings. I never really knew it as fact,” he said. Upon hearing of it from a Journal reporter, Scott said he doesn’t condone the practice.
“It’s not a very able practice. You leave yourself open to problems.” He said employees of non-student-run establishments wouldn’t allow something like this, so there shouldn’t be exceptions made for Clark Hall Pub.
“It’s something that shouldn’t be going on. I don’t like it. If I were a QP staff member, I don’t think I would be able to do that.”
Scott said Clark Hall Pub is not incorporated, meaning the society is liable for all pub operations.
MacNamara said he only became fully aware of the extent of the practice after the pub closed.
“I learned about it speaking to last year’s business manager over the phone since the closure.”
He said an audit done four years ago revealed the bar was keeping between $2,000 and $4,000 in petty cash, money kept on hand and used for the Bank of Clark loans. He said the auditing firm recommended the amount be lowered significantly.
“But it was never eliminated and in fact there is as much as $4,000 [on any given day].”
He agreed that it’s not a financially sound practice.
“It’s one of the things that I want to look at for sure. I don’t really think it’s appropriate to have.”
Peter Kissick, assistant professor in the School of Business specializing in business ethics, said that although the practice itself isn’t illegal, it leaves a lot of room for mistakes to happen.
“The actual practice of lending money is legal,” he said. “Good business practice? No.” He said although lending small amounts of money may seem harmless, it’s important to consider where the money comes from and to whom it belongs.
“If there’s no separate entity that is Clark Hall Pub, then it’s EngSoc that they’re borrowing from and then engineering students,” he said. “If they haven’t documented things properly, there’s going to be double counting, especially if cheques are being issued.”
Kissick said it’s unlikely anyone is doctoring the books, but allowing these loans to happen makes it easy to hide things and it leaves the door open for mistakes.
“I’m not going to sit here and say someone is trying to defraud the pub; the problem is that it’s extremely bad business practice. … If you’re running a practice like this, your finances are not as tight as they should be.”
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