UNIVERSITY FOUNDATIONS AND AUXILIARIES BILL HEADS TO GOVERNOR'S DESK
Education Desk
September 04, 2009
Sacramento, CA – Legislation that would make the controversial spending and financial practices of California State University subsidiary organizations and foundations more transparent was approved by the Assembly on Thursday by an overwhelming bipartisan vote of 67-0.
Senator Leland Yee´s bill—SB 218—would ensure greater accountability of entities connected with the UC and CSU by updating the California Public Records Act (CPRA) to include auxiliary organizations that receive public funds or perform government functions on state campuses.
According to the CSU Chancellor´s Office, 20 percent of its $6.7 billion budget, or $1.34 billion, is held in auxiliaries and foundations, which is currently out of public view.
SB 218 comes in response to financial scandals involving foundations in the already cash-strapped state university system. UC and CSU have often evaded the public records act by shifting some responsibilities to foundations and other auxiliary organizations.
After the Senate concurs with the amended version of the bill, it will head to the desk of Gov. Arnold Schwarzenegger, who recently launched a web site dedicated to "Reporting Transparency in Government."
Supporters of SB 218, including the California Faculty Association (CFA) and the California Newspaper Publishers Association, are counting on the Governor to stand by his words by signing this transparency bill into law.
When the Governor launched his transparency web site, he stated, "The people of California have a right to know what they are getting for their money. In this time of deep recession, it is more critical than ever that state government operates efficiently and is accountable to the people."
Lillian Taiz, President of the California Faculty Association, stated, "In light of the Governor´s public commitment to transparency, we hope he will back up his words with action by signing SB 218 into law. The lack of transparency and accountability around these auxiliaries and foundations has led to scandals and waste of taxpayer dollars that were intended to improve the quality of education in the classroom for California´s students.
"On the 23 CSU campuses, our students are battling just to get enough class units to move toward graduation because budget shortfalls have led to the elimination of thousands of course sections. Students are in danger of giving up on a college degree if they can´t get the classes they need.
"Everyone in the state is aware of the lack of transparency in the CSU auxiliaries, including Republicans and Democrats in Sacramento who overwhelmingly voted for the bill and the editorial pages of newspapers up and down the state who have watched their reporters uncover waste, fraud, and abuse in these entities.
"Now, it is up to our Governor to show his real commitment to transparency as implied on his recently launched ´transparency in government´ web site. The people of California are counting on him to stop the waste of valuable public funding that we need urgently in the classrooms."
The bill´s author, State Sen. Leland Yee (D-SF) agreed saying, "It is imperative that the Governor sign SB 218 to stop the CSU from evading the public records act by simply shifting responsibilities to foundations and other auxiliary organizations. Taxpayers and students deserve to know how their public universities are run. SB 218 will ensure that our public higher education systems operate in the light of day and are held accountable."
Many newspaper editorial boards from across the state have come out in support of SB 218, including:
Los Angeles Times (http://www.latimes.com/news/opinion/editorials/la-ed-records18-2009aug18,0,5001590.story)
Sacramento Bee (http://www.sacbee.com/opinion/story/2029786.html)
Riverside Press Enterprise (http://www.pe.com/localnews/opinion/editorials/stories/PE_OpEd_Opinion_S_op_21_ed_openrecords1.40d5223.html).
The bill previously passed the state Senate by a margin of 35-1.
Earlier this year, a campus foundation at Sonoma State University was found to have used donated funds to provide huge personal loans to a former foundation board member. Some of this money may never be recovered. This money was intended to fund scholarships for qualified students.
In another recent incident, a Superior Court judge ruled in July that a CSU trustee had a conflict of interest when, as the chief executive officer of a movie-theater company, he cut a deal for his company to build a movie theatre at Fresno State University. The CSU argued in court that the conflict of interest law did not apply because the deal was made with the CSU Fresno Association, which they argued was a private entity. Just days prior to the ruling, a CSU lobbyist – in testifying against SB 218 – gave a contradictory response, stating that CSU foundations and auxiliary organizations adhere to state conflict of interest laws.
In 2001, the Fresno Bee newspaper was denied information, specifically concerning the identity of individuals and companies that purchased luxury suites at the Save Mart Center arena at Fresno State. The denial resulted in CSU v. Superior Court (McClatchy Company), in which the Court opined that although it recognized university auxiliaries ought to be covered by the CPRA and that its ruling was counter to the obvious legislative intent of the CPRA, the rewriting of the statute was a legislative responsibility.
There are currently 87 CSU-related non-profit auxiliary organizations connected with the 23 CSU campuses and/or the CSU Chancellor´s Office. See http://www.calstate.edu/FT/auxorg/AuxOrgList.shtml
CSU auxiliaries often operate campus bookstores, concessions and student unions, manage foundations to benefit students, and operate campus parking facilities, to name a few of their functions.
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