OPEN GOVERNMENT — Concluding an investigation into fundraising practices at California
State University Stanislaus, Attorney General Edmund G. Brown Jr.
announced today that the CSU Stanislaus Foundation has agreed to improve
oversight of the money it raises and spends for the school.
"We examined whether money given to a charitable foundation was
handled appropriately, but found no violation of law," Brown said.
"However, the foundation board has agreed to make changes to improve
oversight of its funds."
Brown's Charitable Trusts Section found that the foundation
exercised inadequate oversight of its $20 million in assets, but found
no misuse of its funds and no violations of state law.
In April, at the request of state Senator Leland Yee of San
Francisco, Brown agreed to investigate the foundation, including whether
it was spending its money for the benefit of the campus as it promises
its donors, the university and the public. Brown also investigated the
refusal of CSU Stanislaus to turn over records of an appearance by Sarah
Palin at a university fundraising event.
Subsequently, Californians Aware, a non-profit watchdog group, filed
a civil lawsuit against both the university and the foundation to
compel disclosure, and Brown suspended his investigation pending
resolution of the lawsuit.
Brown's audit showed that the foundation's accounting procedures
were inadequate, it failed to understand fully its duties and
responsibilities under the law – including basic charitable trust
concepts – and it failed to implement its own auditor's recommendation
to prepare a budget for all fundraising events. Recently, the foundation
has been working with an independent auditor to rectify these lapses.
The foundation's board of directors agreed to:
– Participate in directors' training on management of charitable
organizations and the fiduciary duties of charitable boards of
– Consider immediately all recommendations made by its independent auditor.
– Ensure that its relationships with all outside fundraisers comply with California law.
– Ensure that it consistently follows all its fiscal and governance policies.
The Attorney General's Charitable Trusts Section oversees charities
to make sure they comply with the law and their articles of
incorporation. The Attorney General is authorized to bring legal actions
against charities if they misuse funds under their control or otherwise
fail to follow the law.