Report: SUNY oversight of private foundations lacking

Bethany Bump

Times Union

Mar 5, 2018

The foundation that supports fundraising efforts and other activities at the state University at Albany has not been audited by SUNY administrators in more than 10 years, according to a report issued Tuesday by the state comptroller's office.

That's not unusual for the State University of New York's 30 campus foundations, which manage billions of dollars in donations and had net assets of $2.1 billion as of June 2015. More than half of them have not been audited by SUNY since at least 2007, the report notes, while a third of them are operating without active contracts governing the relationships between the publicly funded campuses and the private, not-for-profit foundations.

"We found numerous problems with SUNY's oversight of its campus foundations," said state Comptroller Tom DiNapoli in a statement. SUNY was also faulted for failing to regularly examine the foundations' books, while auditors found "instances of questionable expenses."

"SUNY administrators need to improve their oversight efforts to make sure billions of dollars are being handled properly," DiNapoli said.

The comptroller's office spent a year examining whether SUNY's administration had provided sufficient oversight to campus foundations from July 2013 through October 2017, and concluded it hadn't — prompting renewed calls for legislation that would grant oversight of the foundations to DiNapoli's office.

United University Professions, a union representing SUNY employees, said it was troubled by Tuesday's report, which found, among other things, that money intended for education activities at the University at Buffalo was used to finance social events including a donor recognition dinner, a retirement event, a class reunion and a graduation party.

"These institutions are tasked with serving the academic mission of SUNY," said Frederick Kowal, president of the union. "After reading the study, it is clear the foundations have lost their way. SUNY must wake up, step up and demand far more accountability from the foundations. The foundations — and SUNY — owe that to the students and the SUNY community at large."

In a lengthy response attached to the report, SUNY argued the report was neither fair nor balanced, stating it failed to acknowledge numerous oversight activities by SUNY and others, including the foundations' board of directors, independent auditors, campus officials and the state attorney general's office.

The comptroller's office, however, says the scope of its audit was limited to SUNY's oversight, which is required by its own policies but was found to be lacking on numerous counts.

A main issue highlighted by the report revolves around expired contracts. SUNY campuses, which are public entities, are required to contract with their affiliated foundations, which are private, not-for-profit corporations.

The comptroller's report found that 10 of the 30 foundations were operating under expired contracts — in some cases for more than six years. UAlbany's contract had lapsed for about 14 months at the time of the audit, though it was renewed sometime before the report was concluded, DiNapoli's office noted.

UAlbany said Tuesday that its contract was updated to reflect new guidelines approved by SUNY's board of trustees in 2016 — though many of those guidelines, including whistleblower protections, had already been in place for many years before that.

The University at Albany Foundation, which had nearly $75.7 million in assets as of June 2015, was also one of 16 foundations statewide that have not been audited by SUNY system administrators since at least 2007, according to the report.