Fullerton College President Greg Schulz released a statement on August 20 announcing that the school is working towards creating a charitable nonprofit auxiliary foundation.
According to the statement, the partnership with the Fullerton College Foundation will officially come to an end on October 30. The district will hire an executive director and an administrative assistant to oversee the planning of the new foundation.
The current “Master Agreement” between the Foundation and Fullerton College has been in place since 2009.
There was a new master agreement that was initially approved by the Foundation’s board of directors in December 2019. The District board of trustees approved the new master agreement this past April.
However, according to a letter sent by the District’s legal team several problems regarding the Foundation’s operations have caused concern.
The letter declares that the foundation officers did not carry out what was agreed upon in the new master agreement which was an issue for the district.
One of the issues recognized by an external audit according to the letter was, “Material weaknesses identified included that the Foundation’s net assets without donor restrictions were at a deficit of over $2 million as of June 30, 2019, that the Foundation’s net assets without donor restrictions have operated at a loss ranging between $131,854 and $287,448 per year for the last five years.”
“Everybody knew a year ago about the loss … our audits are presented to the board of trustees every year … to say that this is a revelation is ludicrous,” said Chuck Allen, Fullerton College Foundation Director, in response to the foundation operating at a financial deficit.
According to the Director of Campus Communications Lisa McPheron, the financial audits for several years have indicated that the foundation was operating at a loss.
“The fact that the operation was operating at a deficit was a consideration in the district’s desire to convert the Foundation to an auxiliary organization and, when that did not happen, to terminate the master agreement,” McPheron said.
The letter asked the foundation to leave all facilities and offices on District property, as well as “Distribute all Foundation property and assets to a nonprofit 501(c)(3) foundation to be designated by the College,” before October 30.
“If we have to move, we’ll pack up and move. We’re still going to be the best friend to Fullerton College and the city of Fullerton. We’re going to continue to honor the 270 named scholarships that we have,” Allen said.
According to McPheron, the next step for the district will be to begin the transition process towards activating the planned auxiliary foundation and make certain of the fiscal sustainability of future efforts regarding the new foundation.
The Fullerton College Foundation has had ties with Fullerton College since it was founded in 1959. According to their website they have awarded over $200,000 in scholarships and grants this year alone.
Any scholarships previously awarded by the Foundation will still be honored. The foundation staff will finalize all checks to the students who were awarded.