Gifts tied to Fresno State probed

December 19, 2009 

SACRAMENTO -- State Attorney General Jerry Brown is auditing a Fresno State foundation, possibly reopening the books on the handling of matching donations the university has acknowledged were incorrectly accepted for athletics.

In a Dec. 10 letter to the California State University, Fresno, Foundation, Brown asked for documents dating to Jan. 1, 2000, including information on financial transactions between the foundation and the university's athletic department.

The letter does not detail what Brown is after and alleges no wrongdoing. The Attorney General's Office declined comment Friday.

But it appears the inquiry could be in response to a complaint by the California Faculty Association union -- which last summer asked Brown to take a closer look at foundations throughout the CSU system.

The union's letter to the attorney general cites several cases of "mismanaged" donations at universities that the union say are especially troublesome in light of recent budget cuts. The letter refers to Fresno State's handling of a matching gift program in which corporations matched donations made by their employees or retirees.

Fresno State officials discovered problems with the program in 2002, but did not inform the public. Officials later commissioned an independent report that revealed the university improperly accepted almost $2.9 million in corporate matching gifts for athletics from 1986 to 2003.

"University officials mistakenly assumed that even if a company's policy prohibited contributions to athletics, employee contributions could be made to athletics as long as the company's matching gift went to an academic counseling program," the university said in a July 2008 statement.

Corporate donors were offered refunds and the university "successfully eliminated the problem through matching gift safeguards put in place following an internal review in 2003," Fresno State said in the statement. The university at the time also forwarded "a complete report" to the Attorney General's Office, according to the statement.

University spokeswoman Shirley Armbruster said Friday that Fresno State will "cooperate fully" with the attorney general's latest request.

Brown also is auditing a Sacramento State foundation called University Enterprises, The Sacramento Bee reported this week. The faculty association in its letter cited $233,000 in loans made to University President Alexander Gonzalez.

The reporter can be reached at eschultz@fresnobee.com or (916) 326-5541.

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