SUNY Potsdam operating with valid contract with its foundation after delay
Friday, March 2, 2018 - 2:50 pm

POTSDAM -- SUNY Potsdam says there is now a valid contract with the Potsdam College Foundation, Inc. which was delayed by an audit by the state Department of Labor.

The college has responded to a report from the state Comptroller's Office that was critical of the 10 out of 30 audited SUNY units whose foundations had been operating without valid contracts with their schools, SUNY Potsdam among them.

The Potsdam College Foundation operated without a contract for twelve months after Aug. 31, 2016, a press release from the comptroller said.

Readers might have inferred that SUNY Potsdam still did not have a contract with the foundation, but the full auditor’s report notes that SUNY Potsdam and other units have renewed contracts with their foundations since the completion of the comptroller’s report.

The audit took a look at whether the foundation was appropriately managing assets of $35,060,685 as of June 30, 2015, the state comptroller said.

SUNY Potsdam was preparing for the renewal when an inquiry by the state Department of Labor delayed the completion of the contract, according to SUNY Potsdam Director of Public Relations Alexandra Jacobs Wilke.

"In 2016, the Potsdam College Foundation contract renewal with SUNY was temporarily held up because of a routine Department of Labor audit, which was eventually successfully resolved in the Foundation’s favor," Wilke said in an email message.

"The Potsdam College Foundation had all paperwork in place in 2016 for its contract renewal, except for one needed item which was unable to be completed while the Foundation was under DOL audit. This contract was provisionally approved by the Attorney General’s Office. While the Foundation and SUNY Potsdam awaited resolution of the final DOL item, all parties continued to operate as normal, following all guidelines and requirements outlined in the contract," Wilke said.

The foundation's contract with SUNY was renewed in December 2017 after the inquiry by the DOL was resolved.

The question the Department of Labor was trying to answer was whether or not the Potsdam foundation was properly handling pay for a visiting artist.

"The Department of Labor audit concerned a visiting artist who was paid a negotiated contract fee using Potsdam College Foundation funds, in keeping with donor wishes," Wilke said.

"There was some confusion about whether the Foundation was employing people, and therefore needed to have workers compensation and unemployment insurance. The audit finally confirmed in November 2017 that the Foundation, having no employees, is not required to have this coverage," she said.

"As soon as the Department of Labor confirmed that the Potsdam College Foundation was not liable to pay for unemployment and workers compensation insurance, the last piece of needed paperwork was completed, and the Foundation’s contract with SUNY was renewed in December 2017. This contract remains in place now."

Wilke said the foundation “conducts annual independent audits, and has never been found to be out of compliance. The Foundation stands ready to comply with any audit by the SUNY Office of the University Auditor at any time as well.”

The 10 foundations in question were operating without the contracts they are required to have with their campuses while overseeing and managing billions in donations and resources statewide, according to a report released Tuesday, Feb. 27, by State Comptroller Thomas P. DiNapoli.

“We found numerous problems with SUNY’s oversight of its campus foundations. SUNY does not regularly examine the foundations’ books, and my auditors found instances of questionable expenses,” DiNapoli said. “SUNY administrators need to improve their oversight efforts to make sure billions of dollars are being handled properly.”

State-operated campuses are authorized to contract with foundations, which are private, not-for-profit corporations, to support fundraising efforts, real property management, or other activities and functions that are not specifically vested with the campus, said the press release. Generally, foundations receive and manage donations and make these resources available to the campus to support approved programs and activities, the auditors’ report noted.

You can see our earlier story here.