AG’s report details improper use of funds by Ventura County Community Foundation
Story updated at 11:16 p.m. March 24:
The Ventura County Community Foundation improperly used $3.8 million of endowment funds earmarked to support VCCF’s operations and made improper, over-investment of permanent funds into money market accounts, according to the California Attorney General’s office.
The VCCF voluntarily released the information on March 23.
“Though the AG did not publish its report, VCCF requested and was granted permission to share its findings,” said Scott Hansen, VCCF board chairman. “It was good we acted immediately on what we discovered as the letter did not contain any surprises. We deeply appreciate the AG’s guidance in this process and began implementing corrective action a year ago based on the assessment provided by our current CEO, CFO and their team.”
The attorney general report, according to the VCCF, called for the organization to restore the $3.8 million in funds upon sale of its building or its final mortgage payment. It also called on the VCCF to replenish $1.8 million of lost (under-earned) investment income to the various affected funds, and to work with an independent consultant to develop new procedures and policies.
In addition, current and future members of VCCF’s board must receive additional training on their fiduciary duties within six months of the letter or their respective date of board appointment.
A report issued by auditor KPMG in 2016 found that the foundation invested permanent funds in money-market accounts, over-allocated interest income to VCCF’s unrestricted funds and charged excessive fund administration fees.
VCCF closed its Center for Nonprofit Leadership in September and has laid off the majority of its staff members, moves that have shaken up the region’s nonprofit and philanthropic sectors.
Employees were reduced from 22 to five, the VCCF said. The restructuring has trimmed the budget more than 60 percent.
Representatives from the VCCF were in San Francisco all day on March 23 taking part in an Accredited Investment Fiduciary examination.
“Our current board is 100 percent committed to not only implementing the AG’s recommendation but adding even more safeguards and training for our staff,” Hansen said. “We look forward to future board members joining forces in enhancing philanthropic services to all of Ventura County.”
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