2018 TACCBO Conference Roundtable Discussion June 14, 2018, 2:30-3:20 Rethinking the Formal Relationship Between the College and its Foundation 2018 TACCBO Conference Roundtable Discussion June 14, 2018, 2:30-3:20

What’s Been Happening in Florida? Florida lawmakers (both House and Senate) approved legislation that included limiting college and university foundations from using taxpayer money (SB 374) Proposed legislation result of examination of spending practices of foundations by the Florida House Appropriations Committee Governor ultimately vetoed the Bill for numerous reasons

Florida SB 374 – DSO Specifics Modifies requirements relating to community college and state university direct support organizations (DSO) to: Prohibit the specified DSOs from using state-funded personal services, beginning July 1, 2022. Prohibit the specified DSOs from using state funds for travel expenses. Prohibit the specified DSOs from giving, either directly or indirectly, any gift to a political committee, with no exceptions. Require the chair of a university or community college board of trustees to appoint at least one member to the DSO executive committee. Specify that, for state university DSOs, information related to the expenditure of unrestricted non-state funds and the expenditure of private funds for travel are not confidential and exempt.

Why do We Care in Texas? Similar legislation might come our way in the future!

Applicable Texas Law Section 130.003 of the Texas Education Code governs state appropriations – Subsection c provides, “all funds allocated under the provisions of this code…..shall be used exclusively for the purpose of paying salaries of the instructional and administrative forces of the several institutions and the purchase of supplies and materials for those instructional purposes.” State appropriations can’t be used to pay for foundation functions; however, most CCs can prove that state appropriations are used to cover faculty salaries and instructional costs.

Applicable Texas Law Texas courts and the Texas Attorney General have adopted a well-established three-part test to determine when a public entity may provide public resources to other entities both public and private: The grant primarily accomplishes a public purpose, rather than a benefit to private parties – purpose of foundations is to support colleges by funding scholarships and/or instructional programs The granting entity receives a return benefit – college receives dollars for student scholarships or instructional programs The granting entity retains sufficient control over the grant to ensure that the public purpose is accomplished - control can be the foundation’s mission, representation on the foundation board, required reporting to the institution Board, etc.

Applicable Texas Law TRS Rules Chapter 25, Subchapter A Rules 25.1, Full-time service – Eligible for TRS benefits provided they are employed by the college for one-half or more (20+ hours) of the time required of the standard workload for the same or similar FT position. Most CCs can argue that the majority of the work their employees are doing for the foundation can be considered work of the institution, thus exceeding the 20+ hour threshold.

Applicable Texas Law Attorney General Opinion MW-373 (1981) - Concluded that UT System lacked authority to place UT Law School foundation employees on the UT System’s payroll and to afford them fringe benefits reserved for state employees, because they were employed by the private foundation, rather than the state educational agency. For most CCs, institution employees work for the college in coordination with the foundation, but not for the foundation. The institution has sole responsibility for hiring, evaluating, directing, disciplining and terminating staff that work for the institution on foundation related matters.

Key Take Aways You are probably ok, but do review the following: MOU between institution and the foundation Job descriptions of employees that work on foundation related matters And, consider hiring one foundation employee