June 8, 2005

BOARD APPROVES FIRST READING OF POLICY CLARIFYING RELATIONSHIPS BETWEEN UNIVERSITIES AND FOUNDATIONS

BOISE - The State Board of Education gave its initial approval to a policy designed to improve financial controls and accountability between all Idaho universities and their affiliated foundations.

The Board will give its final approval at the Board meeting in August. Before its final reading, university staff will review the policy and make recommendations for modification, if any. The policy provides the framework for how foundations should operate while allowing foundations individual flexibility in their structure and activities. Once the policy is implemented, universities will bring forward operating agreements with their foundations for the Board to approve.

“This policy helps clarify and create a more definitive line between the roles of our universities and their foundations. The new policy offers more checks and balances to better protect both the foundations and the universities,” said Rod Lewis, President of the State Board of Education.

The new policy restructures the financial working relationship between universities and their foundations and clarifies each entity’s responsibility. Policy changes include the following:

• Designates cash and real estate gifts should be made directly to the Foundation,
• States the foundation executive director will be a foundation employee, paid by the foundation, not the University,
• Prohibits foundations from making direct payments for institutional expenditures,
• Permits foundations to acquire real estate for investment purposes, but prohibits foundations from developing real estate projects for the university, unless approved by the Board,
• Requires foundations to develop and comply with a conflict of interest policy and a code of ethics,
• Clarifies that two signatures are required on any checks written by the foundation and a foundation officer cannot sign for both the foundation and the institution,
• Prohibits university funds from being transferred or loaned directly or indirectly to a foundation without prior approval from the Board,
• Bans the foundation from making payments to institution employees in connection with their duties supporting the foundation. Payments will be made directly to the institution.

To read the policy go to:
http://www.boardofed.idaho.gov/meetings/2005/06_08_05/Index.asp.

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