As part of a sweeping overhaul of its operations, the Cal Poly Pomona Foundation will chop its $1-million annual contribution to the university in half, the foundation’s board of directors decided this week.
The foundation, a nonprofit auxiliary, will save $500,000 by dropping support for the development office, which organizes fund-raisers for the university and manages alumni relations. Instead, the university will fund the development office, which has a nine-member, on-campus staff.
The move comes as the university is about to commission an in-depth independent audit of the foundation, as recommended by the California State University chancellor’s office in a Sept. 1 report. As part of an investigation related to campus President Bob H. Suzuki, the report recommended a review of the foundation’s finances and staff.
Also, the move follows an accounting firm’s report in May that found the foundation would have trouble meeting a major loan due in seven years and faced a projected $6.8-million net deficit in 2001. But changes were under way even before the report was finished, as foundation officials realized they were in financial trouble, said Patrick Lattore, the foundation’s new executive director.
The development office worked independently of the foundation, which only paid for its operation, said Lattore, who started his job in June. The move allows the foundation to concentrate on providing campus services, such as running the bookstores, cafeteria, student apartments and conferences.
“Fund raising is part of the development office,” Lattore said. “The foundation is not in the business of fund raising. Our activities are primarily focused on support services.”
Besides dropping the development office, the foundation is taking several steps to get its financial house in order, at the recommendation of its accountants.
A report by Deloitte and Touche accountants had found that the foundation did not have the money to meet a $5.6-million balloon payment for student housing due in 2000 and was on shaky financial ground.
According to the report, the off-campus bookstore that opened in January with little market research or planning was more than $166,000 in debt.
But foundation officials said the Deloitte and Touche report was a worst-case scenario, indicating what could happen if the foundation made no changes in its operations.
The report was completed before information was available on fiscal 1992-93, Lattore said.
“I don’t want to suggest to this committee that everything is fine,” Lattore told the board. “But I do believe it’s fair to say that we are in a much different position based on what we now know and with these (changes) than we were just three to five months ago when we had a great deal of publicity over the issue of the (student housing) village . . . and being able to pay those debts.”
Under a reduction package approved Monday, new projections indicate that the foundation will not only avoid the $6.8-million net deficit projected by the accounting firm in 2001 but even turn a profit by that time, Lattore said.