The Northern Marianas College Board of Regents disclosed Friday the lack of documents that are vital to the transparent operation of the NMC Foundation.
William Torres, chair of the board’s fiscal committee, recently conducted an initial check of the foundation’s operation and found out that it doesn’t have key reports, including audits for many years.
In his report to the full board on Friday, Torres strongly recommended that the foundation undergo a management audit, an internal control audit, a financial audit, and an investment audit for the last six years beginning January 2007 through December 2013.
The NMC Board of Regents established the NMC Foundation in 1999 for the purpose of acquiring, managing, and disbursing funds from alternative sources to support the advancement of NMC’s educational programs and services. Its primary task is to handle a federal endowment fund of $3 million for the college.
Torres disclosed that his committee found that the foundation has over $6 million in its corpus—an amount he described as healthy and growing. Despite the lack of financial reports, Torres commended the foundation officers for keeping a healthy portfolio for the college.
However, Torres said it would be of further help if the foundation would have necessary documentations for a “transparent and accountable” operation of the non-profit organization.
“The committee noticed that there’s no annual report, which is important for transparency and accountability of the operation of the statutory foundation of the college. There’s also no readily available schedule of expenses, which is a typical financial report,” disclosed Torres.
He said the fiscal committee has already asked NMC president Dr. Sharon Y. Hart to produce the pertinent documentations, being the board’s direct link to the foundation. Hart sits as an ex-officio member of the NMC Foundation.
Besides the lack of audits and other reports, Torres added that there is also no memorandum of agreement between the college and the foundation. Necessary amendments to the foundation statute have not been properly registered. A policy on donations and gifts received were also non-existent.
“The idea is to make this foundation to continue to grow and remain healthy. We’re expecting the president to provide us the necessary documentations we requested because ultimately, the board has authority over this foundation,” said Torres.
The NMC Foundation was left with only two board members over a year ago due to several resignations. Hart reported Friday that there are now nine board members and an executive director, Richard Villagomez, was brought in last year.
Hart said the MOU is now in draft form and would soon be acted upon by the board. “The foundation is really trying to move aggressively now. We’re presently developing the MOU, which is common between the college and the foundation,” she said.
Torres clarified Friday that the Board of Regents, which is only statutorily authorized to have oversight on the NMC Foundation, has no business with the dealings of a subsidiary foundation that was created only a year ago.
“Is that [new foundation] moving ahead?” asked regent Elizabeth Rechebei.
Hart said the “new foundation” was patterned after the existing one at the University of Guam, which is primarily tasked for operation while the other is created solely for the purpose of fundraising. Hart emphasized that there are donors who are uncomfortable in making their donations public. This is taken cared of by the new foundation.
“The board’s fiscal committee wants to be clear once and for all that our oversight is on the statutory foundation [NMC Foundation] only and that’s where we need to focus on. For the new foundation, the BOR has no business [with that],” according to Torres.