SUNY foundations balk at new scrutiny from state comptroller

SUNY foundations balk at new scrutiny from state comptroller

At a meeting this week, SUNY trustees vented about how long it has taken to finalize more than two dozen contracts between campuses and their supporting foundations, which solicit funds and hold property on behalf of the schools. The contracts are required under new guidelines intended to increase the affiliated nonprofits’ transparency and accountability, approved last year by the university system’s board following “a very long and tedious process,” one trustee recalled at an audit committee meeting on Monday.

There are seven outstanding contracts, several of which have now been signed and submitted to the central administration for review, general counsel Joseph Porter told committee members. An “impediment to these getting signed earlier,” Porter said, has been concerns raised by several foundations about forms required by the state comptroller’s office that it “had never made them execute before.”

One form related to procurement lobbying law, which after “extensive conversations” with SUNY officials, OSC agreed not to require foundations to sign, Porter said. But the state office still wants “some version” of another form—a vendor responsibility questionnaire, which includes an array of business history-related questions.

“We’ve spent quite a lot of time talking to [OSC] about the fact that this is not a procurement relationship,” Porter said. “The foundations are not vendors who are selling to us, and the campuses aren’t procuring anything from them. So, in many ways, the proposed form seems less than, really, entirely relevant.”

Following negotiations, OSC allowed SUNY to “modify the form to make it more relevant,” and the outstanding foundations will sign this amended questionnaire, Porter added. Multiple trustees seemed vexed by the delays.

“I just want to emphasize [that] I am still frustrated at how long this has taken us,” said trustee Eric Corngold. “I mean, the country wrote a constitution in less time than this.”

A spokesperson for Comptroller Thomas DiNapoli’s office told The Alt that last year, in the wake of bid-rigging scandals involving two SUNY Polytechnic Institute-affiliated nonprofits, it had “advised SUNY that our office was pushing” for both legislative and administrative reforms that would “significantly” impact the university system.

The proposed legislation, which has not been adopted, would restore the comptroller’s ability to pre-approve all SUNY contracts worth over $250,000 and generally ban state contracting through SUNY-affiliated nonprofits. On the administrative side, OSC has sought to require SUNY foundations, alumni associations, and auxiliary corporations to complete vendor responsibility questionnaires, which were already required of nonprofits and quasi-governmental organizations that receive state grants.

“We have been in conversations with SUNY regarding the [vendor responsibility] questionnaire,” said OSC director of communications Jennifer Freeman. “We agreed that they could augment the existing questionnaire to identify items foundations did not believe were applicable and/or to add clarifications and background information to the submission. We agreed to keep an open mind but have not agreed to any modification to the standard form.”

John Kaehny, director of good government group Reinvent Albany, which supports the proposed procurement legislation, applauded the new level of disclosure required of campus foundations by the comptroller’s office. Porter’s comments on the nature of the campus-foundation relationship, while perhaps technically accurate, highlight a kind of accountability grey zone, Kaehny added.    

“The issue here is that SUNY campuses have created the various SUNY nonprofits to do things for them, including providing services they would have had to otherwise procure from outside,” Kaehny said. “Because SUNY controls most of the nonprofits, they just tell them what to do—they don’t have to issue an RFP or go through a procurement process.”

The foundations tend to emphasize their “private,” 501(c)(3) status, and once opposed legislation that would have mandated their compliance with the Freedom of Information Law. (Incidentally, a lawsuit filed this year by a UB law school alumnus, which could potentially have the same effect as the defunct bill, was intended to be discussed in executive session on Monday.)

Campus-based foundations represent only a fraction of the system’s related, nonprofit entities, though their holdings are substantial. When combined with their more than three dozen affiliates—the UAlbany foundation has a biosciences-related offshoot, for instance—foundations control nearly $3 billion in assets and bring in $378 million in annual revenue, according to a presentation by the university controller earlier this year.

A request for comment sent to the foundations specifically mentioned by Porter as having had concerns about the OSC disclosure requirements went unanswered. A spokesperson for SUNY Systems also did not return a request for comment.

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