The College of Marin Foundation has had its share of turmoil in the last six months: an abrupt exit by a longtime executive director, a replacement who lasted just two months, a pending lawsuit, an exodus of staff members, allegations of financial mismanagement and a dispute between the foundation and college over $1.8 million.
But both the college and the foundation say they're moving forward now with audits to get to the bottom of any financial issues and are working together to serve the students.
"They're doing their due diligence," says College of Marin president David Wain Coon of the foundation. "They've expressed an interest in cooperation."
Issues came to a head when Margaret Elliott, who was the College of Marin Foundation executive director for 19 years, stepped down in February after writing the foundation board a letter last fall decrying the "toxic atmosphere" that had been created. Her letter was accompanied by a letter from then-foundation secretary Nancy Faw, who said the board had become divided and was undermining the work of the staff.
Concerns were also raised by staff about unauthorized expenditures and poorly budgeted funds.
When Elliott left after negotiating a $40,000 severance, Faw and a part-time clerk also quit. Two fundraisers were reportedly fired. Bookkeeper Daniel Shiner then left less than a month later, after outlining a number of concerns about the financial management of the foundation.
"I had great trepidation about the direction the foundation was going," says Shiner.
His concerns included legal fees of close to $100,000, the allocation of $500,000 from restricted funds to cover administrative costs, checks that were unaccounted for, a missing cash withdrawal and even an office space rented off-campus that foundation staff wasn't informed about.
For the last two decades, Shiner was paid $1,000 per month to manage the books for the foundation and for about 200 different program funds. The foundation, which is a nonprofit organization separate from the college that provides grants and scholarships, brings in about $1 million in revenue annually and received clean audits every year.
"I had the books in perfect shape when I left," says Shiner.
After being ejected from an April foundation board meeting, College of Marin board student trustee Raemond Bergstrom-Wood began an inquiry into many of those same issues. His written inquiry, which brought the problems to public attention, listed a number of questions: how much did the foundation spend on legal fees, why was an unused office space being rented, why did it appear in the foundation meeting minutes that the board was trying to avoid an audit and why was "half a million dollars . . . being liquidated to cover administrative costs for a foundation that raises less than $65,000 per annum"?
David Eastis, who replaced Elliot as foundation director, was also dismissed in April. And attorney Angela Alioto has said that Eastis will be seeking $777,000 for wrongful termination. Eastis, she has argued, was fired for blowing the whistle on the financial mismanagement at the foundation.
All of this combined to alarm the college board of trustees.
"At that point, we had lost confidence in their ability to manage our funds," says college president Coon.
The College of Marin board asked the foundation to cooperate with a college-wide audit conducted by Crowe Horwath and to hand over $1.8 million in bequests that the foundation manages.
The foundation also announced in June that it is conducting its own forensic audit by KPMG.
Initially, the foundation rejected the college's demands. But in a letter from foundation attorney Rosemary Fei, the foundation now says it will cooperate with college auditors.
Turning over the $1.8 million to the college, though, is complicated, Coon acknowledges, because it has to be done following donor wishes and fund restrictions. But, he says, they are moving forward with that process as well.
"They can't just send us a check," says Coon.
The foundation currently has no permanent executive director and is waiting for the KPMG audit to be finished to act on any recommendations it might make. No one from the foundation was willing to speak on the record for this article.
Coon says he expects the Crowe Horwath audit to be completed by October. He's also optimistic that the college and foundation are moving in the right direction toward serving students.
"Until six months ago, it was a wonderful foundation. I hope they get straightened out and do what they're supposed to do," says Shiner.