SB 218, the bill which would subject our independent auxiliaries to the Public Records Act (PRA) was approved by the full Senate last week.

The CSU and others believe this measure will increase costs to our auxiliary organizations, and in turn, reduce non-state resources to our campuses at a time when we need them most. While the bill was amended to remove our concerns as they pertain to anonymous donors, the system still believes the bill will result in reduced resources and unnecessary intrusion in these non-state entities.

The CSU feels strongly that the bill is unnecessary give all auxiliaries are transparent to the public. This includes conducting public meetings and providing a governing body that is balanced and representative of the university. While these organizations are not governmental or public agencies, and therefore outside of the PRA, they are subject to extensive oversight and hold to strict accountability and transparency standards, including the public’s right to inspect or otherwise have access to a wide range of information.

Organization governance, operations and fiscal affairs are subject to extensive oversight and transparency standards, including:

• Auxiliary organization boards and committees must conduct their business in open meetings;
• Auxiliary board composition must be broadly representative including faculty, staff and students;
• Auxiliary organization expenditures and fund appropriations must be approved by the governing board;
• Auxiliaries are subject to an independent annual financial audit by a certified public accountant, and that report must be published widely and be available to the public;
• All auxiliary and alumni organizations operating in the CSU are also classified as charitable organizations and are under the supervision of the Department of Justice, Registry of Charitable Trusts;
• All auxiliary organizations have been determined by the U.S. Internal Revenue Service to be Internal Revenue Code Section 501(c) (3), 509(a) tax-exempt public charities. The public has the right to inspect these materials, plus the IRS determination letter and any background documents relating to the determination. IRS regulations prescribe specific access procedures, as well as disclosure limitations relating to protected information; and,
• The general public has the right to inspect each organization’s extensive federal annual tax return (IRS Form 990).

Many of the university’s auxiliaries are dedicated to raising and managing non-state funds to support students with scholarships, housing, endowed chairs for faculty, research, capital outlay investments and other programs and services. Given the $1 billion reduction the CSU has taken in recent months, CSU must continue to bring in more of these non-state dollars and believes SB 218 will have a chilling effect on these efforts as it will subject all vendors’ records to public release.

Despite these concerns the bill was approved by the Senate on a vote of 35-1, with three abstentions including Senators Gil Cedillo, Carol Liu and Denise Ducheny. A big thanks to Senator Lou Correa who was the lone no vote on the bill. In addition, the CSU thanks Senator Mimi Walters for her help in assisting with getting the amendment to protect our donors into the bill.

The bill will now make its way to the Assembly where it is likely to be heard in the Assembly Judiciary Committee in the next few weeks. For more information on SB 218 please visit our website.