Maryland Office of Legislative Audits finding related to the MCPS Educational Foundation that is currently requesting donations for student school supplies. What do they really do with your donations?
Finding 13
MCPS did not have a memorandum of agreement with its affiliated
foundation to address each entity’s roles and responsibilities.
Analysis
MCPS did not have a memorandum of agreement (MOA) with its affiliated
foundation (Montgomery County Public Schools Educational Foundation) to
address each entity’s roles and responsibilities. The Foundation is a tax exempt
charitable organization under Section 501(c)(3) of the Internal Revenue Service
(IRS) code that was created in 1988. According to filings with the IRS and its
website, the Foundation’s purpose is to support and enhance the educational goals
established by the Board of Education of Montgomery County, which it
accomplishes through fundraising and providing grants to teachers and
scholarships to students.
According to the Foundation's fiscal year 2020 audited financial statements,
revenues and expenditures totaled $1.8 million and $1.2 million, respectively.
Additionally, as of June 30, 2020, the Foundation’s assets totaled $7.7 million,
which primarily consisted of cash of $1.2 million and investments of $6.5 million.
The Foundation’s unrestricted funds totaled approximately $2.3 million.
Under the circumstances, given the Foundation’s public purpose and its
relationship to MCPS, it would be appropriate to enter into a formal MOA that
specifies the roles and responsibilities of each entity, which could include the
following:
The Foundation’s solicitation, collection, and administration of funds.
Although the Foundation had an investment policy, the policy did not address
controls over collected funds including proper collateralization of funds, the
use of interest bearing accounts, and procedures for the accounting and
reporting of fund balances. The policy also did not address the need for a
long-term plan that maximizes the use of unrestricted funds.
The Foundation’s conflict of interest policy for board members and
Foundation employees. Although the Foundation had an ethics policy, the
policy was not as comprehensive as those provided for under the State Ethics
law, which addresses standards of conduct, ethics training, and completing
annual financial disclosures by board members and officers. Such a policy
would provide additional assurance regarding the integrity of the Foundation’s
board and its processes, and should include a requirement to advise MCPS of
conflict of interest issues.
The Foundation’s procurement policies for purchases donated to MCPS.
The Foundation’s submission of an annual audit report to MCPS’ Board of
Education.
MCPS’ sharing of priorities, projects and resource requirements; including the
sharing of any non-private data to assist the Foundation’s effort.
MCPS’ providing of any in-kind support functions and the use of its facilities
to the Foundation.
Recommendation 13
We recommend that MCPS enter into an MOA with its affiliated Foundation
detailing the roles and responsibilities for each entity in critical areas such as
conflicts of interest, collection and safeguarding funds, and procurement
policies.
MCPS22 MD Office of Legisla... by Parents' Coalition of Montg...
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