After laying off the majority of its staff and enacting deep budget cuts, the Ventura County Community Foundation in Camarillo, California, has released findings from an independent review of its fiscal management to the Charitable Trusts Section of the California Attorney General’s office.
Conducted by KPMG, the seven-month review revealed that a number of the foundation’s donor-restricted funds had been undervalued due to improper fund management, that the foundation had invested permanent funds in money-market accounts and over-allocated interest income to its unrestricted funds, and that it had charged excessive administration fees. The foundation, which has requested that the attorney general’s office verify the scope and accuracy of the proposed restatements to the independent review, plans to determine the scope of the undervaluation of the donor-restricted funds and figure out a way to replenish the funds over time, subject to review by the AG. In the meantime, the AG’s office continues to review the operations of the foundation, which has implemented a multi-step plan to improve its fund oversight and fiscal management.
Hired in February 2015, Vanessa Bechtel, CEO of the embattled foundation, implemented staff cuts between May and September that reduced the foundation’s headcount from twenty-two to five and cut salaries for those who remained by up to 20 percent. In the past year, the foundation has cut its budget by more than 60 percent.
According to the Pacific Coast Business Times, VCCF purchased a 53,500-square-foot property in 2012 from philanthropist Fred Kavli for $6.9 million to house its Center for Nonprofit Leadership. The board also committed $3 million to the center and launched a campaign to raise an additional $10 million in support of the center. But after allegations of fiscal mismanagement at the foundation came to light, the center was closed in September and subsequently put up for sale with an asking price of $9.8 million.
On the same day that the foundation announced the review’s findings, the Central Valley Community Foundation, formerly known as the Fresno Regional Foundation, announced that it had parted ways with CEO Hugh Ralston, Bechtel’s predecessor at VCCF. Former board member David Johnson will serve as interim CEO of CVCF until a replacement for Ralston is found.
"These findings were very disappointing to say the least, and the board of directors regrets this turn of events," Bechtel said of the fiduciary review. "Every foundation aims to make sure donor funds are being maximized for their intended purpose. Unfortunately, the fiduciary review found otherwise."