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NYS Comptroller


Taxpayers' Guide to State and Local Audits

State University of New York
Oversight of Campus Foundations

Issued: February 26, 2018
Link to full audit report 2016-S-93
Link to 90-day response

To determine if the State University of New York’s System Administration is providing sufficient oversight of campus foundations to make certain the campus foundations conduct their activities in accordance with applicable laws, rules, and regulations. The audit covers the period July 1, 2013 through October 12, 2017.

The State University of New York’s (SUNY) State-operated campuses are authorized to contract with foundations, which are private, not-for-profit corporations, to support fundraising efforts, real property management, or other activities and functions that are not specifically vested with the campus. Generally, foundations receive and manage donations and make these resources available to the campus to support approved programs and activities.

SUNY’s Board of Trustees grants oversight responsibility of the campus foundations to the University Controller’s Office (UCO) and the Office of the University Auditor (OUA). Both OUA and UCO are part of SUNY’s System Administration (SSA). OUA is responsible for conducting periodic audits of the foundations, while UCO is responsible for ensuring the foundations have the required contracts with the campuses and for reviewing the foundations’ annual audited financial statements, management letters, and corrective action plans.

As of June 30, 2015, SUNY’s 30 campus-related foundations had net assets totaling $2.1 billion. Two foundations, Stony Brook Foundation, Inc. (SBF) and University at Buffalo Foundation, Inc. (UBF), controlled $1.1 billion, more than half of the total foundation assets. This report includes our examination of SSA’s oversight of the foundations, as well as our review of certain SBF and UBF operations.

Key Findings
We identified certain deficiencies in SSA’s oversight of the campus foundations and in certain areas of the foundations’ operations.

  • 10 of the 30 foundations were operating without the required contracts with the campuses while continuing to oversee and manage donations and resources (totaling $1.6 billion) on behalf of those campuses.
  • 16 of the foundations have not been audited by OUA since at least 2007.
  • SSA does not routinely obtain or review certain available documentation that could be used to assess risk, such as the foundations’ policies and IRS Form 990, which provide details on an organization’s governance, finances, and activities.
  • Certain foundations have not established required policies and procedures for key business functions, or their policies are inadequate or contain questionable provisions. For instance:
    • SBF lacked an agency account policy, despite maintaining a significant agency account balance of about $40 million as of June 30, 2015. (Agency accounts are used to receive and disburse non-State funds [from sources such as student activity fees and student club fees] for activities for students, faculty, and others.)
    • Neither SBF nor UBF had documented policies and procedures for obtaining contracted services, including provisions for competitive bidding. During the course of the audit, we identified contracts that were not competitively procured.
    • SBF’s and UBF’s payroll-related policies lacked provisions to ensure the compensation they were funding was justified. We also identified two individuals who were working for the University at Buffalo but were compensated by UBF – and not the University at Buffalo – while also receiving a State pension. UBF paid these individuals $118,696 and $119,565, respectively. If these individuals were paid by the University at Buffalo, they would have been subject to the limitations in the Retirement and Social Security law on the annual compensation of retirees who return to public employment.

Key Recommendations

  • Work with campuses to ensure all foundation contracts are executed on a timely basis.
  • Routinely evaluate relevant, available information, such as the foundations’ IRS Form 990s and their policies and procedures, to assess risk in the foundations’ operations. Incorporate identified risks into the audit planning process and consider performing audits that address high-risk areas.
  • Ensure all foundations have thorough policies and procedures that adequately address all areas specified in the Guidelines for Campus-Related Foundations.
  • Review the questionable expenditures identified by our audit and determine whether they are reasonable and consistent with the foundations’ mission to support campus programs and activities. Advise the foundations to take corrective measures to resolve the identified deficiencies, as warranted.

Other Related Audits/Reports of Interest
State University of New York: Oversight of Campus-Related Foundations (2006-S-96)
State University of New York: Selected Procurement and Contracting Practices (2014-S-19)

State Government Accountability Contact Information:
Audit Director: Andrea Inman
Phone: (518) 474-3271; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236