An audit of the Foundation for Pierce College, first approved by the Pierce College Council budget committee in March, reportedly began before the PCC voted to approve the investigation into the foundation’s finances.
The probe is being conducted by the same firm that performs the foundation’s required annual audits, including its 2014 assessment. Senior board Director Floriya Borzenkova and board Chair Denise Robb of the foundation said they are confused by the reasons for this new audit, and said they don’t understand why it is happening.
“They employed the same company that audited us the last two years,” said Borzenkova. “A man from the accounting firm came to our office before the approval from PCC. I gave him our financial statements, and he has our books, but I haven’t heard from him.”
Robb said it was “strange” to have a second audit so soon, and to use the same firm to execute it.
“They just audited us three months ago and it was fine, but now they hired the same company to audit us again,” she said. “If the same company finds anything then they should sue themselves because they’re the ones who just did our audit.”
Pierce College President Kathleen Burke said this audit differs from the required audits conducted annually.
“There are different types of audits,” Burke said. “A general audit is conducted every year, but now a forensic audit is taking place to address questions and allegations regarding millions of dollars that were donated to the foundation.”
The budget committee estimated the cost of the audit at $17,000 at a meeting in early March, and approved the motion to proceed. That figure was then approved unanimously by the PCC at its meeting March 26.
The most recent annual audit was performed by Stern, Kory, Sreden & Morgan. The results of the independent auditors’ report, dated December 10, 2014, is public record and in the document the firm didn’t list any concerns about the foundation’s financial solvency.
According to that document, “the financial position of the Foundation for Pierce College as of June 30, 2014, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.”
An action item form filed by the budget committee on February 27 said the audit is justified, is in response to allegations that the foundation misused funds, and will look back 15 years into the foundation’s financial documents. Borzenkova and Robb said the reasons for the audit remain unclear.
“I don’t know much about it because they won’t tell me what’s going on,” Robb said. “They said it had something to do with McBroom from the Farm Center. He was saying that money was misspent, but they already settled with him, and I thought everything was over and he was leaving.”
Robb said that if questions surrounding the McBroom contract with the foundation are indeed the reason for the audit, the investigation should focus on the college itself.
“The contract that he has is with the college now, not the foundation, and we haven’t been part of that deal for a long time,” Robb said. “It could be that the college should be audited.”
Borzenkova said there haven’t been any indications of wrongdoings by the foundation. She said she is offended by the accusations, and that they hinder the foundation’s purpose.
“We’ve never had any indication that we’ve done anything wrong and that’s why we’re confused,” she said. “The words ‘misuse of the funds’ for me are very offensive. That means it already has happened and makes the foundation look suspicious due to the allegations.”
Borzenkova added that those allegations may hurt the credibility of the foundation.
“This is a community college, and it’s given that name because it has a tight relationship with the community,” Borzenkova said. “People know what’s going on, and when they see that we’re being accused of misusing money, people don’t trust us. It’s hard to work in an environment like this.”
Borzenkova said that college President Kathleen Burke is angry about the usage of money from a legacy fund called The Presidents’ Beautification Fund, and that is part of the reason for the audit.
“It was part of the reason,” Borzenkova said. “Because of our different views, but it was a long time ago.”
The use of the fund money has created a division between the foundation and the administration.
“The president is still angry at the previous board, but she has to put the students before her anger, and realize that they’re gone,” Robb said. “She has to stop holding a grudge against people that no longer work or volunteer here.”
The administration’s anger is misplaced and is damaging the foundation’s reputation, according to Robb.
“If she doesn’t let this go, she’s really hurting the foundation, because she and Rolf Schleicher are telling people that the foundation is in trouble and we’re not,” Robb said.
Burke said any mention of a grudge is “simply not true,” and said that previous board members quit because they were unable to meet the $2,000 annual fundraising minimum required by the foundation’s bylaws. Borzenkova said those claims are incorrect.
“Some board members paid their dues before they quit,” Borzenkova said. “The problem is the people who are on the board are volunteers and are very successful, and they are used to getting respect.”
Mike Cornner, a former foundation board member, said that Burke was incorrect in her assertion as to why members quit. He said he left because he didn’t think that the foundation was able to function and achieve reasonable goals, in part due to the administration.
“The college president wants to control it totally, and that’s not the way it’s supposed to be set up,” Cornner said. “The only way I would have stayed on the board was if there was a complete change of attitude by the college president, which seemed unlikely, or a change in administration with people that were supportive of the kind of work that foundations do.”
Burke maintained that the reason for the board members’ resignations was their failure to meet fundraising requirements, and said she was told so by unnamed former board members.
“I want to see the foundation function as it is intended,” she said. “The foundation’s mission is to raise funds for the college.”
The foundation is ready to move on and place the focus back on students and fundraising, according to Borzenkova, who said she understands that it is necessary for the foundation and administration to come together.
“To be able to raise money, and for the foundation to work properly, we have to work together with the administration,” Borzenkova said.
Robb said the college could have found a better use for the $17,000 that is being spent on the audit.
“We have nothing to hide, but it’s a waste of the college’s money,” Robb said. “I don’t understand why they want to waste the college’s money like that, but they have a right to waste their money.”