Resnick: Questions Remain Regarding Rancho Santiago Community College Partnership with Saudi Arabia

The year 2019 marks four years the for-profit equity partnership between the Rancho Santiago Community College District (RSCCD) Foundation and a Saudi company became known to the public. Even after four years there are still many more questions than answers regarding what is known as the Rancho-Baha College partnership.

In 2015 RSCCD Chancellor Raul Rodriguez promised the partnership would bring in $105 million of unrestricted funding to the District over a three year period. The $105 million figure eventually dropped to $22 million than to $1 million and with the partnership ending later this year, there’s just a $60,000 check sitting in a bank while the accountants figure out the tax ramifications.

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Rodriguez defied all odds to push this partnership. He ignored the Brown Act by claiming the Foundation did not need to adhere to public disclosure law. When the elected trustees were questioned about the partnership, they claimed they were advised the Foundation was a separate entity and they had no oversight. And when it was brought up that numerous colleges and organizations had lost significant sums dealing with the Saudis in similar ventures, Rodriguez claimed the RSCCD Foundation’s partnership would be different. Even the publishing conglomerate, Pearson knew better and bailed out of their agreement with the Saudis, but Rodriguez somehow thought he had the answers. The real problem was few knew what Rodriguez and the Foundation were doing.

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Last year I contacted the Foundation auditor, Tina Henton of Clifton Larson Allen in Glendora. Ms. Henton was unaware of anything related to Saudi Arabia despite annual audits of the Foundation. She did inform me the Foundation by law is considered an auxiliary organization and the elected trustees have full oversight of the Foundation. As an auxiliary organization the Foundation is required to reimburse any expenses related to the Saudi partnership to the District and the elected trustees and college administrators could be liable for the funds.

I reached out to RSCCD Trustee, Phil Yarbrough and urged him to find out exactly what the Foundation was up to. He recommended an audit specifically related to the Saudi partnership be conducted. Ms. Henton’s firm put together an extensive proposal, but the recommendation to proceed was tabled by the RSCCD elected trustees despite Mr. Yarbrough’s insistence to move forward.

At the September 4, 2018 Foundation meeting Rodriguez announced that there was a “little issue”. The little issue was the auditors informed the Foundation as a non-profit 501c corporation they could not engage in any for-profit partnership. When one Foundation board member asked why, “after all this time” it took so long for the auditors to provide a ruling regarding the partnership, there was no direct response to the question. The failure to respond was understandable considering the most recent audit report suggested the Foundation look for unrestricted funding sources, but warned the need to consult with the auditors to make certain they were in compliance with the law. The warning was obviously ignored the past four years.

Defying disclosure law and ignoring their own auditors is one thing. Rodriguez and his Foundation board now must answer to the taxpayers who financially support RSCCD and are owed reimbursement for this failed venture.

 

 

Dr. Barry Resnick, a professor of counseling, is in his 39th year as a faculty member in the Rancho Santiago CCD. He has resided with his family in the city of Orange for over 30 years.

 

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