Foundation must turn over financial records

By ANDREA JOHNSON

Staff Writer

ajohnson@minotdailynews.com

University development foundations must release expenditure records under the state’s open records law because they are public entities, according to an opinion issued by State Attorney General Wayne Stenehjem on Monday.

Stenehjem issued the opinion in response to a query from Rob Port of Minot, who writes the SayAnything blog.

In December, Port requested that the North Dakota State University Development Foundation provide him an itemized copy of all payments to or on behalf of NDSU President Dean Bresciani for 2013. He also requested a copy of all expenditures by the NDSU foundation in general for 2013 through Dec. 23.

According to Stenehjem’s opinion, the university foundation provided Port with records on Jan. 7 regarding Bresciani’s discretionary account supported by the foundation’s resources. However, the foundation refused to release a record of general foundation expenditures because “most of our expenditures are non-public fund expenditures; we have our own staff (non-public employees) and our Trustee’s (sic) make independent decisions on how to expend the our resources.” The NDSU Development Foundation directed Port to review the audited financial statements available on the foundation’s website. Port then asked Stenehjem to issue an opinion on the legality of the foundation’s refusal to release the records.

Foundation board members told Stenehjem that Port’s request was “overly broad” and it would cost too much and put too great a strain on the resources of the foundation to release all of the records Port was asking for. They also reasoned that some of the records could be exempt from the state’s open records law, though they hadn’t identified any specific record as exempt or confidential, and finally claimed that the foundation isn’t a public entity.

On April 24, in an open records request related to the Dickinson State College Foundation, Stenehjem clarified that college foundations are public entities. Even though they are private, nonprofit corporations, they act on behalf of state-funded universities when they solicit and receive donations or promote and raise funds for a college or university.

After that opinion was issued, the NDSU Development Foundation was given another opportunity to add to its rationale for refusing to release the records to Port. The Foundation repeated its previous arguments and also added that some of its activities are nongovernmental functions that aren’t subject to the state open records law. It also argued that student scholarship records are exempt from the state’s open records law.

“Here, the NDSU Development Foundation did not provide records of its expenditures because it claims some of the work done by the foundation is not “public business” or does not relate to its “governmental functions” and, therefore, is not subject to the open records law,” wrote Stenehjem. “As an example, the foundation contends that its electricity bill is not “public business” and analyzing all of its expenditures to extract such records would be cost prohibitive. Records related to expenditures for resources a public entity needs to operate, such as electricity, relate to the entity’s public business. The NDSU Foundation failed to provide evidence that it retains any expenditure records unrelated to its public business or the governmental functions it performs on behalf of NDSU, nor has it cited any law suggesting its expenditure records are exempt or confidential.”

Though the Foundation argued that it would cost too much and take too much time to compile the records, Stenehjem ruled that isn’t a sufficient reason not to release the records.

“Such allegations are not exceptions to the open records law and are not legal bases for denying a records request. The amount of work needed to respond to a records request may affect the time necessary to respond, but it does not render the request insufficient under N.D.C.C. 44-04-18,” wrote Stenehjem. “Additionally, and as explained in past opinions, if a public entity does not understand a request, it has a duty to contact the requester for clarification in a timely manner. Here, it was only after prompting from this office, approximately four months later, that the NDSU Development Foundation sought clarification from the requester. It was not until May 22, 2014, five months after Mr. Port’s initial request, and only after numerous interventions from this office, that the NDSU Development Foundation produced any sort of expenditure records to the requester. The NDSU Development Foundation spent more time trying to avoid the open records request than determining how to fulfill the request and, instead of working with its requester, continually denied the request on incorrect legal grounds.”

Stenehjem ruled that the NDSU Foundation must now release any additional records to Port that are related to its 2013 expenditures. Copies have to be provided free of charge, but the Foundation can charge an appropriate fee for locating the records. If the Foundation doesn’t comply, they will be liable for attorney fees and costs and charges if civil action is taken.