Recommendation 6: The Committee recommends the institution provide evidence of a contractual or formal agreement with it's foundation that (1) accurately describes the relationship between the institution and the foundation and (2) describes any liability associated with that relationship.

During the course of its review, the On-Site Committee noted that Edison State College has two institution-related direct support organizations. The Committee noted that the articles of incorporation of each direct support organization provide that they are constituted as separate corporations and that each is to be governed by its own Board of Directors. The Committee examined the legal authority by which the College had created the direct support organizations and commented that both College policy and the inclusion of the District President and members of the District Board of Trustees on the boards of directors of the direct support organizations ensured consistency with the College’s mission.

However, notwithstanding the foregoing, the On-Site Committee concluded that there was no contractual or other formal agreement between the College and the two direct support organizations that accurately describes the relationship between the College and the direct support organizations and any liability associated with that relationship as required by Standard 3.2.13. This lack of documentation resulted in the recommendation.

In response to the Committee’s recommendation, the College and its two direct support organizations have entered into revised Memoranda of Understanding and the applicable College Policies have been amended. Each revised Memorandum of Understanding has been amended to include the following new provisions in substantially the following form:

WHEREAS, the purpose of this Memorandum of Understanding is to guide and direct the parties respecting their affiliation, cooperation and working relationship, inclusive of anticipated future arrangements and agreements in furtherance thereof; and,

WHEREAS, College is a Florida College System institution as set forth in Section 1000.21(3) [ 1 ], Florida Statutes and is constituted as a political subdivision of the State of Florida; and,

WHEREAS, Section 1004.65 [ 2 ], Florida Statutes, provides that each Florida College System institution shall be governed by a district board of trustees under statutory authority and rules of the State Board of Education and shall consist of the county or counties served by the institution pursuant to Section 1000.21(3)(f) [ 3 ], Florida Statutes and be an independent, separate, legal entity created for the operation of a Florida College System institution; and,

WHEREAS, the Financing Corporation is a separate legal entity from the College and was organized and incorporated in 2007 pursuant to the provisions of Chapter 617 [ 4 ], Florida Statutes, as a Florida not for profit corporation and has received a designation as a tax exempt entity in recognition that it is organized and operated exclusively for exempt purposes set forth in Section 501(c)(3); and,

WHEREAS, Section 1004.70 [ 5 ], Florida Statutes, provides for the creation of Florida College System institution Direct Support Organizations (“DSO”) and provides for the creation of a DSO through certification by a Florida College System institution board of trustees that such corporation is operating in a manner consistent with the goals of the Florida College System institution and in the best interest of the state; and,

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein, and for good and other valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the College and the Financing Corporation do hereby agree as follows:

LEGAL STATUS OF EDISON STATE COLLEGE AND THE EDISON STATE COLLEGE FINANCING CORPORATION.

The foregoing recitals are true and correct and are herein incorporated by reference. The parties recognize that the College, a political subdivision of the State of Florida, and the Financing Corporation, a Florida not for Profit Corporation, are separate legal entities. Neither the Financing Corporation nor the College shall have any liability for the obligations, acts or omissions of the other party. The Financing Corporation shall not undertake any activity or enter into any transaction or contract that creates any liability for the College, without advance written approval by the President of College. Similarly, the College shall not undertake any activity or enter into any transaction or contract that creates any liability for the Financing Corporation without advance written approval by the President of the Financing Corporation (The only differences between the two memoranda of understanding are the name of the respective corporations and the date of incorporation.).

The newly developed language in the Memoranda of Understanding between the College and the Edison State College Financing Corporation [ 6 ] and the Edison State College Foundation, Inc. [ 7 ] thus describe both the relationship between the College and the direct support organization and also describe any liability associated with that relationship in compliance with Standard 3.2.13.

In addition, the District Board of Trustees also revised its Board Policies governing the two Direct Support Organizations. Direct Board of Trustees Policy 6Hx6:1.03[ 8 ], pertaining to the Edison State College Foundation, Inc., was amended by adding the following:

9. The Foundation shall not accept any gift, donation, grant, enter into any transaction or contract that creates any liability for the College, without advance written approval by the President of the College.

Similarly, District Board of Trustees Policy 6Hx6:1.05 [ 9 ], pertaining to the Edison State College Financing Corporation, was amended by adding the following:

9. Not undertake any activity or enter into any transaction or contract that creates any liability for the College, without advance written approval by the President of the College.

Direct Board of Trustees Policy 6Hx6:1.03 [ 10 ] and 6Hx6:1.05 [ 11 ] thus serve to further identify and describe any liability associated with the relationship between the College and its two direct support organizations.

Supporting Documentation	Description
1. F.S. 1000.21(3)	Florida College System
2. F.S. 1004.65	Florida College System - Governance
3. F.S. 1000.21(3)(f)	Florida College System – Edison State College
4. F.S. 617	Corporations Not For Profit
5. F.S. 1004.70	Florida College System institution Direct Support Organizations
6. Memorandum of Understanding	Financing Corporation
7. Memorandum of Understanding	Foundation
8. Board Policy 6Hx6:1.03	Foundation
9. Board policy 6Hx6:1.05	Financing Corporation
10. Board Policy 6Hx6:1.03	Foundation
11. Board policy 6Hx6:1.05	Financing Corporation