SFAI's Contradicting Declarations About Its Financial Condition

June 28, 2009.  Days after alleging "financial exigency" and before issuing layoff notices to tenured faculty, SFAI reported a healthy financial condition to the City of San Francisco.  SFAI's positive outlook for its present and future is reflected in documents obtained by the Student Action Group from the City of San Francisco. 

As a recipient of City funds, SFAI's financial and other information submitted to the City is subject to public disclosure under the City's Sunshine Ordinance.  In accordance with the Sunshine Ordinance, SFAI agreed that all records related to its contract with the City, all its financial data and financial projections are public records open to public inspection. (Sections 12.2 and 12.3, City of San Francisco Grants of the Arts Contract signed by SFAI Chief Operating Officer Espi Sanjana.) 

On February 13, 2009, in an application to the Grants for the Arts program, SFAI reported that it expected a budget surplus as well as steady or better enrollment numbers through and into 2009/2010. (SFAI's Grants for the Arts Application Supplement.)  At page 7 of the application, SFAI denied that it had any "accumulated deficit."  Although SFAI mentioned the "volatility of the financial markets," SFAI's financial information submitted to the City did not reflect in any way that SFAI was in a danger of immediate insolvency.  Such information tends to contradict SFAI Administration's claims (made during the same time period) that SFAI was almost insolvent, which claims SFAI Administration used to justify layoff notices to nearly 25% of tenured faculty on campus.  (SFAI may stand alone among U.S. colleges and campuses.  Reportedly, no other U.S. campus or university making cuts is laying off tenured faculty.)  

As reflected at page 5 of the same application, in the fiscal year ending June 30, 2008, the Littler Mendelson Foundation contributed $1000 to SFAI.  The law firm of Littler Mendelson is assisting SFAI with the plan to cut the ranks of tenured faculty and defending SFAI against serious charges that it violated, in multiple ways, the faculty collective bargaining agreement.  Many SFAI students and alumni strongly disagree with SFAI Administration's actions, and disapprove of funds being used to pay Littler Mendelson because these funds should be used for educational purposes.   

In addition to its application, SFAI submitted its financial data for years 2007 and 2008 to the California Cultural Data Project Database, from which the Grants for the Arts program generates a Funder Report.  Based on a review of both the Funder Report and SFAI's application submitted in February of 2009, it appears as if, prior to issuing layoff notices, SFAI anticipated a better financial year for 2009 

SFAI Fails to File Current Economic Statement  (Due April 1)

Under Section 10.1 of the City of San Francisco Administrative Code, SFAI was required to file its current Annual Economic Statement to the City Administrator's Office by April 1.  As of the end of last week, SFAI has not yet filed it.  The representative at the City Administrator's Office did not explain what would be the result of SFAI's noncompliance.  However, Section 10.1 states: "All entities applying for or receiving monies from the City and County who do not have on file a current annual economic statement shall file a statement ... before any public monies shall be approved."  This language suggests that the City may not fund SFAI if SFAI fails to submit its current Annual Economic Statement as required.    

The SFAI Action Group urges the SFAI Administration -- specifically President Chris Bratton, CFO/COO Espi Sanjana, Chair Trustee John Sanger and his trustee colleagues  -- to file SFAI's current Annual Economic Statement to the City Administrator as soon as possible.  Noncompliance may jeopardize city funding of SFAI programs and also undermines accountability.  For a copy of SFAI's past annual economic statement, click HERE.