Santa Clara County Grand Jury
• 2007-2008
2007-2008 Santa Clara County Civil Grand Jury Report City Fails to Hold History San Jose Accountable
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 3 findings
F1
The City of San Jose has failed in its fiduciary oversight of History San Jose. In spite of recommendations made by the Macias Consulting Group, the City Council approved a subsidy increase to HSJ this year of over $300,000 without HSJ meeting its contractual requirements for documentation.
Related Recommendations (3)
R1a
The City Council should determine based on its overall budget and priorities the appropriate subsidy level for History San Jose.
R1b
Based on its spending priorities and the subsidy level it determines to be appropriate, the City should amend its Operation Agreement to adjust its subsidy schedule with History San Jose and hold HSJ to its contractual agreements.
R1c
The responsibility for arts and cultural nonprofit oversight should reside within a City department with sufficient authority and appropriate staffing to enforce contract compliance.
F2
History San Jose’s organizational structure lacks the overall leadership, financial management, and fundraising strength to meet its contractual obligations.
Related Recommendations (1)
R2
The HSJ Board should re-evaluate the organization’s management structure and hire a full-time CFO and full-time fundraiser. 6
F3
History San Jose’s Board is not meeting their responsibilities as outlined in HSJ’s Board Responsibilities document.
Related Recommendations (1)
R3
History San Jose should recruit Board members with financial and management expertise to mentor HSJ management and oversee the turnaround of the organization. All Board members need to meet and exceed their fundraising goals, bring in additional Board members, and come up with creative means to enable HSJ to increase fundraising capabilities. Key
Conclusions 9
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CL1 Page 6The City of San Jose has failed in its fiduciary oversight of History San Jose. In spite of recommendations made by the Macias Consulting Group, the City Council approved a subsidy increase to HSJ this year of over $300,000 without HSJ meeting its contractual requirements for documentation.
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CL2 Page 6History San Jose’s organizational structure lacks the overall leadership, financial management, and fundraising strength to meet its contractual obligations.
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CL3 Page 7History San Jose’s Board is not meeting their responsibilities as outlined in HSJ’s Board Responsibilities document.
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CL4 Page 5The original contract between the City of San Jose and HSJ was established on the basis of a decreasing subsidy for the City with revenue generation being transferred to HSJ. Over the last ten years, as the subsidy has decreased, HSJ has not raised the offsetting revenues or adjusted its operating model for decreased expenditures.
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CL5 Page 5The 2007 audit report from the Macias Consulting Group pointed out significant financial and organizational issues within HSJ.
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CL6 Page 5HSJ is not staffed to provide appropriate financial management as it lacks a full- time CFO and full-time fundraiser. HSJ management has not demonstrated an ability to develop and manage to a balanced budget.
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CL7 Page 5The City of San Jose failed to enforce the Operation Agreement with HSJ and failed to heed auditors’ and HSJ’s early warnings of financial problems.
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CL8 Page 5Based on its current structure, the City of San Jose is not organized to provide sufficient oversight of nonprofit organizations including contract compliance and financial analysis.
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CL9 Page 5The City engaged the services of two professional consultants, The Wolf Organization and the Macias Consulting Group, but did not follow their
No Responses Found 1
Government entities assigned to respond to this report. No response documents have been linked in our database.
San Jose
City