Code Section Group

Education Code - EDC

TITLE 3. POSTSECONDARY EDUCATION [66000 - 101060]

  ( Title 3 enacted by Stats. 1976, Ch. 1010. )

DIVISION 7. COMMUNITY COLLEGES [70900 - 88922]

  ( Division 7 enacted by Stats. 1976, Ch. 1010. )

PART 45. DISTRICTS AND GOVERNING BOARDS [72000 - 72701]

  ( Part 45 enacted by Stats. 1976, Ch. 1010. )

CHAPTER 6. Miscellaneous Provisions [72620 - 72701]

  ( Chapter 6 enacted by Stats. 1976, Ch. 1010. )

ARTICLE 6. Auxiliary Organizations [72670 - 72682]
  ( Article 6 repealed and added by Stats. 1980, Ch. 858, Sec. 2. )

72670.
  

The governing board of a community college district may establish auxiliary organizations for the purpose of providing supportive services and specialized programs for the general benefit of its college or colleges. As used in this article, “auxiliary organization” may include, but is not limited to, the following entities:

(a) Any entity in which any official of a community college district participates as a director as part of his or her official position.

(b) Any entity formed or operating pursuant to Article 4 (commencing with Section 76060) of Chapter 1 of Part 47.

(c) Any entity which operates a commercial service for the benefit of a community college or district on a campus or other property of the district.

(d) Any entity whose governing instrument provides in substance both of the following:

(1) Its purpose is to promote or assist a community college or district, or to receive gifts, property and funds to be used for the benefit of the community college or district or any person or organization having an official relationship therewith.

(2) Any of its directors, governors, or trustees are either appointed or nominated by, or subject to, the approval of the governing board of the district, an official of the district, or selected, ex officio, from the membership of the student body or the faculty or the governing board or the administrative staff of the district.

(e) Any entity which is designated as an auxiliary organization by the district governing board.

(Amended by Stats. 1981, Ch. 470, Sec. 105.)

72670.5.
  

(a) The Board of Governors of the California Community Colleges may establish auxiliary organizations for the purpose of providing supportive services and specialized programs for the general benefit of the mission of the California Community Colleges.

(b) As used in this article:

(1) “Auxiliary organization” may include, but is not limited to, the following entities:

(A) Any entity whose governing instrument provides in substance both of the following:

(i) That its purpose is to promote or assist the Board of Governors of the California Community Colleges, or to receive gifts, property, and funds to be used for the benefit of the Board of Governors of the California Community Colleges or any person or organization having an official relationship therewith.

(ii) That any of its directors, governors, or trustees are either appointed or nominated by, or subject to, the approval of the Board of Governors of the California Community Colleges or an official of the California Community Colleges, or selected, ex officio, from the membership of the Board of Governors or the administrative staff of the California Community Colleges.

(B) Any entity which, exclusive of the foregoing subdivisions of this section, is designated as an auxiliary organization by the Board of Governors of the California Community Colleges.

(2) “District governing board” includes the Board of Governors of the California Community Colleges, unless the context requires otherwise.

(c) Any agreement between the Board of Governors of the California Community Colleges and an auxiliary organization established pursuant to this section shall provide for full reimbursement from the auxiliary organization to the Board of Governors of the California Community Colleges for any services performed by the employees of the board under the direction of, or on behalf of, the auxiliary organization.

(Added by Stats. 1998, Ch. 954, Sec. 15. Effective January 1, 1999.)

72671.
  

An auxiliary organization may enter into a joint powers agreement with any federal, state, or local governmental entity pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code.

(Repealed and added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72672.
  

(a) A certified public accountant shall be selected by each auxiliary organization described in Section 72670. Upon being notified of the certified public accountant selected by an auxiliary organization, the district shall forward the applicable auditing and reporting procedures to the selected certified public accountant. In accordance with procedures prescribed by the Board of Governors of the California Community Colleges, such certified public accountant shall annually audit any and all community college auxiliary funds. The auxiliary organizations shall contract for and receive such audit annually, and shall submit such audit to the district governing board and to the board of governors. Auxiliary organizations shall annually publish an audited statement of their financial condition which shall be disseminated as widely as feasible and be available to any person on request. When an auxiliary organization primarily serves a single community college of the district, publication in the campus student newspaper shall be deemed compliance with this requirement. When an auxiliary organization serves the district governing board, distribution of the published audited statement of its financial condition at a regularly scheduled meeting of the district governing board shall be deemed compliance with this requirement.

(b) When an auxiliary organization primarily serves a single community college of the district, the president of that community college, and when an auxiliary organization primarily serves a district, the superintendent of the district, shall be responsible for ascertaining that all expenditures are in accordance with policies of the district governing board, the propriety of all expenditures, and the integrity of the financial reporting made by auxiliary organization.

(c) The purposes and operations of an auxiliary organization shall be conducted in conformity with general regulations established by the board of governors and with implementing regulations which shall be established by each district governing board prior to the establishment of an auxiliary organization. The implementing regulations established by a district shall be submitted to, and approved by, the chancellor’s office prior to the recognition of an auxiliary organization by that district. At such time as a district may recognize an auxiliary organization, it shall submit a copy of the articles of incorporation, bylaws, or other governing instruments of the auxiliary organization to the chancellor’s office. The accounting procedures of such auxiliary organizations shall be comparable to those that govern the auxiliary organizations established under Chapter 7 (commencing with Section 89900) of Part 55. The regulations shall include provisions requiring the governing board of each auxiliary organization to provide salaries, working conditions and benefits for the full-time employees of each auxiliary organization which are comparable to those provided district employees performing similar services; provided, however, that the regulations may permit retirement benefits, or permanent status benefits, or both, to be withheld from temporary and executive employees of each auxiliary organization. For the purposes of this subdivision, a “temporary employee” is (1) an employee employed for a research project, workshop, institute, or other special project funded by any grant, contract, or gift; or (2) an employee whose contract of employment is for a fixed term not exceeding three years. For the purposes of this subdivision, an “executive employee” is any management employee with responsibility for the development and execution of auxiliary organization policy and includes, but is not limited to, general managers, business managers, directors, and similar positions. For those full-time employees whose duties are not comparable to classes in the district, the salaries established shall be at least equal to the salaries prevailing in other educational institutions in the area or commercial operations of like nature.

(d) Retirement benefits may be provided by other than the Public Employees’ Retirement System. A contract for participation in the Public Employees’ Retirement System in accordance with the terms and conditions of the public employees’ retirement law shall be deemed to satisfy fully the requirements of subdivision (c) with respect to retirement.

Notwithstanding subdivision (c), the regulations established by the district governing board may exempt the board of directors of any newly created auxiliary organization from the requirement of providing retirement benefits for a period not to exceed three years from the date that the auxiliary organization is established.

(Repealed and added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72673.
  

Student body organizations not formed or operating pursuant to Article 4 (commencing with Section 76060) of Chapter 1 of Part 47; student or faculty societies, social clubs, fraternities, and sororities; and alumni associations shall be exempt from the provisions of this article, unless any such organization, society, club, fraternity, sorority, or association has been established as an auxiliary organization pursuant to the provisions of this article.

This section shall not be construed to alter or limit the powers of the district governing board to establish rules and regulations governing organizations which maintain an official relationship with a college or district or which uses the name or facilities of the college or district.

(Amended by Stats. 1981, Ch. 470, Sec. 106.)

72674.
  

Each auxiliary organization formed pursuant to this article, shall have a board of directors composed, both as to size and categories of membership, in accordance with regulations established by the district governing board.

Each board of directors shall, during each fiscal year, hold at least one business meeting each quarter. The board of directors shall have the benefit of the advice and counsel of at least one attorney admitted to practice law in this state and at least one licensed certified public accountant. Neither the attorney at law nor the certified public accountant need be members of the board of directors.

No auxiliary organization shall accept any grant, contract, bequest, trust, or gift, unless it is so conditioned that it may be used only for purposes consistent with policies of the district governing board.

Each board of directors of an auxiliary organization shall conduct its business in public meetings in accordance with the provisions of Chapter 9 (commencing with Section 54950) of Part 1 of the Government Code.

(Repealed and added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72675.
  

(a) The board of directors of an auxiliary organization shall approve all expenditures and fund appropriations. Appropriations of funds for use outside of the normal business operations of the auxiliary organization shall be approved in accordance with district policy and regulations by an officer designated by the district governing board.

(b) The district governing board, in accordance with regulations of the Board of Governors of the California Community Colleges, shall do all of the following:

(1) Institute a standard systemwide accounting and reporting system for businesslike management of the operation of these auxiliary organizations.

(2) Implement financial standards that will ensure the fiscal viability of these various auxiliary organizations. The standards shall include proper provision for professional management, adequate working capital, adequate reserve funds for current operations and capital replacements, and adequate provisions for new business requirements.

(3) Institute procedures to ensure that transactions of the auxiliary organizations are within the educational mission of the district.

(4) Develop policies for the appropriation of funds derived from indirect cost payments not required to implement paragraph (2). Uses of these funds shall be regularly reported to the district governing board.

(Amended by Stats. 2005, Ch. 654, Sec. 6. Effective October 7, 2005.)

72676.
  

Operations of commercial services on a campus, such as a food service or bookstore, or such commercial services as may be provided in a student union, shall, when operated by an auxiliary organization, be self-supporting.

Any surplus funds from commercial operations shall be used for such purposes as are consistent with regulations of the district governing board.

(Added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72677.
  

No member of the board of directors of an auxiliary organization shall be financially interested in any contract or other transaction entered into by the board of which he or she is a member. Any contract or transaction entered into in violation of this section is void.

(Added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72678.
  

No contract or other transaction entered into by the board of directors of an auxiliary organization is void under the provisions of Section 72677; nor shall any member of such board be disqualified or deemed guilty of misconduct in office under such provisions, if both of the following conditions are met:

(a) The fact of such financial interest is disclosed or known to the board of directors and noted in the minutes, and the board thereafter authorizes, approves, or ratifies the contract or transaction in good faith by a vote sufficient for the purpose without counting the vote or votes of such financially interested member or members.

(b) The contract or transaction is just and reasonable as to the auxiliary organization at the time it is authorized or approved.

(Added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72679.
  

The provisions of Section 72678 shall not be applicable if any of the following conditions are met:

(a) The contract or transaction is between an auxiliary organization and a member of the board of directors of that auxiliary organization.

(b) The contract or transaction is between an auxiliary organization and a partnership or unincorporated association of which any member of the governing board of that auxiliary organization is a partner or in which he or she is the owner or holder, directly or indirectly, of a proprietorship interest.

(c) The contract or transaction is between an auxiliary organization and a corporation in which any member of the board of directors of that auxiliary organization is the owner or holder, directly or indirectly, of 5 percent or more of the outstanding common stock.

(d) A member of the board of directors of an auxiliary organization is interested in a contract or transaction within the meaning of Section 72677, and without first disclosing such interest to the governing board at a public meeting of the board, influences or attempts to influence another member or members of the board to enter into the contract or transaction.

(Added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72680.
  

It is unlawful for any person to utilize any information, not a matter of public record, which is received by the person by reason of his or her membership on the board of directors of an auxiliary organization, for personal pecuniary gain, regardless of whether he or she is or is not a member of the board at the time such gain is realized.

(Added by Stats. 1980, Ch. 858, Sec. 2. Effective August 31, 1980.)

72682.
  

An auxiliary organization that was in existence on August 31, 1980, shall continue to operate under Article 6 (commencing with Section 72670) of Chapter 6 of Part 45, as it read immediately prior to August 30, 1980, until the time, if any, that the organization is recognized pursuant to this article.

(Amended by Stats. 2005, Ch. 654, Sec. 7. Effective October 7, 2005.)

EDCEducation Code - EDC6.