Updated on June 22 at 4 p.m.:

An independent fiduciary review found that the Ventura County Community Foundation undervalued donor-restricted funds due to improper fund management, VCCF announced on June 22.

The seven-month report by auditor KPMG found that the foundation invested permanent funds in money-market accounts, over-allocated interest income to VCCF’s unrestricted funds and charged excessive fund administration fees.

The VCCF submitted the review to the California Attorney General’s office, said VCCF President and CEO Vanessa Bechtel, who took over the job from Hugh Ralston in February 2015.

“These findings were disappointing to say the least, and the board of directors regrets this turn of events,” Bechtel said in a news release. “Every foundation aims to make sure donor funds are being maximized for their intended purpose. Unfortunately, the fiduciary review found otherwise.”

Bechtel said that the next step is to determine the scope of the undervaluation and replenish those funds over time, subject to the AG’s review. The foundation said it is developing a restructuring plan that aims to provide stronger fund oversight and fiscal management.

“We are in advanced discussions to outsource VCCF’s back-end management of the foundation’s funds. At the same time, we will be preserving Ventura County’s local control over grant-making and distributions to the community,” said Bechtel, adding that fund holders may benefit from potentially lower fees, broader investment options and more sophisticated operational platforms offered by a partner institution.

“While no fund holders will see their account balances decrease as a result of this review, some fund holders will see their balances increase on subsequent statements,” she said.

VCCF closed its Center for Nonprofit Leadership in September and has laid off the majority of its staff members, moves that have shaken up the region’s nonprofit and philanthropic sectors.

Employees were reduced from 22 to five, the VCCF said. The restructuring has trimmed the budget more than 60 percent.

VCCF purchased the 53,500-square-foot property at 4001 Mission Oaks Blvd. in Camarillo for $6.9 million from inventor and philanthropist Fred Kavli in 2012 to house the nonprofit center, property records show. The foundation board committed $3 million of the foundation’s capital to the center and pursued a capital campaign to raise $10 million more.

It was put up for sale in January and is listed at $9.8 million.

The center was launched in 1991 as a hub for charities and community groups in the county, providing headquarter space at below-market rents and leadership classes to other nonprofits.

VCCF has linked wealthy donors with community needs since 1987.

Bechtel oversees about $137 million in charitable assets, as well as a scholarship program that awarded $1.2 million to local students in 2014 and 600 funds that grant more than $4 million annually to local nonprofits, according to a news release.

The foundation has sufficient cash to fund operations through September 2017, Bechtel said.

• Contact Alex Kacik at akacik@pacbiztimes.com.