1. (a) A state hospital may have a 501(c)(3) organization (i.e., volunteer services council (VSC)) to generate resources on its behalf.
2. (b) A state hospital may work with its VSC to enhance fund-raising activities.
3. (c) The state hospital superintendent and community relations director are nonvoting members of the VSC board and executive committee.
4. (d) No state hospital employee of department may be a VSC board member or registered agent.
5. (e) No state hospital employee's spouse or minor child may be a VSC board member or registered agent.
6. (f) State hospital superintendent must approve all nominees for the VSC board.
7. (g) Community relations director must approve all state hospital and VSC fund-raising activities.
8. (h) Community relations director may make expenditures of up to $300 on behalf of the VSC for the benefit of consumers.
9. (i) The community relations department may process and issue receipts for donations to the VSC.
10. (j) No employee may sign a VSC check or use a VSC debit or credit card.

11. (k) The community relations director may maintain a VSC petty cash fund of up to $300 to be used for the benefit of consumers if guidelines regarding the fund's purpose and maximum dollar amount are included in the memorandum of understanding between the state hospital and the VSC.

    1. (1) The community relations director must appoint a primary and alternate custodian for the VSC petty cash fund.

    2. (2) The primary custodian of the petty cash fund:

       1. (A) is responsible for maintaining receipts and accurate documentation of all funds disbursed and for furnishing this documentation to the treasurer of the VSC; and
       2. (B) must sign a responsibility statement for the funds.
    3. (3) An officer of the VSC, or an employee outside of the community relations department, must reconcile the petty cash fund at least once every two months.

12. (l) Department state hospitals may provide the following items of support for the VSC:

    1. (1) office space;
    2. (2) fund-raising assistance;
    3. (3) annual training for board members and officers;
    4. (4) clerical and administrative services; and
    5. (5) assistance in the coordination of activities.

13. (m) Funds generated by a VSC minus legitimate expenses may only be used for:

    1. (1) the needs of clients;
    2. (2) the enhancement of existing state hospital operations;
    3. (3) recognition and education projects; and
    4. (4) new initiatives to improve the quality of life clients.

14. (n) Funds generated by the VSC may not be used for:

    1. (1) recognition events, receptions, or gifts for a legislator;
    2. (2) recognition events, receptions, or gifts for an employee, which is not part of an established award program;
    3. (3) political contributions or lobbying efforts;
    4. (4) alcoholic beverages, unless used at a fund-raising event;
    5. (5) loans, including travel advances;
    6. (6) operating programs, or contracting for programs on behalf of the department;
    7. (7) cash awards or salary supplementation for employees; and
    8. (8) other purposes determined by the department to be unethical, unlawful, or inappropriate.
15. (o) A VSC must not hold monies on behalf of employees for non-VSC-sponsored activities.
16. (p) All funds and goods donated to the VSC remain the property of the VSC until the department accepts them.
17. (q) The department has the right to review and approve all VSC donations of real property and any permanent improvements to existing real property that may be donated to the state hospital by the VSC.

18. (r) VSC must:

    1. (1) coordinate its activities with state hospital administration. The state hospital superintendent has full authority over all functions and projects concerning the state hospital, including clients and employees;
    2. (2) annually agree to and sign a memorandum of understanding (MOU) governing the relationship between the state hospital and the VSC;
    3. (3) obtain an one-year audit at least once every three years and, if has annual gross receipts in excess of $100,000, obtain an annual certified, independent audit; and
    4. (4) provide bond for its officers and signatory agents.
19. (s) VSC members are prohibited from influencing the passage or defeat of legislation as a representative of the VSC, the state hospital, or the department.

Source Note:The provisions of this §417.306 adopted to be effective April 24, 2008, 33 TexReg 3292.