SECTIONS 71560-71562

71560.  (a) The endowment may receive charitable contributions orany sources of income that may be lawfully received, including loansfrom the state. (b) The endowment shall administer any funds it receives inaccordance with this division. (c) (1) Except as provided in paragraph (2), the endowment shallinvest and manage any funds it receives so that the investments shallprovide a source of income in perpetuity and the principal amountconsisting of charitable contributions and donations, including costsavings donated pursuant to Section 6427.3 of the Fish and Game Code,shall not be spent. Any returns on investments made by the endowmentare the only funds that shall be available for expenditure by theendowment. (2) Ten percent of any funds received by the endowment pursuant toSection 6427.3 of the Fish and Game Code in a calendar year shall beallocated by the endowment board, pursuant to Section 71552, asgrants for projects or programs consistent with the purpose of thischapter within 24 months of receipt of the funds. The majority ofthese funds shall be granted to state agencies engaged in coastal andocean protection. (d) The endowment shall invest and manage any funds it receives inaccordance with the Nonprofit Public Benefit Corporation Law (Part 2(commencing with Section 5110) of Division 2 of Title 1 of theCorporations Code). (e) The accounts of the endowment shall be audited annually inaccordance with generally accepted auditing standards by independentcertified public accountants. (f) The financial transactions of the endowment for any fiscalyear may be audited by the Bureau of State Audits. (g) Each recipient of assistance by grant, contract, or loanpursuant to this division shall keep records reasonably necessary todisclose fully the amount of the assistance, the disposition of theassistance, the total cost of the project or undertaking inconnection with which the assistance is given or used, the amount andnature of that portion of the cost of the project or undertakingsupplied by other sources, and other records that will facilitate aneffective audit. Each recipient of a fixed price contract awardedpursuant to competitive bidding procedures is exempt from therequirements of this subdivision. (h) The endowment, or its authorized representative, and theBureau of State Audits shall have access to any records necessary forthe purpose of auditing and examining all funds received or expendedby the recipients of assistance.71561.  The endowment funds shall be administered and managed inaccordance with all of the following: (a) Reasonably prudent investor standards that will give the fundthe capacity to achieve reasonable rates of return on investmentsimilar to those of other prudent investors for long-terminvestments. (b) Use of generally accepted accounting practices, andexpenditure and investing procedures. (c) Investment policies that are consistent with the UniformPrudent Investor Act (Article 2.5 (commencing with Section 16045) ofChapter 1 of Part 4 of Division 9 of the Probate Code), and with theUniform Management of Institutional Funds Act (Part 7 (commencingwith Section 18501) of Division 9 of the Probate Code), asapplicable.71562.  Funds held by the endowment shall revert to the state or toanother public agency or nonprofit organization approved by the stateif the endowment does any of the following: (a) Ceases operations. (b) Is dissolved. (c) Becomes bankrupt or insolvent. (d) Fails to perform its fiduciary duties.