Sept. 20, 2007

Last month, the Lucile Packard Foundation for Children's Health uncovered evidence through routine accounting processes that a former employee in our accounting department had diverted foundation funds for personal use.

Independent investigators confirmed that the diverted amount totaled approximately $350,000 over five years, and that only a single employee was involved. We have filed reports with the appropriate authorities, and our insurance will cover our financial losses.

The investigators have confirmed that all donations made to the foundation in support of Packard Children's Hospital and the Stanford School of Medicine were directed to the programs for which they were designated. Also, the foundation's investments in community grantmaking and our information program were not affected by these events.

We are disappointed by and regret this breach of trust, and we have taken steps to strengthen our systems to prevent a reoccurrence. We appreciate your continued support as we pursue our mission of promoting, protecting and sustaining the health of children.

The Lucile Packard Foundation for Children's Health is a public charity that raises funds for Lucile Packard Children's Hospital, makes grants to nonprofit organizations in Santa Clara and San Mateo counties, and provides data on the state of children's health. The foundation is independent of both Packard Children's Hospital and the Los Altos-based David and Lucile Packard Foundation.