State audit shakes U of L’s Foundation

By on January 28, 2016
Student Opinion

By Ashley Carroll–

2015 was a big year for the University of Louisville Foundation. The board is a non-profit organization directed by 15 board members who oversee U of L fundraising dollars. Back in the summer of 2015, the foundation came under so much scrutiny the state auditor was sent in to check things out.

Trustee Steve Wilson requested state auditor Adem Edelen investigate the foundation. Edelen showed up right after U of L’s President James Ramsey, his provost and chief of staff received a hefty $4.2 million in deferred compensation.

The ULF board claims it offered Ramsey more incentives after he was scouted in 2007 and 2008 by other universities.

Trustee Stephen Campbell told Insider Louisville he waited nearly a year for a list of payments the foundation made to U of L employees. It seems Wilson was a whistle-blower for a major problem within the foundation’s infrastructure. Those who donate to the foundation went looking for more oversight functions to see where exactly their money was going within the university. They were looking for more transparency. According to Edelen, “The foundation is critically important to the university, but it must be fully transparent.”

Insert new state auditor Mike Harmon. He announced Jan. 12 that he’s going to continue last year’s audit, after another trustee, Robert Hughes, requested an extension.

The foundation’s board is firing back. Board members Brucie Moore, Mark Lynn, Ulysses Bridgeman and Larry Benz sent a letter to Harmon expressing their surprise over the extent of data requested last September. A report from WFPL news prompted the board members to write this letter. In WFPL’s report, Edelen said his office’s review “would extend beyond just the governance and organization of the Foundation, but include its financial management as well.” In the letter, the opposing board members talked of numerous financial exhibits regarding both academics and fundraising by the university and the board. However, the auditor’s office could not find records of these mentioned exhibits.

It seems the board members got a little spooked at the request for the audit’s extension. Maybe they were too concerned about their egos and ignored the most important factor of all this: their seats could be in jeopardy. Perhaps their letter really was a ploy to get all their achievements out there and attempt to serve as a defense.

No one is pointing fingers, but it does say something when a trustee requests a state audit of the non-profit organization to which they donate.

Here’s an excerpt straight from the letter: “Candidly, we were surprised at the extensive data request for your examination, which brings into question the intent of the review. As it was explained to us, after receiving this information, you and your staff will determine issues to be addressed in the ‘scope’ of the engagement. It has been further conveyed to us that it could be a lengthy process, which could impede our future fundraising initiative, we are finalizing plans for a new $1.5 billion capital campaign.”

Since the letter was sent in Sept. 2015, why are the board members now asking why the scope of the audit has been extended? U of L spokesman John Karman had a message from the board’s chairman Larry Benz: “The ongoing concern is that given the depth of material submitted, we still haven’t been told of the scope of the audit.”

All of this is happening around the same time that U of L’s Board of Trustees seeks to split the roles of the university president and the foundation head. President Ramsey is both president of U of L as well as the U of L Foundation. These dual roles are uncommon at most universities.

In the midst of unanswered questions and pending audits, we’ll have to wait for the auditor’s report as he “follows the money.”

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