By Kyeland Jackson —

Former President James Ramsey is now part of an Internal Revenue Service audit.

University spokesperson John Karman confirmed the audit, saying U of L received the request July 7. The audit will review the financial contracts of Ramsey, former provost Shirley Willihnganz and the head coaches of the men’s basketball, women’s basketball and football teams.

Insider Louisville first reported the story, citing a conversation between an IRS officer and U of L’s tax manager.

Karman said the audit is routine, and the university had a more expansive IRS audit in 1991.

The 1991 audit took three years to complete, ending in a settlement of $1.1 million. Of that, $600,00 was from “unrelated business income tax.”

Issue Settlement Amount
Student FICA issues $ 228,000
Faculty paid as independent contractors vs. employees 116,000
Other employee misclassification issues 52,000
Miscellaneous employment tax issues 4,000
Extend settlements to include tax years 1992 & 1993 110,000
Unrelated Business Income Tax 600,000
TOTAL SETTLEMENT $1,100,000

Administrative pay drew scrutiny after an investigation revealed the U of L Foundation paid Ramsey millions in compensation payouts. In 2014 alone, the foundation paid Ramsey $3 million.

Willihnganz was paid upwards of $1.8 million by the foundation.

Kentucky’s public accounts auditor began their own audit last year after news of Ramsey’s compensation packages hit. Dealings between the endowment manager and U of L have been close, with trustees often representing both parties. Three of Governor Matt Bevin’s redacted board members had business ties to the foundation, raising conflict of interest concerns between the parties.

Accountancy professor William Stout said these audits may be to determine if inaccurate business deals happened.

“For-profit organizations and individuals pay taxes, so audits of those organizations may be aimed at seeing if they paid the correct amount of tax (looking for unreported revenue, inappropriate deductions, etc.),” Stout said in an email.

The state audit investigating U of L and the foundation is ongoing.