The Louisville Cardinal

U of L board chair: audit “report paints a disturbing picture”

By Shelby Brown and Kyeland Jackson–

An audit released June 8 found damning evidence against U of L’s foundation, revealing ULF overspent, hid transactions from its directors and tried hiding information from the media.

The audit, anticipated for months, gathered thousands of emails and more than a hundred interviews. It totals more than 138 pages, which U of L Board of Trustees Chair David Grissom said “paints a disturbing picture” of the prior administration.

“Let me be perfectly clear,” Grissom said in a statement. “The activities highlighted in this forensic investigation happened under previous university leadership and under a previous foundation board.”

Former U of L President James Ramsey, ousted by the board of trustees last July,  was also president of the foundation until resigning in Sept. 2016. Before his resignation, Ramsey was under fire for reports of his deferred compensation. Between 2011 and 2016, those packages totaled $8.7 million.

Alvarez and Marsal, the auditing firm, said Ramsey refused in-person interviews and only answered their questions with written responses. The audit also said U of L’s IT department erased and “re-purposed” Ramsey’s hard drive before the audit was completed.

The full audit report is here.

Among numerous findings, the audit reported:

Interim President Greg Postel shared Grissom’s evaluation.

“This report should answer many questions about the past and close the door on a sad chapter in university history,” Postel said.

Grissom said the board is reviewing policies and procedures and could discuss legal action against previous administrators in weeks.

“The board has not yet determined what legal action, if any, should be taken as a result of the forensic investigation conclusions. However, I would anticipate that the board, after consulting with counsel, will, within the next couple of weeks, make that determination,” Grissom said.

Prior to releasing the audit, the board’s agenda included a Kentucky statute regarding exceptions to open meetings. Among other reasons, the statute says meetings are closed if “proposed or pending litigation is discussed.” Meetings are also closed if “discussions or hearings might lead to appointment, discipline or dismissal of an individual employee, member or student.”

“The steps we are currently taking will position us well for the future,” Postel said.

Foundation chairwoman Diane Medley said she would need time to “digest” the report before commenting further.

“I would point to the myriad changes we have undertaken at the foundation over the last few months as evidence that things have already changed for the better,” Medley said. “Particularly in terms of governance, financial management and overall transparency.”

The foundation has new leadership and a new board. It halted the deferred compensation plan, barred the UofL president from running the foundation and implemented transparency measures–like the immediate release of the entire audit online.

Three foundation meetings were scheduled June 9 but later canceled, citing a medical emergency in Medley’s family.

This story will be updated.