University of Louisville leaders nailed down plans Friday for a financial audit of its Foundation.
The decision ended weeks of arguments between the members of the Foundation and university boards over who gets to pick, and direct the work of, an independent auditing firm. They ultimately agreed both boards should have a role.
A joint committee, led by new Foundation board member Diane Medley, will oversee the audit after U of L solicits and hires a firm.
The moves come in response to a turbulent year of scrutiny of the Foundation’s finances, governance and leadership, culminating last week with former university president James Ramsey’s resignation from the Foundation.
“I think the future going forward is bright,” Foundation chair Brucie Moore said Friday. “I think that this is a transitionary period.”
The Foundation board also created a committee Friday that will look at the Foundation’s governance structure. A state audit is underway on the same topic, and Moore said she expects the results this fall.
Until last week, the Foundation’s leader was Ramsey, who held a dual role while university president until he left via a $690,000 buyout in July. But the board on Friday created an executive director position, and will conduct a national search to find a permanent executive director.
Moore said the board plans to hire an interim executive director in the meantime.
The Foundation’s chief financial officer, Jason Tomlinson, also gave a presentation Friday on the endowment’s performance under Ramsey. Tomlinson defended the Foundation’s money management in light of a recent story by the Courier-Journal that said the $681 million endowment has dropped dramatically in value since 2006.
Tomlinson said the diversity of the Foundation’s assets have insulated it from worse losses.
“Our endowment goals are for a long period of time… the track record of the endowment speaks for itself,” Tomlinson said.
Tomlinson also discussed a $38 million loan the university made to a Foundation subsidiary called University Holdings Inc., first reported by WDRB. According to Tomlinson, it was an investment, not a loan, and the University of Louisville Board of Trustees should have known about the line of credit because it was included in an audit report.
Larry Benz, chair of the trustees and a Foundation board member, said that neither board approved the transaction and it violated the Foundation’s short-term money policy.
Overall, Benz said, the financial information presented reinforced the need for an audit.
Kate Howard can be reached at khoward@kycir.org and (502) 814.6546.
Disclosure: In 2015, the University of Louisville, which for years has donated to Louisville Public Media, earmarked $3,000 to KyCIR as part of a larger LPM donation. University board members Stephen Campbell and Sandra Frazier have donated to KyCIR.
