U of L Looks Toward Reforms After Scathing Audit
Weeks after a damning audit of the University Louisville Foundation was released, university leaders on Thursday continued with discussions of reform.
In all, the U of L Real Estate Foundation, University Foundation and Forensic Audit Committee — which is tasked to investigate the audit — met Thursday.
Real Estate Foundation
The Real Estate Foundation Thursday approved its 2018 fiscal year operating budget. In the coming year, the real estate foundation is expected to spend $6.47 million in operations and properties. Approval came after questions about donor funds, which compared to 2016, plunged by $31 million.
Jason Ruhl is director of the university foundation's accounting operations. Ruhl blames the dip on a one-time $20 million gift from a single donor which, he said, may not be repeated.
U of L Board of Trustees Chair David Grissom asked to compare donation amounts between this year and last saying donors’ funding could be hemorrhaging.
University Foundation Interim Executive Director Keith Sherman said donors will resume funding once the foundation starts reforming itself.
To compensate decreasing funds, the real estate foundation reviewed properties that could potentially be sold. Some, like the home and carriage house for university presidents, could cost the real estate foundation over $300,000 this fiscal year.
Sherman said endowment funds were used to purchase some of the properties and selling them could bring cash back to the endowment pool.
The real estate foundation owes U of L $9.8 million. Money made from the sale of any properties could go toward paying that debt. But U of L Interim President Greg Postel said the Southern Association of Colleges and Schools could demand that money be paid to the university sooner. SACS is scheduled to visit U of L in September.
“They (SACS) will clearly have an opportunity to separately weigh in on whether they feel the proposed payback is adequate,” Postel said. “They might say that paying it back over 10 years is fine, they might issue a demand note that it be paid back in September.”
Smith Gets Fired; Tomlinson Remains On Leave
Though University of Louisville Foundation Chief Financial Officer Jason Tomlinson has been reportedly on vacation, the foundation board announced Thursday it plans to find an interim CFO to temporarily take his spot.
News that Tomlinson was placed on “mutually agreed-upon leave” surfaced shortly after the audit heaved allegations of wrongdoing at former University President Ramsey and his administration. Tomlinson and Ramsey’s aide, Kathleen Smith, were part of that administration.
Smith was fired from the foundation Thursday. In a scathing response, Smith's attorney said the firing was a “breach of Kathleen’s contract” with the foundation and hinted at a possible lawsuit. Now, questions have surfaced about Tomlinson. Asked if temporarily replacing Tomlinson suggests he’s on more than a vacation, Sherman declined commenting “out of respect for Jason.” He’s unsure how long Tomlinson will be on leave, and said Tomlinson’s office may receive more staff for accounting and audit work.
“As soon as we know what our needs are going to be and what his ability will be to help, we’ll make decisions on how we end up using his (Tomlinson’s) resources,” Sherman said.
Forensic Audit Committee Holds First Meeting
The forensic audit committee met for the first time, clarifying its goal to analyze the audit and suggest governance changes to the foundation. The committee lost member Ron Abrams, who cited a conflict of interest, but its chair Earl Reed anticipates the committee will not exist long.
Instead, he expects issues and suggestions regarding the audit will be neutralized quickly.
“Hopefully we’ll get all of these issues addressed, the changes recommended, implemented and made. And then, we’ll move on,” Reed said.
That committee meets again July 18.