The University of Louisville Foundation should undergo a forensic audit by a nationally known accounting firm. And the foundation’s board should have nothing to do with choosing the firm or dictating the scope of the audit.
And, still, the foundation’s chairman, Dr. Bob Hughes, balks.
Instead of moving aggressively to restore confidence in U of L’s fund-raising arm, the foundation’s leaders are hiring PR firms to spin the bad news.
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U of L board chair Larry Benz has grown so frustrated that he’s said the only recourse may be to start a new foundation to support the university that is vital to the well-being of Kentucky’s largest city and the whole state.
The secrecy, the stonewalling, the refusal to open the books of a non-profit that the Kentucky Supreme Court has said is a public institution serve only to compound the suspicion, mistrust and intrigue.
We do know that the foundation has supplemented the compensation of former U of L president James Ramsey and his lieutenants with millions of dollars, making him one of the country’s highest-paid university administrators. “The foundation at some point forgot its mission and instead got caught up in the allure of real estate to the detriment of the endowment and the university,” explains Benz. Ramsey resigned as U of L president in July but still is president of the foundation, an arrangement that was always unusual and unwise. The Courier-Journal’s Andrew Wolfson reports that the endowment controlled by the foundation has declined 19 percent when adjusted for inflation since 2006. The foundation recently took a $38 million loan from the university to pay off a debt and is building new offices for Ramsey and an aide.
No wonder the James Graham Brown Foundation, which has given $72 million to U of L, threatened to cut off funding unless the foundation came clean. Then a family foundation headed by Humana co-founder David A. Jones Sr. chimed in and, like the Brown Foundation, offered to pay for the audit. As many as 70 donors have indicated they will no longer support U of L unless the foundation opens itself to auditors, said Benz. The review underway by state Auditor Mike Harmon does not preclude or conflict with the calls for a forensic audit.
The charities, the trustees and acting President Neville Pinto are right on for insisting on transparency from the foundation. This, by the way, is the board that Gov. Matt Bevin tried to abolish, saying it had become dysfunctional, although last week the board seemed to be functioning rather well and in the public’s interest.