U of L To Release Audit After Months Of Controversy

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J. Tyler Franklin / KyCIR

University of Louisville’s Grawemeyer Hall

A long-awaited forensic audit may provide some clarity Thursday afternoon in the University of Louisville’s quest to untangle its nonprofit’s web of financial dealings.

The U of L Board of Trustees is set to meet at 1 p.m. in the office of law firm Stoll Keenon Ogden. Trustees will meet in secret to receive, read and discuss the $1.7 million forensic audit the board commissioned last fall.

U of L plans to release the audit to the public — and foundation leaders — after university trustees discuss the matter in a closed hearing.

U of L leaders have been tight-lipped about findings so far, but laid out the scope of work in hiring auditing firm Alvarez & Marsal in November. The contract asked the firm to review six years of operations by the foundation and its subsidiaries and create a clear picture from the foundation’s opaque businesses.

The firm examined real estate practices, financial transactions, no-bid contracts and compensation in the midst of a firestorm about how the U of L foundation spent its money. (Read all of our U of L coverage)

U of L commissioned the audit after former president James Ramsey’s ouster, and several major donors raised questions about spending. The auditing firm quickly found a tangled web of issues and raised the price and expanded its scope of work.

J. Tyler Franklin / KyCIR

James Ramsey

The firm’s pending report was foreshadowed a bit in December when the state auditor found a “dysfunctional governing climate” at the school’s nonprofit.

The nonprofit foundation manages a nearly $800 million endowment and oversees fundraising for the public university.

In recent months, the foundation changed its bylaws to ban future school presidents from serving a dual role at the university and its nonprofit fundraising group. That arrangement had allowed Ramsey to make decisions that impacted both entities, but often left governing boards in the dark.

The foundation also froze its deferred compensation program, which paid out $20 million to benefit 10 people since 2003.

Kate Howard can be reached at khoward@kycir.org and (502) 814.6546.

Disclosures: 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 member Sandra Frazier and former member Stephen Campbell have donated.