U of L will pay audit firm $200K more to answer questions raised in its report
The University of Louisville will pay $200,000 more to the firm that produced a scathing audit of the university's foundation to answer additional questions raised in its report.
After meeting in executive session for two hours, the board Thursday approved the extra payments to Alvarez & Marsal, which already has been paid $1.7 million for the six-month review released June 8.
J. David Grissom, the board's chairman, declined to say what questions the board wants answered, saying only that "we need to glean more information and refine the audit."
On a difficult day for the university – the NCAA announced sanctions against the men's basketball program Thursday morning – Grissom was asked by reporters how it would respond to the audit findings, which he again called "disturbing," and the sanctions.
"This board is totally committed to getting to the bottom of all of our problems with honesty and integrity" and "restoring the reputation of this university," he said. "This board is moving the truck forward."
He said the board will decide at its July 22 meeting whether to sue to recover money lost by the foundation.
The trustees were meeting for the first time since the release of the audit, which found that the foundation's officers and directors depleted at least $42 million from the university's endowment and tried to hide lucrative deferred compensation for former President James Ramsey and his top aides.
The report also said the board made bad investments in real estate and startup companies, and spent all $17.6 million in an “evergreen fund” – even though spending was supposed to be limited to $5 million – on things that included executive compensation and bowl game trips.
Grissom announced during the meeting that the board would no longer approve spending and other projects before trustees had a chance to understand what they are voting on.
He rejected a request by interim President Greg Postel for the board's approval of new agreements between U of L Hospital and the University Medical Center, which will take over management of the hospital when KentuckyOne Health exists July 1.
Instead, the board will consider the measure by video conferencing after trustees have a chance to read the documents.
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"I don't think we should be doing what the previous board was doing," Grissom said. "It got them in to a lot of trouble."
Earlier in the meeting, the board approved a budget for 2017-18 that makes up for a $48 million shortfall without raising tuition.
Faculty Trustee Enid Trucios-Haynes noted that the budget reduction would hurt academics, but Grissom said the board had no choice.
He also said there likely will be similar cuts next year.
Reporter Andrew Wolfson can be reached at 502-582-7189 or firstname.lastname@example.org