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Saturday, July 01, 2017

Foundation Forensic Audit

Have you been following the media coverage of the University of Louisville Foundation's Forensic Audit?  I've ended up reading some of the report, but haven't had an opportunity to go through all of it. However, I wanted to post this to serve as a place I can find media links easily. I meant to post about the audit a few weeks ago, but I've been sick, we traveled to Michigan, and time simply got away from me.

There are a lot of outrageous findings in there, some of which I have previously discussed on the blog -- such as the salary of top administrators and compensation for athletics personnel. Even the Board of Trustees chair says the audit "paints a disturbing picture."

Some Foundation personnel authorized multimillion dollar loans to "assets" that were really subsidiaries of the Foundation that had no significant cash value. They used those funds to repay other loans and to pay secret salaries. This trick drained perhaps tens of millions of dollars from the Foundation, but the costs were hidden by the decision to list the "program" as an investment asset.

Decision makers initiated terrible real estate transactions (including the dubious purchase of a Golf Course) and invested in start-up projects that ended up losing big bucks. The University bought nearly $10 million in athletic tickets during the audit period, including $800,000 annually for football and men's basketball season tickets. Top personnel often made these decisions without fully informing the Board other than in a cursory way. Often, they exceeded discretion that had been granted to them. For example, they exceeded spending for particular projects.

Here is a rundown of some egregious personnel spending:

$   1.7 million additional (secret) compensation for joint Univ./Foundation employees
$ 21.8 million deferred compensation plan for top University officials (some also Fdtn)
$   4.9 million for salaries of Athletics Association personnel

That adds to over $28 million!

Athletics is disputing some parts of the audit.

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1 comment:

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