New University and Foundation leadership a breath of fresh air.
I went to Frankfort today for an early look at the long-awaited result of Kentucky’s Auditor of Public Accounts of the relationship between the University of Louisville and its investment arm, the University of Louisville Foundation. Alas, even before the press conference began, most of the major news outlets in Louisville had already published in-depth reports of the Auditor’s findings. [Their reporters had access to an embargoed early release of the full report. My request for that opportunity went unanswered.] My observations of those who spoke or asked questions at the session interpreted the report as highly critical of how the University and Foundation interacted under the administration of Former President James Ramsey– except for Dr. Ramsey’s attorney who termed the report a disservice to the community. I will not duplicate the reports of Chris Otts of WDRB, Tom Loftus of the Courier Journal, Kate Howard of the Kentucky Center for Investigative Reporting, Joe Sonka of Insider Louisville, Kyeland Jackson of the Louisville Cardinal, or whatever other entity picks up this important story; but I encourage my readers to read some of these reports yourselves. You can read a summary handed out at the session here, and a rebuttal offered by Dr. Ramsey’s attorney, Steve Pence. The full report is available on the Auditor’s website. It contains responses by current leadership of the University and Foundation, a response by Former President Ramsey, and a rebuttal to that response by the Auditor’s office. A video of the conference is also available. I have just begun to analyze the full report myself. At least read its Executive Summary, duplicated here, which contains specific recommendations. The summaries look rather damming to me, as was in my opinion the whole presentation by Auditor Mike Harmon.
Not just the press found UofL opaque and uncooperative.
Prominent in the presentation by Auditor Harmon were references to the lack of cooperation or worse on the part of the University and Foundation with numerous delays, incomplete and unclear responses, and missing documents to the point that it was difficult for the auditors to have confidence in the University partners. Evidence of likely active resistance was seen in a memo mistakenly attached to one document. To the considerable credit of the new leadership of University President Neville Pinto and Foundation Chair Brucie Moore, the Auditor’s frustrations fell away immediately following the departure of Dr. Ramsey and his chief supporters. [This proves my point that leadership style starts at the top!] No journalist in the room would disagree about the difficulty in extracting information from the University and Foundation in the past. We are promised better in the future, but the future is by definition unrevealed. For now, I am expecting the best, but still having to file open-record requests.
The rewards of dysfunction.
President Pinto and Chairwoman Moore both attended the press conference. Their cooperation was applauded by Auditor Harmon, and both offered brief comments that both accepted criticisms and promised a brighter future looking forward to restoring public trust and confidence. I personally believe them.
Q&A and more.
There was a good bit of time for question and answers. We were told that governance and not financial details were the targets of the audit– although some financial dealings appeared to be inappropriate including unauthorized supplements to salaries and the infamous “loans” by the University to other entities. No specific referrals were made to law enforcement, but that was said not to be a goal. Nevertheless, comments in the full report highlight items that the Auditor thought might raise “legal questions” such as when “it appears the use of Foundation funds was designed to circumvent advice from University legal counsel” to pay salary supplements to University staff. In my opinion this comment is in itself a showstopper providing insight into the management style of the previous administration. A marked lack of checks and balances in the administrative structure was a common theme. It was Dr. Ramsey’s show. It was said that there was no coordination with Governor Bevin before or during the audit. The University must pay a minimum of $186 thousand to pay for the audit. No opinion was rendered about claw-back of unauthorized salaries. I will look through the whole report to identify relevant items not included in the summaries.
A Dysfunctional Board?
Auditor Harmon denies coordination with Governor Bevin before or during his analysis of the governance structures of the University, and I have no reason to doubt that, but he unavoidably reinforces the Governor’s agenda by adopting the Governor’s characterization of the University Board of Trustees as “dysfunctional.” Naming a thing owns a thing. This is the language the Governor used as his excuse for dismissing the entire UofL Board of Trustees and attempting to replace it with a hand-picked board of his own. That failed effort resulted in the University being placed on probation. When trustees new to the board began to ask questions, demand answers, or speak their minds at what had previously been carefully scripted Board meetings, a concerted effort was made by longtime Ramsey supporters to characterize them as “dissidents,” as trouble makers, and worse in their personal social media. I attended many of the Board meetings in the past few years and in my opinion, the intent of the name-callers was to protect the person of former President Ramsey. “Why can’t we just get along,” urged one Ramsey supporter. Which has been better for the University, a get-along/go-along rubber stamp that sat, perhaps willfully uninformed, through a string of major embarrassments, illegalities, and probations; or the one that is now regaining the trust of a larger community?
Enough for now.
Peter Hasselbacher, MD
Emeritus Professor of Medicine, UofL
December 14, 2016