$2.2 million pricetag on audit investigating U of L misspending is worth it, school says

Two Louisville-based foundations that had pledged nearly a year ago to pay for a forensic audit of the University of Louisville Foundation announced that they've each committed $1 million to cover most of the cost.

It's been worth it to restore confidence and trust for donors, J. David Grissom, chairman of the U of L board of trustees, said in a statement released Tuesday by the university.

Nearly a year ago after a flood of reports about lavish spending and self-dealing at the U of L Foundation, the leaders at James Graham Brown Foundation and C.E. and S. foundations announced they'd halt new grants to the U of L Foundation until an independent auditor could review the books.

U of L said that both foundations had fulfilled their pledges to help offset the cost of the audit, which has reached $2.2 million. U of L enlisted Alvarez & Marsal, which reported in June that foundation officials had mismanaged funds and paid themselves excessive compensation.

Related coverage

►Facing U of L suit, fired foundation officer transferred assets to LLCs
►U of L may sue Ramsey, others to recover millions for foundation
►Kentucky attorney general investigating U of L Foundation after audit

New leadership fired two officials, Kathleen Smith, a former foundation employee and chief of staff to ex-president James Ramsey, and chief financial officer Jason Tomlinson, and have enacted several reforms to tighten spending and oversight.

“The James Graham Brown and C.E. and S. foundations have helped us take a giant step toward that goal with their substantial contributions. We appreciate their concern, their leadership, and their financial support," Grissom said.

“The University of Louisville is vital to our city and to the Commonwealth of Kentucky,” said David Jones Sr., president of the C.E. and S. Foundation. “This forensic investigation is needed to restore the community’s faith in and support of the university and its foundation."

He added that the donation from C.E. and S. is intended "to ensure that the university can conclude its thorough investigation without creating a burden for Kentucky’s taxpayers.”

The board of trustees and new members of the foundation board have spent the last two months reviewing the audit. The trustees are set to meet Thursday to discuss the next moves, including potential litigation to recover some of the estimated $50 million or more lost when Ramsey was in charge.  

Reporter Grace Schneider can be reached at 502-582-4082 or gschneider@courier-journal.com.