UofL Board of Trustees votes to reinforce, add new protections to foundation partnership

LOUISVILLE, Ky. -- The University of Louisville Board of Trustees voted today to resolve its differences with the University of Louisville Foundation, formalize changes that have been implemented to foundation policies and procedures, and add significant new protections against behavior that led to the foundation’s past management issues.

The vote came after a forensic investigation into the foundation’s activities by Alvarez & Marsal, a professional services firm, and after several months of further study and discussion by the board.

The Alvarez & Marsal investigation included findings of questionable policies regarding financial administration, wasteful spending and excessive administrative compensation.

“The audit provided critical insights that guided the board in making important changes in the governance and decision-making process for Foundation activities,” said David Grissom, chairman, UofL Board of Trustees. “Our primary responsibility as fiduciary agents and stewards of the university is to fully understand and address governance issues to ensure appropriate oversight and management going forward.  The audit enabled us to align our processes to allow for fiscal prudence and appropriate safeguards for investments to come.”  

 Addressing key areas, the Board of Trustees is confident that the resolution is the most productive and fiscally sound approach to future Foundation management. Those areas include:

• Governance - as a result of the Alvarez & Marsal study, the university and the foundation have made changes to ensure that the excessive and improper spending that characterized prior foundation leadership will not occur again. The additional changes will increase transparency and oversight of foundation budgeting, investments, expenditures and compensation.
• Leadership - all of the parties cited for mismanagement have been removed from their positions; and
• Litigation - since any action against the Foundation would be costly, lengthy, and disruptive, the board instead will focus on implementing future safeguards to ensure donor confidence moving forward. UofL has made tremendous strides in recent months, regaining momentum and focus on institutional priorities. Student applications have reached record-setting numbers; research expenditures are at an all-time high; cash donations are up; and the university accreditation body – the Southern Association of Colleges and Schools (SACS) – recently restored full accreditation status to the university allowing for continued focus on academic excellence and student recruitment.
  
  "The university and the Foundation have not closed the book on future litigation,” Grissom said. “However, the resolution signals the Board of Trustees’ confidence that all critical management issues have been addressed, allowing the university and the community to focus confidently on future success.”

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