U of L Looks Toward Reforms After Scathing Audit Thursday, Jun 22 2017 

Weeks after a damning audit of the University Louisville Foundation was released, university leaders on Thursday continued with discussions of reform.

In all, the U of L Real Estate Foundation, University Foundation and Forensic Audit Committee — which is tasked to investigate the audit — met Thursday.

Real Estate Foundation

The Real Estate Foundation Thursday approved its 2018 fiscal year operating budget. In the coming year, the real estate foundation is expected to spend $6.47 million in operations and properties. Approval came after questions about donor funds, which compared to 2016, plunged by $31 million.

Jason Ruhl is director of the university foundation’s accounting operations. Ruhl blames the dip on a one-time $20 million gift from a single donor which, he said, may not be repeated.

U of L Board of Trustees Chair David Grissom asked to compare donation amounts between this year and last saying donors’ funding could be hemorrhaging.

University Foundation Interim Executive Director Keith Sherman said donors will resume funding once the foundation starts reforming itself.

To compensate decreasing funds, the real estate foundation reviewed properties that could potentially be sold. Some, like the home and carriage house for university presidents, could cost the real estate foundation over $300,000 this fiscal year.

Sherman said endowment funds were used to purchase some of the properties and selling them could bring cash back to the endowment pool.

The real estate foundation owes U of L $9.8 million. Money made from the sale of any properties could go toward paying that debt. But U of L Interim President Greg Postel said the Southern Association of Colleges and Schools could demand that money be paid to the university sooner. SACS is scheduled to visit U of L in September.

“They (SACS) will clearly have an opportunity to separately weigh in on whether they feel the proposed payback is adequate,” Postel said. “They might say that paying it back over 10 years is fine, they might issue a demand note that it be paid back in September.”

Smith Gets Fired; Tomlinson Remains On Leave

Though University of Louisville Foundation Chief Financial Officer Jason Tomlinson has been reportedly on vacation, the foundation board announced Thursday it plans to find an interim CFO to temporarily take his spot.

News that Tomlinson was placed on “mutually agreed-upon leave” surfaced shortly after the audit heaved allegations of wrongdoing at former University President Ramsey and his administration. Tomlinson and Ramsey’s aide, Kathleen Smith, were part of that administration.

Smith was fired from the foundation Thursday. In a scathing response, Smith’s attorney said the firing was a “breach of Kathleen’s contract” with the foundation and hinted at a possible lawsuit. Now, questions have surfaced about Tomlinson. Asked if temporarily replacing Tomlinson suggests he’s on more than a vacation, Sherman declined commenting “out of respect for Jason.” He’s unsure how long Tomlinson will be on leave, and said Tomlinson’s office may receive more staff for accounting and audit work.

“As soon as we know what our needs are going to be and what his ability will be to help, we’ll make decisions on how we end up using his (Tomlinson’s) resources,” Sherman said.

Forensic Audit Committee Holds First Meeting

The forensic audit committee met for the first time, clarifying its goal to analyze the audit and suggest governance changes to the foundation. The committee lost member Ron Abrams, who cited a conflict of interest, but its chair Earl Reed anticipates the committee will not exist long.

Instead, he expects issues and suggestions regarding the audit will be neutralized quickly.

“Hopefully we’ll get all of these issues addressed, the changes recommended, implemented and made. And then, we’ll move on,” Reed said.

That committee meets again July 18.

Kathleen Smith Was Fired By The U of L Foundation Today. Read Her Defense Thursday, Jun 22 2017 

Kathleen Smith, who long served as chief of staff to embattled former University of Louisville president James Ramsey, was fired from a position she also held on the university’s nonprofit foundation on Thursday.

Smith, a U of L employee for 46 years, retired from the university last fall but was on administrative leave from the foundation.

Foundation interim director Keith Sherman confirmed the firing in an email and said he would have no further comment. The foundation’s board is meeting Thursday to discuss a damning audit that revealed excessive spending, lax oversight and other problems that left the school’s endowment diminished.

In a scathing response on Thursday, Smith’s attorney, Ann Oldfather, said the firing was a “breach of Kathleen’s contract” with the foundation. Oldfather claimed Smith’s pay — which she received from both the university and the foundation — was being questioned in part because she is a woman.

The audit and ongoing investigations into the university and foundation have explored bonuses, tax gross-ups and deferred compensation plans offered to Ramsey and his top deputies, including Smith.

Oldfather also challenged the audit by the firm Alvarez & Marsal, suggesting their investigation is unreliable and calling Smith a “fall girl.” And she hinted that Smith may sue over the firing. Oldfather was not available for further comment on Thursday.

Read the full response here:

Can U of L Win An NCAA Appeal? Tuesday, Jun 20 2017 

Last week, the University of Louisville announced it would appeal sanctions handed down by the NCAA following its investigation of a prostitution scandal involving the men’s basketball program.

In addition to the school’s self-imposed punishments, the NCAA suspended head coach Rick Pitino for five games, saying he failed to adequately monitor Andre McGee. He’s the basketball staffer who the NCAA says paid strippers and escorts to entertain players and recruits over a four-year period.


Sports writer Eric Crawford

The NCAA also ruled that the program must vacate the records of games in which ineligible players were used. If the punishment stands, that would mean the Cards would have to take down their 2013 national championship banner.

I spoke with sports writer Eric Crawford, who’s been covering the story for WDRB about the appeals process and the chances of having some of the punishments lifted. Listen to our conversation in the player above.

Read the NCAA’s decision here:

NCAA U of L Public Infractions Decision

Board OKs Tuition Increases At Most Kentucky Universities Friday, Jun 16 2017 

LOUISVILLE, Ky. (AP) — The average cost of a four-year degree in Kentucky will be more than $39,000 this fall after state regulators approved tuition increases at most of the state’s public universities.

All but two schools asked for the maximum increase allowed by the Council on Postsecondary Education. The University of Louisville did not raise tuition, and Kentucky State University’s board of trustees has not had a meeting yet to ask for an increase.

It is the second time regulators have approved tuition increases since Republican Gov. Matt Bevin cut the budgets for most public colleges and universities. Bevin said the cuts, about $40 million, were necessary to help the state cope with a multibillion-dollar public pension debt. And this year, state economists predict the state will finish the fiscal year with a $113 million shortfall.

Some university presidents warned the budget cuts, compounded with other state reductions since 2008, would require university boards to continue raising tuition. The Bevin administration sharply criticized the increases last year, calling them unnecessary.

This year, the only institution not to request an increase was U of L, whose board of trustees was abolished and replaced by Bevin last year. A state judge ruled Bevin’s order was illegal, but the Republican-controlled legislature passed a law this year to keep Bevin’s board in place.

Western Kentucky University President Gary Ransdell said the budget cuts have been “devastating.” He said the school has lost $18 million in state funding on top of the $18 million trustees have voluntarily removed from the budget as the economy improves and enrollment declines because fewer adults are paying for part-time classes.

Still, Ransdell said the school’s operating budget has continued to grow because “we generate revenue from other sources.” The school’s 3 percent tuition increase approved Friday pushes the price of a full year of classes to just over $10,000, trailing only the University of Kentucky and U of L. Ransdell said the 3 percent increase is just enough to cover the university’s cost increases.

“The only way tuition increases will not occur is if state appropriations are significant enough to offset the revenue that they generate,” he said.

Tuition also will be increasing at the two-year schools in the Kentucky Community and Technical College System. The council approved increases of $6 per credit hour, making the cost of a 30-hour course load $4,860.

Regulators also gave final approval to new rules that will make public colleges and universities compete against each other for state funding. The regulations are the final step of implementing a new state funding model lawmakers passed earlier this year.

From now on, 35 percent of state funding for public colleges and universities will be based on the types of degrees awarded. Of that, 5 percent will be determined by the number of science, technology, engineering, math and health degrees; 3 percent based on degrees for low-income students and 3 percent based on degrees for minorities.

The model is based on Bevin and others’ push for more focus on training people for the types of advanced manufacturing jobs state officials are wooing.

The new rules will also reward institutions for enrolling and graduating more students. Ransdell, who led a committee that proposed the rules, said some schools will have an easier time doing that than others.

“It’s going to be a challenge for some institutions whose geographic location maybe isn’t as conducive to growth,” he said. “They are going to be forced to look out of state a bit more to again identify new markets, as we all will be. So this is going to drive behavior on our campuses, and I think that’s a good thing.”

U of L Will Extend Audit After Damning Findings Thursday, Jun 15 2017 

After a round of damning allegations about its nonprofit foundation contained in an audit released last week, the University of Louisville agreed to extend the audit to attempt to answer additional questions.

The university’s board of trustees approved the extension on Thursday, agreeing to pay up to $200,000 to Alvarez & Marsal, the firm that completed last week’s audit. The university paid the firm $1.7 million for the first investigation.

Board Chair David Grissom would not say what more the trustees hope to find but said the board is committed to restoring U of L’s reputation after revelations of lavish spending and opaque business practices. 

The foundation manages the university’s nearly $800 million endowment.

“There’s a need to refine further and glean even more information that already has been pulled together by A&M,” Grissom said. “It’s just a question of refining the audit further.”

The audit accused former president James Ramsey, who was also president of the foundation, and his administration of overspending, hiding information from the public and more. In response, the U of L Foundation created a committee to review the audit and bring governance suggestions to the board. Its chief financial officer was also placed on paid leave. 

Trustees Tight-lipped On NCAA Response

Just before the meeting, the NCAA slammed U of L with punishments that interim president Greg Postel called “excessive.”

It never should have happened, and that is why the school acted to severely to penalize itself in 2016,” he said in a statement. “Today, however, the NCAA Division I Committee on Infractions went beyond what we consider to be fair and reasonable.”

Postel said U of L would appeal “all aspects of the penalties.”

Trustee and Papa John’s CEO and founder John Schnatter declined questions on the NCAA’s ruling. Grissom declined at first but elaborated when pressed for a response.

“We’re going to prosecute the appeal and do the best we can to restore the reputation of the university from the athletic standpoint,” Grissom said.

Trustees Approve Budget

Trustees also approved the university’s budget, upholding a promise to keep tuition rates flat.

But the budget includes increases to housing and parking rates, and overall spending is $43 million less than last year to cover a shortfall. In the past, trustees have recommended keeping tuition flat for multiple years but did not revive the topic in Thursday’s budget discussion.

UofL trustees authorize $200,000 more for audit firm to further ‘refine’ information in foundation report Thursday, Jun 15 2017 

The University of Louisville board of trustees voted on Thursday to authorize the payment of an additional $200,000 to the firm that conducted the forensic audit on the UofL Foundation. Board chairman J. David Grissom said this is needed to further refine the information in the audit and glean even more information, at the request of […]

UofL board of trustees approve 2017-2018 budget that freezes student tuition for first time in 16 years Thursday, Jun 15 2017 

The University of Louisville board of trustees on Thursday unanimously approved their $1.2 billion operating budget for the upcoming 2017-2018 academic year, which will freeze student tuition for the first time in 16 years. University officials were able to craft a balanced budget despite what they had projected in February to be a $48 million […]

Video: Pitino calls NCAA sanctions ‘over-the-top, excessive’ Thursday, Jun 15 2017 

“This is over the top. It’s to the point where it’s not even conceivable,” University of Louisville basketball coach Rick Pitino said during a Thursday press conference in response to the NCAA’s heavy penalties on the men’s basketball program. “Personally, I’ve lost a lot of faith in the NCAA.” Watch the video below to hear more from the […]

NCAA drops bomb on UofL basketball: Penalties include vacation of 2013 championship title, plus probation and suspension Thursday, Jun 15 2017 

The NCAA infractions committee has dropped heavy penalties on the University of Louisville basketball program, which must vacate an unspecified number of wins from 2010 to 2014, including its national championship victory in 2013. UofL interim President Greg Postel swiftly responded on Thursday with a statement indicating the university intends to appeal, calling the sanctions “excessive.” “The […]

U of L Will Appeal NCAA Penalties Against Hoops Program Thursday, Jun 15 2017 

The NCAA Committee on Infractions has released its report on the sex scandal involving the University of Louisville men’s basketball program.

Among the penalties is a five game suspension for head coach Rick Pitino, and four years of probation to begin now through June 14, 2021.

During his suspension, Pitino cannot be present in the arena where games are played and cannot have contact with players or coaching staff.

At a news conference on Thursday, Pitino said he will appeal the finding and the punishment, calling the ruling “over the top.”

Pitino’s attorney, Scott Tompsett, issued a statement calling the NCAA’s finding “one of the weakest” he’s ever seen against a head coach.

Tompsett said the decision was based on a “vaguely-worded rationale” about creating an environment that allowed the violations to occur.

“But the decision does not identify a single specific thing that Coach Pitino should have done, that he wasn’t already doing, that would have either prevented or detected the illicit activities,” Tompsett said in the statement. “The secret and deliberately hidden illicit activities certainly did not occur because Coach Pitino did not properly train Mr. McGee.”

The NCAA is also vacating “basketball records in which student-athletes competed while ineligible from December 2010 and July 2014.”

U of L Compliance Consultant Chuck Smrt on Thursday said the vacation of records could affect 108 regular season and 15 post season games, including the Cards’ 2013 National Championship win.

The NCAA has handed down similar punishments to other schools.

Mississippi Valley State University’s records were vacated in March of this year. The NCAA ruled the school improperly certified the eligibility of 28 student-athletes in seven different sports.

MVSU’s Senior Associate Athletic Director Renia Edwards said the championship and tournament wins in which any ineligible students competed would be vacated.

“Since those students did compete when they were ineligible to compete, if that team got a win, that win pretty much had to be vacated,” Edwards said. “It had to be taken off the books. It didn’t add a loss to that team’s record, but the record or the history of a win is taken away.”

Edwards said the university must supply the list of ineligible students to the NCAA. Whatever contests they competed in would then be vacated.

In a statement, Interim U of L President Greg Postel called the penalties handed down by the NCAA “excessive” and said the school plans to appeal “all aspects of the penalties.”

“The entire U of L community is saddened by what took place,” Postel said. “It never should have happened, and that is why the school acted to severely penalize itself in 2016. Today, however, the NCAA Division I Committee on Infractions went beyond what we consider to be fair and reasonable.”

The program self-imposed several sanctions last year, including a postseason ban, and a reduction in scholarships and recruiting visits by assistant coaches after finding that some rules violations occurred.

“We believe the penalties imposed today are unfair to the U of L community and our current and former student-athletes, many of whom have already paid a heavy price for actions that did not involve them,” Postel said in the statement. “This ruling is also unfair to Coach Pitino, who we believe could not have known about the illicit activities.”

Read the decision here:

NCAA U of L Public Infractions Decision

An investigation was launched in late 2015 following the publication of the book “Breaking Cardinal Rules,” in which author Katina Powell claimed she was paid by former basketball staff member Andre McGee to provide strippers and prostitutes to Cardinal players and recruits.

In a report released in October, the NCAA found that U of L committed four violations and said Pitino failed to adequately monitor McGee’s activities.

U of L is disputing that ruling. School officials met with the NCAA in April of this year.

This story has been updated.

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