LOUISVILLE, Ky. (WHAS11) -- The University of Louisville Foundation’s Interim Executive Director spoke the Rotary Club Thursday. Keith Sherman took the help at the university’s investment arm in December of 2016. At that time, a state audit had just recommended changes and a forensic audit was just beginning.
“Every dollar in, every dollar out, we know exactly where it came from and where it's going,” Keith Sherman told the audience at Thursday’s lunch.
Sherman’s talk was not only to describe past actions but to spread a message of optimism that the organization had turned the corner.
The forensic audit of the books at the foundation would lead to more questions about employees double dipping, real estate deals and whether endowment money was used for its promised purpose.
“In essence, we've got the right controls in place,” Mr. Sherman insisted. “We've got the right processes and procedures in place and we don't think there's any way that what's happened in the past could happen again.”
Interim Director Sherman outlined those steps taken including moving to a line-item budget, ending deferred compensation deals and preventing the university president from also serving as the Foundation head.
He reported that, as of today, the endowment is worth almost $726M and could have been worth more than $1B if past practices had been avoided.
“We spent at an unsustainable rate, that's not an opinion, that’s a fact,” he said. “We all have budgets at our homes; if we spend each month more than we take in it's eventually going to catch up with you and you're either going to have to borrow on your credit cards or take out loans and that's, in essence, what has happened to us.”
Ex. Dir. Sherman continued, “When you look at the campus, it looks so great. The growth, the explosion down at U of L, we mortgaged that. We spent too aggressively to get there. My job is to figure out how to pay it off as quickly as possible so we can put it completely behind us and just continue to look to more growth.”
As for the FBI investigation into men’s college basketball, Keith Sherman said he has not been briefed on the situation adding that it’s a “university issue” not a “foundation issue”. He expressed faith in university leadership and hope that the situation “will resolve itself quickly.”