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LOUISVILLE, Ky. (AP) — Kentucky Auditor Adam Edelen said Thursday his office will review the University of Louisville Foundation following complaints about huge deferred compensation packages the foundation awarded to the school's president and other top campus officials.
The review will cover fundamental issues involving the foundation, including its governance and oversight, Edelen said. His office also will look into foundation actions and the governance structure of the UofL's Board of Trustees, he said.
"I have heard from dozens of business and community leaders who believe that a review by my office will be a constructive exercise, resulting in easing tensions and a fact-based path for moving forward," Edelen said in a statement.
Dr. Robert C. Hughes, who is chairman of the trustees and the foundation, said in a statement that school officials look forward to working with the auditor's office on the review.
"Since recent questions arose in the media, we began action to clarify misinformation about the UofL Foundation and its importance in supporting the University of Louisville," the statement said.
The independently operating foundation manages $1.1 billion in assets, including property and UofL's $842 million endowment, university spokesman Mark Hebert said.
The auditor's review follows news reports that the foundation awarded million-dollar-plus deferred compensation packages to James Ramsey, the school's president, and his top aides.
The Courier-Journal reported in February that the foundation paid deferred compensation in 2012-13 of $2.4 million to Ramsey, $1.8 million to Provost Shirley Willihnganz and $1.3 million to Chief of Staff Kathleen Smith. That is in addition to their salaries.
Louisville TV station WDRB reported some of the deferred compensation had been backdated and credited with fictional investment returns, that Willihnganz and Smith also had been paid by a separate nonprofit created by the foundation, and that Ramsey had received $2.5 million from the foundation in 2008.
Ramsey's base salary totals $636,480 from UofL and related entities, the school said. Total base salaries for Willihnganz and Smith are $393,536 and $229,588, respectively.
Willihnganz is stepping down as UofL's second-ranking official at month's end, with plans to return to teaching in 2016 after a sabbatical.
UofL Trustees Steve Wilson and Craig Greenberg have said the foundation needs to answer to trustees to ensure transparency and better coordination of compensation, the Louisville newspaper reported.
Edelen noted that under state law, university trustees are required to oversee the compensation of the school's president, faculty and staff.
"The foundation is critically important to the university, but it must be fully transparent," Edelen said.
Edelen noted that Ramsey's tenure as UofL president has been one of significant growth at the school.
UofL's endowment in 2002, when Ramsey became president, was $221 million, according to school officials. Last year, UofL surpassed its $1 billion fundraising goal for a capital campaign aimed at boosting student scholarships, faculty support and research.
Meanwhile, the University of Kentucky manages its $1.2 billion endowment, school officials said.
UK has deferred compensation plans for its president, Eli Capilouto, and for Dr. Michael Karpf, executive vice president for health affairs, school spokesman Jay Blanton said. Capilouto, who became UK president in 2011, is to receive $950,000 in deferred compensation if he stays through 2018. Karpf has received $1.34 million in deferred compensation, Blanton said.
Edelen, a Democrat seeking a second term as auditor in the November election, said he expects the UofL Foundation review to take months.
Associated Press Writer Rebecca Yonker in Louisville contributed to this report.
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