University of Louisville Foundation fires former aide to ex-President Jim Ramsey

06/22/2017 05:36 PM

The University of Louisville Foundation has ended the employment of a former aide to ex-President Jim Ramsey, prompting her attorney to call her client a “fall girl” in the aftermath of a scathing forensic audit.

Kathleen Smith, Ramsey’s former chief of staff and assistant secretary at the U of L Foundation, had been on paid administrative leave since September, but the nonprofit charged with handling the university’s endowment notified her late Wednesday that her employment would end Thursday, according to Smith’s attorney, Ann Oldfather.

Foundation officials said little about the decision after Thursday’s board of directors meeting, during which they met for about an hour in executive session to discuss personnel and litigation without taking action afterward.

“We will confirm she’s no longer employed by the foundation, but no further comment,” said interim Executive Director Keith Sherman.

Oldfather criticized findings by Alvarez & Marsal in its forensic audit and said the foundation’s decision to terminate Smith’s employment violated her contract, set to expire in July.

“This is a breach of Kathleen’s contract with the Foundation, but worse it is a cowardly failure to stand behind fully transparent salary and compensation decisions that would never be questioned were she one of the highly-compensated men on the these boards,” Oldfather said in a statement.

Oldfather said the $21.8 million deferred compensation program and Smith’s participation in it had been approved by the foundation board, but auditors wrote in the report released June 8 that board members could only recall discussion of Ramsey’s deferred compensation awards during interviews.

The audit says that deferred compensation payments were removed from draft foundation budgets at the request of Ramsey’s office, leaving finance staff scrambling for funds to pay unbudgeted withdrawals and taxes.

Auditors wrote that Smith earned $2.6 million through the program. Her attorney, however, contended that the amount totaled less than half of that at $1.1 million.

Foundation officials also said Thursday that they might hire an interim chief financial officer during CFO Jason Tomlinson’s leave. They declined to provide additional details on Tomlinson’s time away from the foundation, originally described as paid administrative leave but disputed by his attorney as vacation.

Sherman declined to comment on Tomlinson’s status “out of respect for Jason.”

“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 what we end up using as resources, but I can tell you that the workload is significant, and so we’re looking for help to help us get through it,” Sherman said.

The foundation is currently “in a holding pattern” as it wraps its arms around the audit’s findings, Diane Medley, chairwoman of the U of L Foundation board and a university trustee, said when asked about possible legal action based on the investigative report.

“We’re reviewing, as I said last time, all avenues because it’s our duty to protect the assets of this foundation,” Medley said. “Right now our counsel is reviewing that and has not had sufficient time to give us a report.”

“I don’t think it’ll take too long because we know time is of the essence,” she added.


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