LOUISVILLE, Ky. (WDRB) — The University of Louisville Foundation has agreed to pay its former chief financial officer $175,000 to settle a lawsuit over his firing last year in the wake of two independent reports that criticized the organization for overspending and poor financial management.
R. Jason Tomlinson, who became the foundation’s top financial official in 2013 under former U of L President James Ramsey, was fired in July as the organization’s new board of directors sought a clean break from Ramsey’s administration.
But the foundation gave no official reason for Tomlinson’s firing. In a lawsuit filed in November, he claimed he was made to be the underserving “fall guy.”
Tomlinson’s case was helped last fall when a state official awarded him unemployment benefits after finding that the foundation presented no evidence of misconduct leading to his firing.
Ramsey, who resigned under pressure in 2016, had given Tomlinson a contract with a base salary of $260,000 through 2021.
The foundation released the settlement agreement Tuesday under the Kentucky Open Records Act.
In a statement, the foundation acknowledged that Tomlinson had performed his duties “as requested” and thanked him for his years of service to the organization.
But the role of the foundation – a nonprofit that receives donations to the university and manages U of L’s nearly $800 million endowment – has “significantly been redefined” by the board of directors that took over in January 2017, according to the statement.
“As such, this was an appropriate time for an overall change in the foundation’s executive management,” the foundation said.
Don Cox, Tomlinson’s attorney, said he and his client are “pleased” with the settlement.
Under the current board, the foundation implemented dozens of changes to its structure and bylaws, including prohibiting the president of the university from serving as the president of the foundation, a dual role that Ramsey held for 14 years.
The changes were prompted by pair of reports that criticized the foundation’s management under Ramsey.
In December 2016, Kentucky Auditor Mike Harmon’s office issued a “management review” that noted a lack of basic financial records at the foundation and questioned whether Tomlinson had “sufficient information to properly manage the financial operations of an organization of this size.”
Then in June 2017, a forensic investigation commissioned by the university found that the foundation raided U of L’s endowment to fund at least $42 million in unbudgeted or excessive expenses from 2014 to 2016.
The forensic investigation faults unnamed foundation officers for not properly overseeing the organization’s assets and notes that no action was taken after Tomlinson received a warning about the excessive spending from a subordinate in 2013.
The forensic report also said the foundation overstated the real value of the endowment by up to $72 million through internal loans that aren’t likely to be repaid, and that the foundation management took far more in loans from the endowment than the board had authorized.
WDRB first reported the endowment loans – some of which funded extra compensation for university administrators through a foundation subsidiary called University Holdings – in 2016.
The foundation, under the new board of directors, wrote down the endowment by $38 million last year to account for loans that could not be repaid.