Recent controversy involving
the investments and other activities of a university-affiliated
development foundation may serve as a prompt for health system
board leaders to assure the appropriate legal, compliance and
internal audit support of any system-affiliated development
foundation.
The university foundation was the subject of an investigative media
report that was critical of the actions of the
foundation in acquiring a majority position in a former factory
facility from its owner, a prominent university donor. While the
expectation appeared to be that the acquisition would generate
substantial financial benefits to the foundation, the transaction
was ultimately undone after the foundation had been
unsuccessful in its efforts to sell the factory. The focus of the
report was on both the diligence and related process applied by the
foundation in deciding to enter into the transaction, and on
allegations that the actual goal of the transaction was to
facilitate
