Lawmaker Calls For ‘Full-Blown’ Hearing On UW System Foundations

Legislature’s Joint Audit Committee Wants More Oversight Nonprofit Fundraising Groups

Wisconsin State Capitol
Phil Roeder (CC-BY)

In the aftermath of a financial scandal that led the the University of Wisconsin-Oshkosh Foundation to declare bankruptcy last year, state lawmakers on Wisconsin’s Joint Audit Committee are looking to ratchet up examination of 90 similar “affiliated organizations” associated with University of Wisconsin System schools.

The foundations are nonprofits that raise money for their associated campuses. The relationship caused trouble at UW-Oshkosh after leaders allegedly guaranteed loans for development projects. Former UW-Oshkosh Chancellor Richard Wells and Vice Chancellor Thomas Sonnleitner are facing civil and criminal charges in the case involving more than $11 million.

Now state Sen. Robert Cowles, R-Green Bay, who co-chairs the Legislative Audit Committee wants to schedule a “full-blown hearing” on the dealings between the various foundations and their associated campuses. He said summer scheduling is a problem but he hopes to hold it within a month.

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The idea, Cowles said, is to develop across-the-board regulations for all public university foundations that include separation between the fundraising arms and taxpayer funded schools.

Earlier this year, the state Legislative Audit Bureau issued a slate of recommendations to rein in other foundations at university and college campuses across the state. Cowles explained, “the recommendations generally are requiring more separation between the university and the foundations.”

Cowles said audits are often done after a problem, such as the case in Oshkosh, but he said the university system seems receptive to a more proactive approach.

“As we have the hearing and we look at the reaction of the university … I do believe that the university system is very intended on fixing any problems that exist,” Cowles said.

Foundations often get free office space on campuses and there are concerns that school staff work with the organizations without the schools being reimbursed for their services.

Cowles added that the audit committee is reviewing all the dealings between the 90 organizations and their campuses. The LAB report this spring had several recommendations including increased monitoring of the foundations.

He said one goal of holding hearings is to see if university and college leaders are on board with the recommendations.

“At this point we’re not entirely sure if they agree,” he said.