After Helen Dragas’ term on the Board of Visitors ended June 30, 2016, Dragas wrote an editorial detailing the more than $2 billion Strategic Investment Fund, which she termed a “slush fund.” Here’s what we know about the fund:
Who the players are
Helen Dragas, who opposes the fund, served as the board’s rector from 2011 to 2013. William H. Goodwin Jr. is the current rector of the board, and has defended the fund. Eric M. Sandridge is a state auditor who led the investigation into the Strategic Investment Fund. The inquiry into the University’s fund was led by Sens. J. Chapman Petersen (D-Fairfax City) and William R. DeSteph Jr. (R-Virginia Beach).
The fund contains more than $2 billion
During the June BOV meeting, the fund was revealed to be worth around $2.3 billion. The board authorized the fund at its February meeting, according to Dragas. In an article explaining the Strategic Investment Fund, the University said the money came from “many sources, accumulated over a long period of time.” Much of the money appears to come from University of Virginia Investment Management Company’s investments.
The fund was investigated after state senators raised concerns
In her editorial, Dragas claimed the fund’s earning potential could be used to cut in-state tuition by 70 percent. This raised concerns for several state senators, as the University has increased in-state tuition by more than $2,000 in the past two years. Senators “accuse[d] U.Va. officials of quietly setting aside massive cash reserves for investment as they raised tuition, ostensibly to cover rising costs,” according to the Daily Progress.
The University stated the money will be used to improve academic quality by investing in laboratories and equipment, information technology, hiring new faculty and creating “endowed student scholarships to benefit Virginians.”
State auditors determined the Strategic Investment Fund was not a “slush fund”
After an investigation into the origins of the fund, investigators determined its creation was legal. Eric M. Sandridge, auditor of public accounts and who led the audit, said the University did not audit state law, and none of the money in the fund appears to come from public money or tuition revenue, according to the Daily Progress.
“Talk of spending $2 billion is misleading,” Sandridge said, as reported by the Daily Progress. The University will only be able to spend what the payout of the fund is worth, which is about $100 million at most. In order for the University to keep its AAA bond rating, it is required to keep some of the money on hand.
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