Repository: UIHistories Project: Board of Trustees Minutes - 1950 [PAGE 1009]

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BOARD OF TRUSTEES

[February 16

EMPLOYMENT O F UNIVERSITY AUDITORS (25) The Finance Committee recommends that the firm of George Rossetter and Company, Certified Public Accountants, Chicago, be retained as auditors for t h e year ending June 30, 1950, their services to be charged on the basis of a per diem rate and expenses, with the understanding that the aggregate charges will not exceed the following: University of Illinois (all divisions) ? i o 500 University of Illinois Foundation (including Retirement System).. 600 University of Illinois Athletic Association (including Retirement System) 750 These maximum costs are based on the assumption that if the auditors go beyond the scope of usual examination, further compensation for such additional work will be allowed after review and approval by the Finance Committee.

On motion of Mr. McLaughlin, this recommendation was concurred in.

REPORT FROM T H E LEGAL COUNSEL A N D T H E COMPTROLLER ON COURT DECREE O N WORKING FUNDS A N D SECURITIES UNIVERSITY O F ILLINOIS VS. IRVIN L. PORTER, TREASURER (26) Prior to June 12, 1948, working funds were maintained in banks in Champaign and Galesburg for the more rapid and efficient transaction of University business. In 1948 Mr. Irvin L. Porter, Treasurer, raised a question as to his personal liability in case of a loss of such funds and on the date indicated above the working fund maintained in Urbana-Champaign was transferred to the First National Bank of Chicago of which he was an officer. Securities belonging to the University have been held since 1932 by the First National Bank of Chicago, under an Agency agreement, and not by the University Treasurer personally. On July 21, 1948 (Minutes, page 12), the Board amended the by-laws and statutes of the University so as to relieve the Treasurer of responsibility for such funds or securities when not in his possession. In the same action it approved the increase of the Bursar's fund for the Urbana-Champaign Business Office to $100,000 from a previous total of $60,000 and authorized the deposit of this fund in the First National Bank in Champaign. T h e $40,000 increase, together with a previous increase in this fund of $41,575 made in June, 1946, was taken from general funds accumulated as a result of the collection of indirect costs in the operation of United States government research contracts. A legal opinion has been secured from the Legal Counsel of the University that such funds may be retained by the University and need not be deposited in the University Income Fund held by the Treasurer of the State of Illinois. On July 21, 1948, the Board also authorized the Legal Counsel to prosecute any suit required to establish the validity of the Board action of such date relative to these funds and securities. At a previous conference between Mr. Porter's attorneys, the Legal Counsel, and the Comptroller, it was indicated that Mr. Porter would be agreeable to the transfer of the funds from his custody if required by court decree. It was the opinion of the attorneys that such court decree would further protect Mr. Porter from personal liability in respect to these funds. Accordingly, on July 31, 1948, a formal request was made to Mr. Porter to transfer the funds as approved by the Board of Trustees on July 21. Mr. Porter then refused to transfer such funds and action was instituted by the Legal Counsel in the Superior Court of Cook County to secure a declaratory judgment requiring such transfer. After the suit was entered it was mutually agreed to offer the Attorney General of the State of Illinois an opportunity to become a party, in view of the possibility that interests of the State other than those of the University might be involved. After investigation it was the decision of the Attorney General that such other interests were not involved and, therefore, he did not become a party to the suit. On January 25, 1950, after a hearing on the petition, Judge Joseph A. Graber entered a decree finding that the action of the Board on July 21, 1948, relating to