University News

Audit Finds No Issues, Concerns with Finances at Center for Antiracist Research

Korn Ferry is hired to review management processes and recommended best practices

Six weeks after a shakeup at Boston University’s Center for Antiracist Research (CAR), BU officials say a number of steps are either completed, or well underway, that will help the center successfully pivot toward its new direction. One key step that’s finished, an internal audit, found no issues with how CAR’s finances were handled, showing that its expenditures were appropriately charged to their respective grant and gift accounts.

When the center’s restructuring is done, CAR will operate with a staff about half its original size. It will move away from staff and faculty executing CAR projects and programs and into a structure in which fellows will be in residence at BU for nine months conducting their own individual projects, while participating in public events and contributing to The Emancipator, a digital publication focused on “explaining and identifying solutions to structural racism.”

The new focus for CAR comes after its founding director Ibram X. Kendi announced in September the center was laying off 19 people so that it could forge a new path forward that would ensure its viability for decades to come. But the layoffs also brought a renewed focus on management of the center, as well as questions about its grant management practices. A chief question was why a center that had raised more than $50 million had not completed more research with its funding. (To be clear, $30 million of CAR’s funds is endowed and only $1.2 million of that can be spent annually, and of the remaining $20 million, much of it is restricted and can only be spent in specific ways.)

Since the layoffs, BU has been looking closely at all aspects of the center’s operation, including hiring an outside firm to begin meeting with CAR staff members to learn about its workplace culture and climate under Kendi, who is BU’s Andrew W. Mellon Professor in the Humanities and a College of Arts & Sciences professor of history. Some of the aspects BU is exploring are starting to yield results, like the audit, while others will take more time.

“Our auditors concluded that CAR’s financial management of its grants and gifts was appropriate,” says Gary Nicksa, BU’s chief financial officer and treasurer. Nicksa adds that the audit of CAR’s expenditures covered June 2020, when it was founded, through September 2023.

“As I have said from the beginning, the restructuring did not come from financial distress brought on by financial mismanagement, and the team of auditors validated this truth,” Kendi says. “We sought to put in place a new financially sustainable structure that will support CAR’s mission for the long term. We are glad to have this financial inquiry behind us and a financially sustainable model ahead of us.”

He describes the layoffs as “the hardest decision of my career,” but says: “In the end, we had no other choice to ensure CAR’s sustainability and this critical work. And we worked hard to ensure affected staff had extended notice and opportunities to transition into other places of employment.”

With the financial audit complete, BU is now turning its efforts to the grants the center received to make sure CAR followed required reporting processes outlined in each one. This aspect of BU’s review is being overseen by Gloria Waters, vice president and associate provost for research. Waters says 19 grants came from outside foundations.

“We are making sure [CAR] provided what it was supposed to provide to its funding agencies—such as, were progress reports filed when they were supposed to be filed; were deliverables reported as required,” Waters says of her review. “And we want to have the best practices and policies in place to assure all our funders that we are meeting their expectations.”

The aspect of the review BU is conducting into CAR that may take the longest is the exploration relating to its operating climate and culture, and the University has hired the global organizational consulting firm Korn Ferry to support this effort.

Maureen O’Rourke, BU associate provost for faculty affairs, says Korn Ferry will look backward at how the management structure was set up and at the center’s organizational culture and provide assistance, so that “it can then recommend a path forward.”

She says it will be important for Korn Ferry’s team to hear from faculty and staff who have passed through the center. “Their input will help the team identify any consistent themes and possible areas of improvement,” O’Rourke says.

BU hired Kendi in 2020 to open the center as he emerged as one of the country’s leading voices on antiracism after the murder of George Floyd by police in Minneapolis and a number of ensuing killings of Black men and women by police. The surge of interest and activism around antiracism led to two strong years of fundraising by CAR, which says its mission is “to build a world where racial equity and social justice prevail.” 

The center’s funding in those two years was heavily dependent on donor gifts rather than long-term institutional grants, according to Kendi. But when public interest and support in antiracism waned during CAR’s third year, it experienced a steep decline in contributions. And while the center’s overall endowment remains strong, its funds are largely endowed and restricted and could not sustain its projects and programs well into the future.

At that point, Kendi says, restructuring CAR became a necessity. “I had to take the long view to ensure that the center could have a societal impact and be financially sustainable for many years down the road, and evolving to a fellowship model from our current larger and more costly structure allows us to do that,” he says.

University officials, including Kenneth Freeman, president ad interim, who initiated the inquiry into CAR, say BU remains committed to the center’s broad mission as it works to carve out its new identity and path forward. That path, centered around The Emancipator and a fellowship program for antiracist intellectuals and creators, is a different business model than how it was originally launched.

Provost Ken Lutchen adds that while the inquiry into CAR continues, BU officials will work with Kendi “as he fleshes out his vision for the fellowship model.” Lutchen says BU stands behind “Dr. Kendi’s vision of antiracist scholarship and teaching, and that his decision to evolve the center into a fellowship model falls squarely in line with that vision.”