RICHMOND, Va. (NEWSPLEX) -- The University of Virginia fielded questions Friday from Virginia lawmakers in a special hearing with the Senate Finance Education and House Appropriations Higher Education Subcommittee.
Lawmakers are trying to figure out exactly how UVA created a $2.2 billion Strategic Investment Fund.
"Was the university allowed to do what they did? I think so," said state auditor Eric Sandridge during the hearing.
Sandridge, along with members from the UVA Board of Visitors and administration answered questions from lawmakers about the multi-billion dollar fund.
"When Mr. Goodwin became rector, he started talking with me about how do we take the operating cash and put this to more effective use," said Chief Operations Officer Pat Hagan when asked how the idea of the fund came about.
During the hearing, Sandridge explained that after the initial idea, the University of Virginia Investment Management Company took UVA assets like private grants and health insurance reserves, along with credit lines, to create the fund.
According to Sandridge, UVA has structured the fund in such a way that it can only use the money from investing the operating cash. The operating cash would stay put or flow out to its commitments.
"I did not see anything that would indicate that there was a slush fund of any kind," Sandridge said.
Speaking through Virginia State University student Breyanna Baggett, Helen Dragas said it is not the legality of the fund with which she has a problem.
"We must keep site of the fact that this discussion is really about young Virginians and their access to opportunity at a price that they and their families can afford," said Baggett on Dragas' behalf.
Dragas has argued that the money in the fund should have been used to keep tuition costs low, citing a 70-percent increase in tuition since 2009.
But lawmakers sided with UVA, saying the fund is not a sustainable way to keep tuition low.
"I feel that this is irresponsible to make the assertion that you could use the $2.3 billion and wave a magic wand and reduce tuition by 'X,'" said Delegate Chris Jones, Republican from the 76th District.
Lawmakers did suggest that UVA could have been more open about the fund.
Members of the board of visitors say they plan to start using the proceeds from the investment fund this year.
"I personally would like to see part of the fund utilized for tuition mitigation or to keep tuition for parents and students as low as possible," said Delegate Steve Landes, Republican from the 25th District.
The board will consider ways to spend some of the Strategic Investment Fund at a September meeting.