JLARC Questions VCU Board Structure in Report on Failed Development Project

Richmond, Va. (Newsradiowrva.com) - The Virginia Joint Legislative Audit and Review Commission (JLARC) has released its report on VCU’s botched “Clay Street Project.”

The report questioned the influence of VCU leadership over its health system, which approved funding for a $325 million facility. It later backed out at a cost of $73 million .

The report cited several factors that led to the project’s demise, including COVID-19, inflation, and failure to hire an outside expert to ensure proper site conditions. The report also cited the pitfalls of the board structure, with five members serving on both the University and hospital’s boards simultaneously.

“Some overlap is beneficial, because of the entities’ shared missions,” said JLARC Chief Legislative Analyst Lauren Axselle. “But making decisions in the best interest of the health system can be difficult when VCU’s interests are too heavily represented.”

VCU president Michael Rao, one of the five occupying a role on both boards, responded to the report’s findings.

“We all regret that the result wasn’t what anyone wanted, but I will say that the buck stops with me as chair of the Health System Board of Directors,” Rao said. “It was also the right decision because it avoided far greater future financial liabilities, including what had been advised could be a likely downgrade of the health system’s bond ratings.”