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"text": "KENTUCKY STATE UNIVERSITY\nRegular Meeting of the Board of Regents\n1:15 p.m., July 25, 2014\nBoard Room, Julian M. Carroll Academic Services Building\nFrankfort, Kentucky\nKaren W. Bearden, Chair",
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"text": "Chairperson Karen Bearden called the meeting of the Kentucky State University Board of Regents to order at 1:15 p.m. on July 25, 2014.",
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"text": "Chairperson Bearden welcomed the attendees to the meeting. Chair Bearden requested that President Burse provide his remarks after the Committee remarks.",
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"text": "Stephen Mason, Sr., administered the Oath of Office to Ms. Breana Smith, Student Regent.",
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"text": "Action: Motion to approve the minutes from the Board of Regents meetings held on January 24, 2014, April 25, 2014, May 9, 2014 and",
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"text": "June 4, 2014 was made by Regent Henry and seconded by Regent Whitehead. The motion passed, 10-0.",
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"text": "Regent Bearden presented the Academic Affairs Committee report. Regent Bearden provided an overview of the extensive work and research in which the faculty has been engaged since the last reporting period. Dr. Downing also discussed strategies upon which the University will undertake to ensure that students are receiving the best education possible at KSU. Written reports were provided to the Committee.",
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"text": "Regent Henry stated that the Committee reviewed unaudited financial statements of the University and budget vs. actual report for May 31, 2014. Regent Henry also highlighted the following:",
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"text": "External Auditor, Dean Dorton and Ford will be on campus to conduct final audit preparation beginning on August 18 2014;",
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"text": "To help maintain spending, Management has loaded only 50% of the department operating budget for FY 15; and",
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"text": "Regent Lysonge presented the Student Success and Enrollment Management Committee report. He provided an update on Student Life Activities, Health Services utilization, Career Placement, Enrollment Management, and Admissions. A written report was also provided to the Board.",
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"text": "SSEM staff continue to make progress on the division's strategic goals to ensure the best outcomes for our students. Enhancement of retention is the focus of these goals.",
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"text": "KSU had stable enrollment for the last three summer sessions. The University has also experienced an increase in the quantity and quality of applications for Fall and Spring 2014. This increase equates to a 17% increase as compared to the previous year.",
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"text": "Regent Whitehead presented the External Relations and Development report. A written report was also provided to the board.",
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"text": "Regent Whitehead updated the board by reporting that there were 655 newspaper articles and 178 television news stories featuring KSU. The majority of these were positive. Over 109 press releases were issued and 105 electronic messages were posted on KSU's electronic sign board.",
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"text": "A 2014-15 media plan is under development and will be shared with the board upon completion.",
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"text": "There are five major projects in various stages of completion, including, Cheaney Legacy Plaza, Pedestrian Bridge across US 60, Utility relocation for Pedestrian Bridge, Alumni Stadium, and Interpretative Center at Downtown Annex.",
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"text": "In 2013-14, KSU received $928,476 from 753 contributors to the Capital campaign.",
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"text": "performed during 2013-14. Only one urgent finding was made. It related to the need for monthly reconciliations for the bank account that includes grant revenue. The University has accepted this finding and has begun implementation. There were 15 recommendations. The second report outlined the 2014-15 audit plan. Once findings are made, a report card will be developed by the audit firm to advise the board how findings will be implemented.",
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"text": "Action: Motion was made to convene a closed session to discuss personnel matters, pending litigation and property acquisition pursuant to the Kentucky Open Meetings Act. The motion was made by Regent Henry and seconded by Regent Haskins. The motion passed. 10-0.",
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"text": "KENTUCKY STATE UNIVERSITY\nSpecial Meeting of the Board of Regents\n1:00 p.m., September 12, 2014\nBoard Room, Julian M. Carroll Academic Services Building\nFrankfort, Kentucky\nKaren W. Bearden, Presiding",
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"text": "there are courses that students need for graduation that are not offered, KSU will look at other alternatives, such as Credit for Prior Learning.",
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"text": "to invite them to participate in Operation Preparation at Kentucky State University in March 2015. To date, over 3000 middle and high students from Owen, Shelby and Franklin counties are scheduled to attend this event next semester. More school districts are expected to participate during this five day event.",
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"text": "Community Service/Service Learning Projects Scheduled for Fall 2014",
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"text": "Service learning activities for this reporting period include; Pay it Forward Frankfort, the Frankfort Public Arts collaboration with the Senior Citizen Center, the Roots and Heritage Festival, voter registration, Constitution Day, Two Days of Service, Habitat for Humanity, Green Jobs Fair, Host a High School Student for a Day, Halloween on the Hilltop, and hosting a service recognition banquet.",
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"text": "THE GRADUATE SCHOOL",
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"text": "Dr. James Obielodan was reappointed as the Director of Graduate Studies (DGS) effective from July 1, 2014. His appointment is split 50/50 as Director of Graduate Studies and as faculty in the School of Business. Ms. Wilma Jones was hired as a half-time administrative assistant.",
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"text": "Graduate Recruitment and Graduate Admissions were transferred to Student Success and Enrollment Management (SSEM) on July 1, 2014. Prior to the transfer, the DGS participated in 14 graduate recruitment/career fairs during spring 2014 semester. The DGS followed up with each prospective graduate student by email within 24 hours of returning from an event. The spring and summer graduate recruitment and admissions efforts by the DGS combined with SSEM graduate admissions processing efforts since July 1, 2014 led to an increase in enrollment of graduate students during the fall 2014 semester over the enrollment in the fall of 2013. Three graduate academic appeals were processed and satisfactorily resolve during this reporting period.",
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"text": "A meeting of the Graduate Council was held on September 10, 2014. A Graduate student get-together event was held on September 12, 2014.",
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"text": "The graduate school is updating a list of contacts at historically black colleges and universities (HBCUs). Within the month, the school will be sending graduate promotional materials (flyers, brochures, etc.) to the contacts on the list along with a request that they post and distribute the materials amongst their students. Attending the Graduate Council meeting were graduate students from Computer Science, Agriculture, Special Education, Public Administration, and Environmental Studies.",
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"text": "The Graduate Studies Program is compiling a list of graduate student recruitment fairs taking place this semester for participation by faculty, students and the Graduate Recruiter.",
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"text": "BLAZER LIBRARY",
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"text": "During the week of August 13-14, the library successfully migrated to ExLibris Voyager 9.0.0. Voyager is the main system for circulation, acquisitions and cataloging modules, and the library catalog.\nThe Library is continuing the conversation statewide to replace the ExLibris Voyager system with the next generation system as KSU is a part of the Kentucky Voyager Consortium libraries. It is not yet clear which NextGen system will be chosen. This issue is under review between the Blazer Library,",
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"text": "Information Technology, the State Assisted Academic Library Council of Kentucky Library Directors and the Kentucky Virtual Library.",
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"text": "The Library is currently developing student learning outcomes and assessment that support all academic units. The Library has added all of the general education textbooks to the ExLibris Voyager system through Course Reserves. Students have the ability to check out the textbooks for a two-hour loan period. The Library participated in the Welcome Week Extravaganza for students on August 26. Brochures and goodies were passed out to the students and they were encouraged to visit the library.\n\nA proposal for a sub-grant through the HBCU Library Alliance sponsored by the Andrew W. Mellon Foundation to support the expanding of faculty research through funding technical support in grant writing has been prepared and submitted by the Library.",
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"text": "The Library continues to participate in meetings, conferences and webinars, and to serve in the consortiums and organizations in which it holds membership including: the State Assisted Academic Library Council of Kentucky, the Federal Depository Library Program, the Federation of KY Academic Libraries, the Collections Committee and Voyager Consortium, the Kentucky Library Association, the 1890 Library Deans and Directors, the African-American Male Librarians Association, the Government Documents Round Table, and the State Records Advisory Committee.",
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"text": "This year’s summer component proved to be both successful and beneficial to the Upward Bound staff and participants. The program served a total of 37 students with most students residing on campus in Hunter and Combs Halls. Students were impacted academically, socially, and culturally as a result of the program. They engaged in classes in their core subject areas, received American College Test (ACT) test preparation, and mentoring from KSU students and staff. College tours to Thomas More, the University of Louisville, and the University of Cincinnati were also provided. The participants visited Chicago, Illinois for their end of the year cultural and educational enrichment trip. Students toured Northwestern University, the Du Sable Museum, the John Hancock Observatory, and the Museum of Science and Industry. They also visited the Shedd Aquarium and Millennium Park.",
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"text": "The month of August marked the beginning of the academic component for the Upward Bound program. The program hosted its first parent and student orientation. At the orientation, the staff discussed the importance of everyone working together to achieve the program objectives, bullying and its consequences, and the importance of parent and student involvement.",
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"text": "GO College provided school and learning community college enrichment activities to participants at Fern Creek High School in Louisville. The GO College program served 80 students this summer with some visiting the campus of Kentucky State University for the first time.",
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"text": "Students received instruction in the core classes, toured the campus of KSU and visited Asbury College, the University of Kentucky's Pharmacy School, Eastern Kentucky University and Georgetown College. Students also met with the video production crew at KSU to discuss careers in video production/journalism. The participants and staff traveled to Atlanta, Georgia for their end of the year cultural and educational trip.",
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"text": "There, students were able to visit Spelman and Morehouse College, the Martin Luther King Jr. Center, and the Body Exhibit.",
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"text": "During the month of August, the two Academic Coaches, Brandon Gatson and Chelsea Hardy, began their academic component with the program by meeting with the school principals to assist in creating a “college going culture” within their respective school buildings. The coaches also met with the students to coach them in the areas of college readiness. The coaches conducted college readiness and preparedness workshops with students at Fern Creek High School in Louisville in September. Additionally, they will be taking the participants on several college and cultural events.",
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"text": "The Office of Research, Grants, and Sponsored Programs (OSP) implements strategies that ensure the University is a worthy steward of federal, state, and local investments in research and development efforts at KSU. These efforts also foster the University’s ability to increase the capacity of researchers at KSU to efficiently target resources that address scholarly work at the University, support STEM initiatives, improve research facilities, and prepare students for the global marketplace.",
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"text": "The mission of the Office of Research, Grants, and Sponsored Programs is to enhance the environment for research, public service, and outreach activities at KSU, to encourage and facilitate external funding, and to support the University’s pursuit of excellence in delivery of high-quality academic services and production of graduates who are global citizens. The Office of Research, Grants, and Sponsored Programs assists with pre-award functions to include identification of funding opportunities, proposal development and submission in adherence to guidelines dictated by the sponsoring agency. The Office of Research, Grants, and Sponsored Programs also supports KSU researchers in post-award grant administration by reviewing and executing award documents and contractual agreements, managing budget set-up, and performing activities that ensure adherence to OMB circulars, and ensuring the timely submission of required technical and financial reports when applicable.",
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"text": "external funding,",
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"text": "The Office of Research, Grants, and Sponsored Programs examined the organization, mission, and goals of the Office of Research, Grants, and Sponsored Programs and their relationship to key university stakeholders and published and distributed in August 2014 a Kentucky State University Grants Management Guide that contains details of grants management procedures and guidelines.",
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"text": "For the first quarter of this FY2015, OSP has submitted 7 proposals totaling $4,875,935.00, has 21 new awards of $12,611,466.50, and has active multi-year continuing awards of over $16,000,000.",
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"text": "Dr. Beverly Downing, Interim Provost/Vice President for Academic Affairs",
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"text": "The first Draft of the Southern Association of Colleges and Schools (SACS) Fifth-Year Report and Quality Enhancement Plan (QEP) final report are complete. The next steps in preparation of the report consist of a review by the Interim Provost/Vice President for Academic Affairs and the President. In December, the report will be reviewed by an external peer evaluator group for input and comment. The University will use the month of January 2015 to make any additional corrections and close any gaps that may be identified. The plan is to submit the report late February ahead of the March 15, 2015 deadline.",
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"text": "Beginning in Fall 2014, new and returning students were required (at a minimum) to pay 50% of their Fall 2014 tuition/fees and to sign up for a four (4) or twelve (12) month Payment Installment Option (PIO), depending on whether they did not or did have a prior balance, respectively. Payments are due on the 30th of each month. Students who did not make a payment on September 30th, or who had a payment returned by the bank, were contacted by email and phone by October 8th. As of October 6, 2014, the following had occurred in regards to returned/non-payments for students on payment plans:",
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"t": 515.8299999999999,
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"b": 477.67
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"bbox_refit": true
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"type": "table_cell",
"bbox": {
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"t": 488.71,
"r": 464.52784,
"b": 477.67
},
"text": "131,529,647",
"attrs": {
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"col": 1,
"rowspan": 1,
"colspan": 1,
"bbox_refit": true
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"reading_order": 22
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"type": "table_cell",
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"t": 488.71,
"r": 563.06784,
"b": 477.67
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"rowspan": 1,
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"t": 460.27,
"r": 156.81264,
"b": 435.79
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"col": 0,
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"colspan": 1,
"bbox_refit": true,
"merged_continuation": true
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"t": 469.7294,
"r": 402.8,
"b": 451.3271
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"text": "",
"attrs": {
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"col": 1,
"rowspan": 1,
"colspan": 1
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{
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"type": "table_cell",
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"t": 433.51,
"r": 260.4288,
"b": 355.25
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"col": 0,
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{
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"t": 433.51,
"r": 464.54848,
"b": 354.926
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"text": "2,435,822\n1,903,781\n1,064,784\n176,051\n97,876\n720,097",
"attrs": {
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"col": 1,
"rowspan": 1,
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"t": 433.51,
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"text": "3,702,030\n1,633,551\n1,301,888\n167,510\n409,519\n825,613",
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"b": 327.77
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"text": "Total current liabilities",
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"colspan": 1,
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"t": 199.70000000000005,
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"b": 175.22000000000003
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"b": 193.6941
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"colspan": 1,
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"bbox": {
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"r": 464.53744,
"b": 121.46000000000004
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"text": "72,934,209\n8,657,506\n5,193,071\n31,230,731",
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"text": "75,782,722\n11,409,979\n2,810,728\n32,943,439",
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"text": "REVENUES\nOperating revenue:",
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"text": "Student tuition and fees (gross)\nLess: Scholarship allowances\nStudent tuition and fees (net of scholarships)",
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"text": "8,699,818\n(2,420,742)\n6,279,076",
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"col": 1,
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"colspan": 1,
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"text": "11,537,256\n(2,204,536)\n9,332,720",
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"col": 1,
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"text": "1,738,825\n1,655,375\n709,802",
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"text": "1,304,478\n1,224,322\n4,990\n10,698\n718,730",
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"text": "1,736,636\n1,607,059\n37,500\n22,404\n733,717",
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"text": "13,623,943",
"attrs": {
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"col": 1,
"rowspan": 1,
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"bbox_refit": true
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{
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"type": "table_cell",
"bbox": {
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"b": 387.91
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"text": "17,574,039",
"attrs": {
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"col": 2,
"rowspan": 1,
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"reading_order": 17
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{
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"bbox": {
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"t": 371.57,
"r": 190.40208,
"b": 333.65
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"text": "EXPENSES\nOperating expenses:\nEducational and general",
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{
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"r": 403.2,
"b": 368.1394
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"text": "",
"attrs": {
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{
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"attrs": {
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"bbox": {
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"r": 254.5944,
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"text": "Instruction\nResearch\nPublic service\nAcademic support\nStudent services\nInstitutional support\nOperations and maintenance of plant\nStudent aid\nDepreciation\nAuxiliary enterprises",
"attrs": {
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"col": 0,
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{
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"bbox": {
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"r": 464.54848,
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"text": "KENTUCKY STATE UNIVERSITY\nRegular Meeting of the\nBoard of Regents\nStudent Success and Enrollment Management Committee\nJuly 25, 2014\n11:00 am to 11:30 am\nBoard Room – Academic Services Building\nFrankfort, Kentucky",
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"text": "support through Title IV funding. SSS sponsored a live webcast of the symposium from Washington DC from 9 – 12 noon in the Hill Center Ballroom. SSS started the fall workshop series with financial literacy 9/9/14 presented by Financial Aid and Fifth Third Bank. Leadership Skills Development Workshop designed to improve personal esteem, motivation, and professionalism have been conducted.",
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"text": "1. Capital Campaign Report showing actual dollars received, dollars pledged and in-kind donations to campaign",
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"text": "Cash Received\nPledge Balance\nIn-Kind Donations\nTotal",
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"text": "Revenue\\n(Ticket Sales, Donations and Sponsorships)",
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"text": "Expenses\nNet",
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"text": "$ 60,598.53\n$ (22,738.53)",
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"text": "3. Strategies with measurable activities and outcomes related to completing campaign",
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"text": "Capital Campaign Goal",
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"text": "Dollars Raised to Date",
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"col": 1,
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"b": 327.36
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"text": "OBJECTIVES",
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"order": 38,
"type": "table",
"bbox": {
"l": 166.08,
"t": 326.64,
"r": 569.28,
"b": 300
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"l": 181.970939,
"t": 323.836027,
"r": 241.458589,
"b": 301.014933
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"text": "FY 2015\n$ 1,000,000.00",
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"col": 0,
"rowspan": 1,
"colspan": 1,
"bbox_refit": true,
"merged_continuation": true
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"reading_order": 0
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{
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"r": 321.33318,
"b": 301.014933
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"text": "FY 2016\n$ 1,300,000.00",
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"col": 1,
"rowspan": 1,
"colspan": 1,
"bbox_refit": true,
"merged_continuation": true
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"reading_order": 1
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{
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"l": 341.157838,
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"r": 400.645488,
"b": 301.014933
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"text": "FY 2017\n$ 2,000,000.00",
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"col": 2,
"rowspan": 1,
"colspan": 1,
"bbox_refit": true,
"merged_continuation": true
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"reading_order": 2
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{
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"l": 419.86987,
"t": 323.836027,
"r": 479.357521,
"b": 301.014933
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"text": "FY 2018\n$ 3,000,000.00",
"attrs": {
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"col": 3,
"rowspan": 1,
"colspan": 1,
"bbox_refit": true,
"merged_continuation": true
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"type": "table_cell",
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"l": 503.171349,
"t": 323.836027,
"r": 562.658999,
"b": 301.014933
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"text": "TOTAL\n$ 7,300,000.00",
"attrs": {
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"col": 4,
"rowspan": 1,
"colspan": 1,
"bbox_refit": true,
"merged_continuation": true
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"text": "STRATEGY",
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"t": 275.04,
"r": 568.32,
"b": 134.4
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"l": 55.92,
"t": 275.04,
"r": 141.32,
"b": 262.2545
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"text": "",
"attrs": {
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"col": 0,
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"t": 272.469561,
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"attrs": {
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"col": 1,
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"colspan": 1,
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"text": "FY 2016",
"attrs": {
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"colspan": 1,
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"r": 380.261206,
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"text": "FY 2017",
"attrs": {
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"col": 3,
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"colspan": 1,
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"r": 459.550719,
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"text": "FY 2018",
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"col": 4,
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"bbox_refit": true,
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"l": 515.731537,
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"r": 538.162073,
"b": 263.91735200000005
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"text": "TOTAL",
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"rowspan": 1,
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"text": "We have audited the accompanying financial statements of the business-type activities of Kentucky State University (the University) as of and for the years ended June 30, 2014 and 2013, and the related notes to the financial statements which collectively comprise the University's basic financial statements as listed on the table of contents. We have also audited the financial statements of the Kentucky State University Foundation, Inc. (the Foundation), the University's discretely presented component unit, as of and for the years ended June 30, 2014 and 2013.",
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"text": "Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.",
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"text": "In our opinion, based on our audits the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and discretely presented component unit of the University as of June 30, 2014 and 2013, and the respective changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.",
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"text": "Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 3 through 19 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.",
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"text": "In accordance with Government Auditing Standards, we have also issued our report dated October 7, 2014 on our consideration of the University's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University's internal control over financial reporting and compliance.",
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"text": "Management’s Discussion and Analysis of Kentucky State University’s (the University) financial statements provide an overview of the financial position and activities of the University for the year ended June 30, 2014, with comparative information for the year ended June 30, 2013. This discussion has been prepared by management and should be read in conjunction with the financial statements and the notes thereto, which follow this section. The financial statements and related notes and this discussion and analysis are the responsibility of management.",
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"text": "The annual financial report and statements include the University and Kentucky State University Foundation, a component unit of the University. Kentucky State University Foundation, Inc. (the Foundation) is a not-for-profit Kentucky corporation which was established to receive, invest and expend funds to promote and implement educational and developmental activities at Kentucky State University (the University). The Foundation is managed by a Board of Trustees independent from that of the University. The Foundation is supported primarily through contributions from alumni.",
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"text": "The University's financial position at June 30, 2014, reflected total assets of $124.5 million and total liabilities of $14.5 million. Total net position was $110.0 million.",
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"text": "Total assets decreased $5.2 million or 3.0%, primarily due to decreases in student accounts receivable (net of bad debt allowance), grant and loans receivables, capital assets, and cash and cash equivalents. Total liabilities decreased by $1.1 million or 7.3% primarily due to decreases in bond and lease obligations and in compensated absences. Total net position decreased $4.0 million, due to bad debt write-off.",
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"text": "- Unrestricted net position decreased $2.2 million, which the University reserves for spending in programs and other capital-related contingencies.",
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"text": "- Operating revenues were $38.7 million and operating expenditures were $73.7 million, resulting in a loss from operations of $35.0 million. Net non-operating revenues were $30.9 million, including $23.5 million in state appropriations, which, when combined with the loss from operations and capital appropriations, resulted in an overall decrease in net position of $4.0 million.",
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"text": "The University's Financial Statements consist of three financial statements: a Statement of Net Position (Balance Sheet); a Statement of Revenues, Expenses and Changes in Net Position (Income Statement); and a Statement of Cash Flows, along with the accompanying Notes to the Financial Statements. These financial statements are prepared in accordance with Governmental Accounting Standards Board (GASB) Statement No. 35, Basic Financial Statements – and Management's Discussion and Analysis – for Public Colleges and Universities.",
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"text": "Assets: As of June 30, 2014, total assets amounted to 124.5 million. Of this amount, investment in capital assets (net of depreciation) of 80.7 million, or 64.8% of total assets, represented the largest asset class. Investments amounted to 15.3 million or 12.3% of total assets. During the year, total assets decreased by 5.2 million, primarily due to decreases in student accounts receivable (net of bad debt allowance), grant and loans receivables, capital assets, and cash and cash equivalents.",
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"text": "Liabilities: As of June 30, 2014, total liabilities amounted to 14.5 million. Long-term debt includes bonds payable for housing and dining system and energy-related equipment and technology equipment purchased under a Master Lease Agreement. During the year, total liabilities decreased by 1.1 million, primarily due to decreases in bond and lease obligations and in compensated absences.",
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"text": "Net Position: Net position of the University was $110.0 million at June 30, 2014 and was reported in four net position categories: invested in capital assets, net of related debt $73.3 million (66.6%), restricted nonexpendable $8.6 million (7.8%), restricted expendable $5.8 million (5.3%), and unrestricted $22.3 million (20.3%).",
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"text": "KENTUCKY STATE UNIVERSITY\nManagement's Discussion and Analysis, continued",
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"text": "The Statement of Revenues, Expenses and Changes in Net Position is prepared on the accrual basis of accounting, whereby revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the service, regardless of when cash is exchanged. All items that increase or decrease net position must appear on the Statement of Revenues, Expenses and Changes in Net Position as revenues, expenses, gains or losses.",
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"text": "Financial activities are reported as either operating or non-operating. GASB Statement No. 35 requires state appropriations, gifts, investment income and endowment income to be classified as non-operating revenues. Accordingly, the University reports an operating loss prior to the addition of non-operating revenues. The utilization of long-lived capital assets is reflected in the financial statements as depreciation, which amortizes the cost of an asset over its expected useful life. Tuition revenue is reduced by gift scholarships and institutional aid, and is reported net of scholarship allowances in the financial statements. A summarized comparison of the University's revenues, expenses and changes in net position for the years ended June 30, 2014 and June 30, 2013 is as follows.",
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"text": "Total operating revenues were $38.7 million for the year ended June 30, 2014, a decrease of $1.1 million compared to FY13. The primary components of operating revenue were federal, state and local grants and contracts of $8.2 million (21.2%) student tuition and fees, net, of $16.5 million (42.6%), federal appropriations of $6.7 million (17.4%) and auxiliary services and other revenues of $7.3 million (18.8%). FY14 Student tuition and fees revenue decreased $124 thousand compared to FY13. FY14 Grants and contracts of $948 thousand compared to FY13 due to decreased awards and spending. FY14 Federal appropriations decreased $151 thousand compared to FY13. FY14 Auxiliary services and other revenue decreased $95 thousand compared to FY13. Refer to Figure 1 for the three year trend of the operating revenues as a percent to total operating revenues and revenue by category.",
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"text": "Operating expenses totaled $73.7 million, an increase of $2.5 million over last year. Of this amount, $42.6 million (57.8%) was expended directly for the primary mission of the University – instruction (17.3%), research (7.5%), student services (9.9%), student aid (12.5%), and public service (10.6%). Instruction is the main component of Primary Mission expenses amounting to $12.8 million in fiscal year 2014 or 17.3%. Refer to Figure 2 for the operating expenses categorized into the Primary Mission of the University.",
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"text": "(Percentages below do not include depreciation or operations/maintenance allocations.)",
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"text": "In addition to the Primary Mission expenses of the University, there are expenses from depreciation and operations & maintenance that are allocated to the various functional classifications (See note 12 – Schedule of Expenses by Program). See below for the operating expenses categorized into the Functional Expenses of the University. (Percentages below include depreciation and operations/maintenance allocations.)",
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"text": "The University continued to invest in student aid and support services to provide students with opportunities to be successful in fiscal 2014. For the year ended June 30, 2014, student aid related to tuition and fees totaled $8.3 million, with student aid expenses of $9.2 million and scholarship allowances of $4.9 million.",
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"text": "The net loss from operations for the year amounted to $35.0 million. Non-operating revenues, net of expenses, amounted to $30.9 million, resulting in a decrease in income before other revenues, expenses, gains or loss of $4.0 million for the year. Non-operating revenues include state appropriations of $23.5 million, non-operating federal grants and contracts of $5.9 million, gifts of $13 thousand and investment income of $1.7 million, and other non-operating income net of revenue of $71 thousand.",
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"text": "Major sources of cash received from operating activities are student tuition and fees of $18.4 million and grants and contracts of $15.5 million. Major uses of cash for operating activities were payments to employees for salaries and benefits of $37.4 million and to vendors and contractors of $23.5 million.",
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"text": "Federal appropriations",
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{
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"text": "Total appropriations",
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"text": "Capital Appropriations for the Commonwealth",
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"text": "The University faces financial challenges to maintain and upgrade its capital assets including its infrastructure, buildings and grounds. A combination of revenue sources funds the University's investment in capital improvements, including appropriations provided by the Commonwealth of Kentucky. In fiscal year 2014, the Commonwealth provided no capital appropriations to the University. State capital appropriations plus federal sources play an important role in the University's efforts to address deferred maintenance projects.",
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"text": "The following table details the University's grant and contract revenue for fiscal years ended June 30, 2014, 2013 and 2012.",
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"text": "Federal grants and contracts, operating",
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"text": "Total grants and contracts",
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"text": "KENTUCKY STATE UNIVERSITY\nManagement's Discussion and Analysis, continued",
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"text": "Capital Plan",
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"text": "During fiscal year 2014, Kentucky State University started construction on the Dr. Cheaney Legacy Plaza. Design of several construction projects started: Old Federal Bldg. Restoration / Renovation Phase II (Aquaculture KY River Interpretive Center); Renovate Atwood Agriculture Research Bldg.; and Privatized Housing. The University completed a roof replacement project for Alumni Stadium Office and Locker Bldg. In addition HVAC improvements were made to the Ceramics Classroom in Shauntee Hall; hallways and stairwells were painted and floor tile replaced in Shauntee Hall.",
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"text": "The execution of the University's capital plan is contingent upon sufficient funding from the Commonwealth. The Kentucky General Assembly during the 2014 regular session approved state bond funding for one project out of the University submitted Six Year Capital Plan. State Bond Funds of $10,400,000 was approved for \"Repair Boilers and Aging Distribution Lines\". This project will replace boilers and repair a portion of the existing steam plant system.",
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"text": "New construction projects proposed and only authorized for expenditure of KSU Restricted Funds include: $9 million to expand or build a new Betty White Nursing Building, which will provide 19,800 square feet of new classroom space to accommodate enrollment into the nursing program; $46.4 million to construct a centralized boiler plant to replace the existing seventy year old plant; $31.5 million to construct a Business & Technology Center to house the business school and the computer science program; $96 million to build a Performing Arts Center to replace antiquated Bradford Hall. Maintenance projects include but are not limited to: Roof Repair & Maintenance Pool; $3.4 million and a $1.5 million Capital Renewal & Maintenance Pool. Information Technology projects include but are not limited to: Integrated Digital Campus $11.4 million; Expand Emergency Notification System $4.5 million; Upgrade Information Technology Infrastructure $6.2 million.",
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"text": "Major capital-related needs and issues facing the university with its aging facilities was documented in the 2007 VFA Facility Condition Assessment and Space Study. The process used for determining the 2014-2020 priorities was enhanced by utilization of the 2008 Campus Master Plan Update and the information gathered as part of that effort as well as the VFA findings. These two initiatives are the framework of the 2014-2020 Capital Plan. The Capital Planning and Construction Division, the Facilities Services Division, and the Information Technology Division collaborated to establish initial priorities for the plan. Priorities were further refined when Cabinet-level administrators and the President reviewed the project list linked to specific University initiatives.",
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"text": "In the tables below, expenses have been categorized into designated or non-designated spending categories. The designated spending category includes funds expended by function from contracts and grants, land grant, auxiliary and depreciation. These funds must be expended for the purposes for which the funds were received or budgeted. This category also includes funds for student aid. All other spending is categorized as non-designated spending. Total spending for all functions in the non-designated category increased by approximately $3.5 million in 2014, primarily due to the increase in recognizing bad debt expense in the institutional support category.",
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"text": "University management continues its strategic mission to uniquely position Kentucky State University as Kentucky's small public liberal arts institution of excellence for the citizens of the Commonwealth and for advancing higher education in Kentucky by inspiring innovation, growing leaders and advancing Kentucky. Executive management continues to work with the Council on Postsecondary Education to address the needs of the Commonwealth and believe it is positioning the University to become a strong, financially viable and efficient institution of higher learning.",
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"bbox": {
"l": 236.8,
"t": 607.7014,
"r": 394.88,
"b": 591.2921
},
"text": "8,535,442",
"attrs": {
"row": 4,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 9
},
{
"id": "p136.4.11",
"order": 15,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 607.7014,
"r": 552.96,
"b": 591.2921
},
"text": "10,875,339",
"attrs": {
"row": 4,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 10
},
{
"id": "p136.4.12",
"order": 16,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 591.2921,
"r": 236.8,
"b": 574.8828
},
"text": "Inventory and other current assets",
"attrs": {
"row": 5,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 11
},
{
"id": "p136.4.13",
"order": 17,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 591.2921,
"r": 394.88,
"b": 574.8828
},
"text": "157,844",
"attrs": {
"row": 5,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 12
},
{
"id": "p136.4.14",
"order": 18,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 591.2921,
"r": 552.96,
"b": 574.8828
},
"text": "538,521",
"attrs": {
"row": 5,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 13
},
{
"id": "p136.4.15",
"order": 19,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 574.8828,
"r": 236.8,
"b": 558.4735
},
"text": "Total current assets",
"attrs": {
"row": 6,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 14
},
{
"id": "p136.4.16",
"order": 20,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 574.8828,
"r": 394.88,
"b": 558.4735
},
"text": "28,269,249",
"attrs": {
"row": 6,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 15
},
{
"id": "p136.4.17",
"order": 21,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 574.8828,
"r": 552.96,
"b": 558.4735
},
"text": "32,521,844",
"attrs": {
"row": 6,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 16
},
{
"id": "p136.4.18",
"order": 22,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 558.4735,
"r": 552.96,
"b": 542.0642
},
"text": "Noncurrent assets",
"attrs": {
"row": 7,
"col": 0,
"rowspan": 1,
"colspan": 3
},
"reading_order": 17
},
{
"id": "p136.4.19",
"order": 23,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 542.0642,
"r": 236.8,
"b": 525.655
},
"text": "Accounts, grants and loans receivable, net",
"attrs": {
"row": 8,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 18
},
{
"id": "p136.4.20",
"order": 24,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 542.0642,
"r": 394.88,
"b": 525.655
},
"text": "241,030",
"attrs": {
"row": 8,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 19
},
{
"id": "p136.4.21",
"order": 25,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 542.0642,
"r": 552.96,
"b": 525.655
},
"text": "443,881",
"attrs": {
"row": 8,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 20
},
{
"id": "p136.4.22",
"order": 26,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 525.655,
"r": 236.8,
"b": 509.2457
},
"text": "Investments",
"attrs": {
"row": 9,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 21
},
{
"id": "p136.4.23",
"order": 27,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 525.655,
"r": 394.88,
"b": 509.2457
},
"text": "15,303,098",
"attrs": {
"row": 9,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 22
},
{
"id": "p136.4.24",
"order": 28,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 525.655,
"r": 552.96,
"b": 509.2457
},
"text": "13,501,397",
"attrs": {
"row": 9,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 23
},
{
"id": "p136.4.25",
"order": 29,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 509.2457,
"r": 236.8,
"b": 492.8364
},
"text": "Capital assets, net",
"attrs": {
"row": 10,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 24
},
{
"id": "p136.4.26",
"order": 30,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 509.2457,
"r": 394.88,
"b": 492.8364
},
"text": "80,661,020",
"attrs": {
"row": 10,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 25
},
{
"id": "p136.4.27",
"order": 31,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 509.2457,
"r": 552.96,
"b": 492.8364
},
"text": "83,185,618",
"attrs": {
"row": 10,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 26
},
{
"id": "p136.4.28",
"order": 32,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 492.8364,
"r": 236.8,
"b": 476.4271
},
"text": "Total noncurrent assets",
"attrs": {
"row": 11,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 27
},
{
"id": "p136.4.29",
"order": 33,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 492.8364,
"r": 394.88,
"b": 476.4271
},
"text": "96,205,148",
"attrs": {
"row": 11,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 28
},
{
"id": "p136.4.30",
"order": 34,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 492.8364,
"r": 552.96,
"b": 476.4271
},
"text": "97,130,896",
"attrs": {
"row": 11,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 29
},
{
"id": "p136.4.31",
"order": 35,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 476.4271,
"r": 236.8,
"b": 460.0178
},
"text": "Total assets",
"attrs": {
"row": 12,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 30
},
{
"id": "p136.4.32",
"order": 36,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 476.4271,
"r": 394.88,
"b": 460.0178
},
"text": "124,474,397",
"attrs": {
"row": 12,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 31
},
{
"id": "p136.4.33",
"order": 37,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 476.4271,
"r": 552.96,
"b": 460.0178
},
"text": "129,652,740",
"attrs": {
"row": 12,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 32
},
{
"id": "p136.4.34",
"order": 38,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 460.0178,
"r": 552.96,
"b": 443.6085
},
"text": "LIABILITIES",
"attrs": {
"row": 13,
"col": 0,
"rowspan": 1,
"colspan": 3
},
"reading_order": 33
},
{
"id": "p136.4.35",
"order": 39,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 443.6085,
"r": 552.96,
"b": 427.1992
},
"text": "Current liabilities",
"attrs": {
"row": 14,
"col": 0,
"rowspan": 1,
"colspan": 3
},
"reading_order": 34
},
{
"id": "p136.4.36",
"order": 40,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 427.1992,
"r": 236.8,
"b": 410.7899
},
"text": "Accounts payable and accrued liabilities",
"attrs": {
"row": 15,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 35
},
{
"id": "p136.4.37",
"order": 41,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 427.1992,
"r": 394.88,
"b": 410.7899
},
"text": "3,402,242",
"attrs": {
"row": 15,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 36
},
{
"id": "p136.4.38",
"order": 42,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 427.1992,
"r": 552.96,
"b": 410.7899
},
"text": "3,291,014",
"attrs": {
"row": 15,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 37
},
{
"id": "p136.4.39",
"order": 43,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 410.7899,
"r": 236.8,
"b": 394.3806
},
"text": "Accrued compensated absences",
"attrs": {
"row": 16,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 38
},
{
"id": "p136.4.40",
"order": 44,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 410.7899,
"r": 394.88,
"b": 394.3806
},
"text": "1,557,350",
"attrs": {
"row": 16,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 39
},
{
"id": "p136.4.41",
"order": 45,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 410.7899,
"r": 552.96,
"b": 394.3806
},
"text": "1,633,551",
"attrs": {
"row": 16,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 40
},
{
"id": "p136.4.42",
"order": 46,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 394.3806,
"r": 236.8,
"b": 377.9713
},
"text": "Unearned revenue",
"attrs": {
"row": 17,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 41
},
{
"id": "p136.4.43",
"order": 47,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 394.3806,
"r": 394.88,
"b": 377.9713
},
"text": "1,299,328",
"attrs": {
"row": 17,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 42
},
{
"id": "p136.4.44",
"order": 48,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 394.3806,
"r": 552.96,
"b": 377.9713
},
"text": "1,280,078",
"attrs": {
"row": 17,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 43
},
{
"id": "p136.4.45",
"order": 49,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 377.9713,
"r": 236.8,
"b": 361.562
},
"text": "Deposits",
"attrs": {
"row": 18,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 44
},
{
"id": "p136.4.46",
"order": 50,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 377.9713,
"r": 394.88,
"b": 361.562
},
"text": "169,221",
"attrs": {
"row": 18,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 45
},
{
"id": "p136.4.47",
"order": 51,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 377.9713,
"r": 552.96,
"b": 361.562
},
"text": "160,856",
"attrs": {
"row": 18,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 46
},
{
"id": "p136.4.48",
"order": 52,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 361.562,
"r": 236.8,
"b": 345.1527
},
"text": "Other current liabilities",
"attrs": {
"row": 19,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 47
},
{
"id": "p136.4.49",
"order": 53,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 361.562,
"r": 394.88,
"b": 345.1527
},
"text": "91,700",
"attrs": {
"row": 19,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 48
},
{
"id": "p136.4.50",
"order": 54,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 361.562,
"r": 552.96,
"b": 345.1527
},
"text": "63,283",
"attrs": {
"row": 19,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 49
},
{
"id": "p136.4.51",
"order": 55,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 345.1527,
"r": 236.8,
"b": 328.7434
},
"text": "Long-term debt, current portion",
"attrs": {
"row": 20,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 50
},
{
"id": "p136.4.52",
"order": 56,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 345.1527,
"r": 394.88,
"b": 328.7434
},
"text": "753,065",
"attrs": {
"row": 20,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 51
},
{
"id": "p136.4.53",
"order": 57,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 345.1527,
"r": 552.96,
"b": 328.7434
},
"text": "875,082",
"attrs": {
"row": 20,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 52
},
{
"id": "p136.4.54",
"order": 58,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 328.7434,
"r": 236.8,
"b": 312.3341
},
"text": "Total current liabilities",
"attrs": {
"row": 21,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 53
},
{
"id": "p136.4.55",
"order": 59,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 328.7434,
"r": 394.88,
"b": 312.3341
},
"text": "7,272,906",
"attrs": {
"row": 21,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 54
},
{
"id": "p136.4.56",
"order": 60,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 328.7434,
"r": 552.96,
"b": 312.3341
},
"text": "7,303,864",
"attrs": {
"row": 21,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 55
},
{
"id": "p136.4.57",
"order": 61,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 312.3341,
"r": 552.96,
"b": 295.9248
},
"text": "Noncurrent liabilities",
"attrs": {
"row": 22,
"col": 0,
"rowspan": 1,
"colspan": 3
},
"reading_order": 56
},
{
"id": "p136.4.58",
"order": 62,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 295.9248,
"r": 236.8,
"b": 279.5155
},
"text": "Long-term debt, noncurrent portion",
"attrs": {
"row": 23,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 57
},
{
"id": "p136.4.59",
"order": 63,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 295.9248,
"r": 394.88,
"b": 279.5155
},
"text": "6,649,041",
"attrs": {
"row": 23,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 58
},
{
"id": "p136.4.60",
"order": 64,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 295.9248,
"r": 552.96,
"b": 279.5155
},
"text": "7,300,902",
"attrs": {
"row": 23,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 59
},
{
"id": "p136.4.61",
"order": 65,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 279.5155,
"r": 236.8,
"b": 263.1062
},
"text": "Federal grants refundable",
"attrs": {
"row": 24,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 60
},
{
"id": "p136.4.62",
"order": 66,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 279.5155,
"r": 394.88,
"b": 263.1062
},
"text": "534,914",
"attrs": {
"row": 24,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 61
},
{
"id": "p136.4.63",
"order": 67,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 279.5155,
"r": 552.96,
"b": 263.1062
},
"text": "991,709",
"attrs": {
"row": 24,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 62
},
{
"id": "p136.4.64",
"order": 68,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 263.1062,
"r": 236.8,
"b": 246.697
},
"text": "Total noncurrent liabilities",
"attrs": {
"row": 25,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 63
},
{
"id": "p136.4.65",
"order": 69,
"type": "table_cell",
"bbox": {
"l": 236.8,
"t": 263.1062,
"r": 394.88,
"b": 246.697
},
"text": "7,183,955",
"attrs": {
"row": 25,
"col": 1,
"rowspan": 1,
"colspan": 1
},
"reading_order": 64
},
{
"id": "p136.4.66",
"order": 70,
"type": "table_cell",
"bbox": {
"l": 394.88,
"t": 263.1062,
"r": 552.96,
"b": 246.697
},
"text": "8,292,611",
"attrs": {
"row": 25,
"col": 2,
"rowspan": 1,
"colspan": 1
},
"reading_order": 65
},
{
"id": "p136.4.67",
"order": 71,
"type": "table_cell",
"bbox": {
"l": 78.72,
"t": 246.697,
"r": 236.8,
"b": 230.2877
},
"text": "Total liabilities",
"attrs": {
"row": 26,
"col": 0,
"rowspan": 1,
"colspan": 1
},
"reading_order": 66
},
{
"id": "p136.4.68",
"order": 72,
"type": "table_cell",
"bbox": {
"l": 236.8,
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"text": "The financial statements have been prepared on the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when an obligation has been incurred.",
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"text": "GASB Statement No. 35 establishes standards for external financial reporting for public colleges and universities and requires that resources be classified for accounting and reporting purposes into the following net asset categories:",
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"text": "• Invested in capital assets, net of related debt: Capital assets, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction or improvement of those assets.",
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"text": "28",
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"text": "Nonexpendable – Net position subject to externally imposed stipulations that they be maintained permanently by the University. Such position include the University's permanent endowment funds.",
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"text": "Expendable– Net position whose use by the University is subject to externally imposed stipulations that can be fulfilled by actions of the University pursuant to those stipulations or that expire by the passage of time.",
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"text": "Accounts receivables consist of tuition and fee charges, loans to students and amounts due from federal and state governments, non-governmental sources, in connection with reimbursements of allowable expenses made pursuant to grants and contracts. Accounts receivables are recorded net of allowance for doubtful accounts.",
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"text": "The allowance for doubtful accounts is established through a provision for doubtful accounts charged to expense. The allowance represents an amount, which, in management's judgment, will be adequate to absorb probable losses on existing accounts that may become uncollectible.",
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"text": "Kentucky State University recognizes its fiduciary duty not only to invest the University's endowment holdings in formal compliance with the Uniform Prudent Management of Institutional Funds Act (UPMIFA) but also to manage those funds in continued recognition of the basic long-term nature of the University. The University interprets this to mean, in addition to the adopted spending guidelines and restrictions described below, that the assets of the University shall be actively managed, that is, investment decisions regarding the particular securities to be purchased or sold shall be the result of the conscious exercise of discretion. The University recognizes that, commensurate with its overall objective of maximizing long-range return while maintaining a high standard of portfolio quality and consistency of return, it is necessary that proper diversification of assets be maintained both among and within the classes of securities held. Within this context of active management and the necessity of adherence to proper diversification, the University relies upon appropriate professional advice.",
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"text": "The University recognizes that long-term objectives are most important, but it is also necessary that shorter-term benchmarks be used to assess the periodic performance of the investment program. The University anticipates annual spending of five percent (5%) of the average market value for the past three years, the amount of which shall be determined in January of each year.",
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"text": "The University believes that it is prudent to diversify endowment investments so as to minimize the risks of large losses and has established asset allocation ranges based upon the University's participation demographics, anticipated cash flow requirements and the expected returns of the capital markets. The University President will allocate assets within classes of investments which he/she considers to be appropriate.",
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"text": "The liability and expense incurred for employee vacation and sick pay are recorded as accrued compensated absences in the statements of net position and as a component of compensation and benefit expense in the statements of revenues, expenses and changes in net position.",
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"text": "Unearned revenue includes amounts received for tuition and fees prior to the end of the fiscal year but related to the subsequent reporting period. Unearned revenues also include amounts received from grant and contract sponsors and state deferred maintenance funds that have not yet been earned.",
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"text": "Income Taxes",
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"text": "The University is an agency and instrumentality of the Commonwealth of Kentucky, pursuant to Kentucky Revised Statutes sections 164.290 through 164.475. Accordingly, the University is generally exempt from federal income taxes as an organization described in Section 115 of the Internal Revenue Code of 1986, as amended. The Foundation has received a determination from the Internal Revenue Service granting exemption from federal income taxation pursuant to the provisions of the Internal Revenue Code section 501(c)(3).",
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"text": "The University's policy is that restrictions on assets cannot be fulfilled by the expenditure of unrestricted funds for similar purposes. The determination on whether restricted or unrestricted funds are expended for a particular purpose is made on a case-by-case basis. Restricted funds remain restricted until spent for the intended purpose.",
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"text": "The University defines operating activities, as reported on the statement of revenues, expenses and changes in net position, as those that generally result from exchange transactions, such as payments received for providing goods and services and payments made for services and goods received. Nearly all of the University's expenses are from exchange transactions. Certain significant revenues relied upon for operations, such as state and certain federal appropriations, gifts and investment income, are recorded as non-operating revenues, in accordance with GASB Statement No. 35.",
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"text": "Financial aid to students is reported in the financial statements under the alternative method as prescribed by the National Association of College and University Business Officers (NACUBO). Certain aid, such as loans and funds provided to students awarded by third parties, is accounted for as third party payments (credited to the student's account as if the student made the payment). All other aid is reflected in the financial statements as operating expenses, or scholarship allowances, which reduce revenues. The amount reported as operating expenses represents the portion of aid that was provided to the student in the form of cash. Scholarship allowances represent the portion of aid provided to the student in the form of reduced tuition. Under the alternative method, these amounts are computed by allocating the cash payments to students, excluding payments for services, on the ratio of total aid to the aid not considered to be third party aid.",
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"text": "Per GASB Statement No. 24, pass-through grants should be reported as revenues and expenses in the financial statements if that entity has any administrative or direct financial involvement in the program. An entity has administrative involvement if it determines eligible secondary recipients or projects, even if using grantor-established criteria. Therefore, Pell Grants are considered non-exchange transactions and are recorded as non-operating revenues in the accompanying financial statements.",
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"text": "The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.",
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"text": "The accompanying financial statements of the Foundation have been prepared in accordance with accounting principles generally accepted in the United States of America as prescribed by the FASB. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features.",
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"text": "During the year ended June 30, 2014 and 2013, the Foundation made distributions of approximately $203,600 and $255,500 respectively, on behalf of the University for both restricted and unrestricted purposes. Complete financial statements for the Foundation can be obtained from the Kentucky State University Foundation, Inc. at P.O. Box 4210, Frankfort, KY 40604.",
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"text": "In November 2013, the GASB approved Statement No. 71, Pension transition for contributions made subsequent to the measurement date – an amendment of GASB Statement No. 68. The objective of this Statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement date of the government's beginning net pension liability. This Statement amends paragraph 137 of Statement 68 to require that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. Statement 68, as amended, continues to require that beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions be reported at transition only if it is practical to determine all such amounts. The provisions of this Statement are required to be applied simultaneously with the provisions of Statement 68.",
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"text": "In June 2012, the GASB approved Statement No. 68, Accounting and Financial Reporting for Pensions. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administers as trusts or similar arrangements that meet certain criteria. Statement 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits.",
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"text": "Cost-sharing governmental employers will also be required to report a net pension liability, pension expense and pension-related assets and liabilities based on their proportionate share of the collective amounts for all governments in the plan. All governments participating in the defined benefit pension plan would also have the following in their note disclosures:",
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"text": "The provisions of this Statement are effective for fiscal years beginning after June 15, 2014. The University is currently evaluating the effects of this statement on its financial statements.",
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"text": "In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities. This statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. This statement also provides other financial reporting guidance related to the impact of the financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the determination of the major fund calculations and limiting the use of the term deferred in financial statement presentations. The requirements of this statement were implemented as of June 30, 2014. This statement did not significantly affect the University's financial statements.",
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"text": "2. Cash, Cash Equivalents, and Investments",
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"text": "The statement of net position classification \"cash and cash equivalents\" includes all readily available sources of cash such as petty cash, demand deposits, certificates of deposit and temporary investments in marketable securities with original maturities less than three months.",
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"text": "At June 30, 2014 and 2013, the University had petty cash funds totaling zero, and deposits as reflected by bank balances as follows:",
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"text": "The University leases computer equipment under operating leases, which expired and was renewed on August 1, 2014. Lease payments to the lessors under these leases totaled $122,016 and $125,232 for the years ended June 30, 2014 and 2013, respectively.",
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"text": "9. Employee Benefits",
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{
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"text": "Kentucky Teachers Retirement System",
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{
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"text": "All faculty and exempt employees required to hold a degree and occupying full-time positions, defined as seven-tenths (7/10) of normal full-time service on a daily or weekly basis, are required by state law to participate either in the Kentucky Teachers Retirement System (KTRS) or the Optional Retirement Plan (ORP). KTRS, a cost sharing, multiple-employer, public employee retirement system, provides retirement",
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"text": "KENTUCKY STATE UNIVERSITY\nNotes to the Financial Statements, continued",
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"text": "Kentucky Teachers Retirement System, continued",
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"text": "benefits based on an employee's final average salary and number of years of service. Benefits are subject to certain reductions if the employee retires before reaching age sixty, unless the employee has twenty-seven or more years of participation in the plan. The plan also provides for disability retirement, death and survivor benefits and medical insurance.",
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{
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"text": "The Kentucky Teachers Retirement System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Kentucky Teachers Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601-3868 or by calling (502) 848-8500.",
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{
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"text": "Funding for the plan is provided from eligible employees who contribute 7.16% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 14.84% of current eligible employees' salaries to the KTRS through appropriations to the University. Contribution requirements of the plan members and the University are established by Kentucky Revised Statute and the KTRS Board of Trustees. The University's contributions to KTRS for the years ended June 30, 2014, 2013 and 2012 were $2,483,138, $2,037,331, and $2,155,711, respectively, and equaled the required contribution for that year.",
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"text": "Kentucky Employees Retirement System",
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"text": "Substantially all other full-time University employees are required by law to participate in the Kentucky Employees Retirement System (KERS), a cost sharing multiple-employer, public employee retirement system. KERS provides retirement benefits based on an employee's final average salary and number of years of service. Benefits are subject to certain reductions if the employee retires before reaching age sixty-five, or less than twenty-seven years of service. The plan also provides for disability retirement, death and survivor benefits and medical insurance.",
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"text": "The Kentucky Employees Retirement System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Kentucky Employees Retirement System, 1260 Louisville Road, Perimeter Park West, Frankfort, Kentucky 40601 or by calling (502) 564-4646.",
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"text": "Funding for the plan is provided from eligible employees who contribute 5.00% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 26.79% of current eligible employees' salaries to the KERS through appropriations to the University. Employees hired on or after July 1, 2008 contribute 6.00% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 26.79% to the KERS through appropriations to the University. The University contribution rates are determined by the Kentucky Revised Statute and the Board of Trustees of the Kentucky Retirement System each biennium. The University's contributions to KERS for the years ended June 30, 2014, 2013 and 2012 were $1,432,369, $1,218,234, and $1,041,753, respectively, and equaled the required contribution for that year.",
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"text": "KENTUCKY STATE UNIVERSITY\nNotes to the Financial Statements, continued",
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"text": "Health care and life insurance benefits are provided for eligible retired employees through the above pension plans. Expenditures for all employee benefits are included as expenditures within the appropriate functional areas.",
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"text": "Optional Retirement Plan",
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"text": "All faculty and exempt employees who are eligible to participate in the KTRS retirement plan may elect to participate in the Optional Retirement Plan (ORP) instead of KTRS. In doing so, the employee may choose both Teachers Insurance and Annuity Association of America, (TIAA-CREF) or The Variable Annuity Life Insurance Company (VALIC). Both offer a defined contribution, 403b plan.",
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"text": "TIAA-CREF is one of the largest and most respected financial service providers in the world (unaudited). TIAA-CREF Individual & Institutional Services, Inc. distributes CREF and TIAA Real Estate Account variable annuities. Teachers Personal Investors Services, Inc. distributes Personal Annuity variable annuities, TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds, and TIAA-CREF Tuition Financing, Inc. products. TIAA-CREF Trust Company, FSB, provides trust services. Located in New York, NY, Teachers Insurance and Annuity Association of America (TIAA) and TIAA-CREF Life Insurance Company issue insurance and annuities. Financial statements are available on the website, www.tiaacref.com.",
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"text": "VALIC is the marketing name for the family of companies comprising VALIC Financial Advisors, Inc.; VALIC Retirement Services Company; VALIC Trust Company; and The Variable Annuity Life Insurance Company (VALIC); which are all members of American International Group, Inc. (AIG).",
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"text": "Complete information about VALIC's variable annuities, including financial statements, fees, charges, expenses and contract limitations, can be obtained by visiting the website www.aigvalic.com or by calling 1-800-428-2542.",
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"text": "Funding for the ORP is provided from eligible employees who contribute 6.16% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 8.74% of current eligible employees' salaries to the ORP through appropriations to the University. The University's contributions to ORP for the years ended June 30, 2014, 2013 and 2012 were $554,207, $485,224, and $434,586, respectively, and equaled the required contribution for the year.",
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"text": "Effective July 1, 2010, KRS 61.546 states that the value of any accumulated sick leave that is added to the member's service credit in the KERS and KTRS on or after July 1, 2010 shall be paid to the retirement system by the last participating employer, based upon a formula adopted by the KERS and KTRS Boards. The KERS/KTRS sick leave liability as of June 30, 2014 and 2013 was $346,431 and $500,000.",
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"text": "KENTUCKY STATE UNIVERSITY",
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"text": "10. Commitments and Contingencies",
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"text": "The University is a party to various law suits and other claims in the ordinary course of business. University officials are of the opinion, based upon the advice of legal counsel, that the ultimate resolution of these matters will not have a material effect on the financial statements of the University.",
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"text": "The University receives financial assistance from federal and state agencies in the form of grants and awards. The expenditure of funds received from these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audit could become a liability of the applicable fund. In the opinion of management, such potential disallowed claims, if any, would not have a material adverse effect on the overall financial position of the University at June 30, 2014.",
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"text": "11. Risk Management",
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"text": "In the University is exposed to various risks of loss from torts; theft of, damage to, destruction of assets; business interruption; employee injuries and illnesses; natural disasters; and employee health and accident benefits. Commercial insurance coverage is purchased for claims arising from these risks. Settled claims have not exceeded this commercial coverage in any of the three preceding years. As a sovereign entity of the Commonwealth of Kentucky, the Kentucky Board of Claims handles tort claims on behalf of the University.",
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"text": "12. Schedule of Expenses by Program",
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"text": "In the Statement of Revenues, Expenses and Changes in Net Position, operating expenses are presented by functional expense purpose. Depreciation is allocated below based on functional classification as required by IPEDS for Fiscal Year 2014. Functional expense purpose is classified by natural classification:",
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"text": "KENTUCKY STATE UNIVERSITY",
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"text": "Property and equipment is recorded at cost if purchased or fair market value at date of contribution if contributed. If the donors stipulate how long the assets must be used, the contributions of property and equipment are recorded as restricted support. In the absence of such stipulations, these contributions are recorded as unrestricted support. Depreciation is computed on a straight-line basis over the estimated",
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"text": "47",
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"text": "b. Summary of Significant Accounting Policies, continued:",
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"text": "useful lives of the respective assets. Depreciation expense was $16,022 and 17,718 for the years ended June 30, 2014 and 2013, respectively.",
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"text": "Contributions are generally recognized when received. However, pledges are recognized when the donor makes a promise to give to the Foundation that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets.",
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"text": "Income Taxes",
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"text": "Kentucky State University Foundation, Inc., a not-for-profit organization operating under Section 501(c)(3) of the Internal Revenue Code, is generally exempt from federal, state and local income taxes. The Foundation's management does not believe the Foundation has any unrelated business income. Accordingly, no provision for income taxes is recorded in the financial statements.",
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"text": "Management has evaluated the Foundation's tax positions and concluded that the Foundation had taken no material uncertain tax positions that require recognition or disclosure in the financial statements. With few exceptions, the Foundation is no longer subject to income tax examinations by the U.S. federal, state or local tax authorities for years before 2010.",
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"text": "The Foundation's management has evaluated subsequent events for accounting and disclosure requirements through October 2, 2014, the date the financial statements were available to be issued. There were no events occurring during the evaluation period that require recognition or disclosure in the financial statements.",
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"text": "The presentation of certain items in 2013 were reclassified to conform with the 2014 presentation, this reclassification had no impact on net assets or change in net assets.",
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"text": "During 2013, the Foundation determined that certain amounts were improperly classified between the net asset categories. Certain amounts have been reclassified to more accurately reflect the net asset balances of the Foundation based on donor intent. This reclassification had no effect on total change in net assets or total net assets.",
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"text": "Investments as of June 30, 2014 and 2013 are summarized as follows:",
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"text": "Equity securities",
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"text": "$ 6,534,855",
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"text": "1,820,065",
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"colspan": 1
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"text": "1,202,729",
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"colspan": 1
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"colspan": 1
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"text": "Total investments",
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"text": "$ 9,175,002",
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"rowspan": 1,
"colspan": 1
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"text": "$ 7,924,717",
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"rowspan": 1,
"colspan": 1
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"text": "d. Fair Value Measurements",
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"text": "The Foundation classifies its investments based on a hierarchy consisting of: Level 1 (valued using quoted prices from active markets for identical assets), Level 2 (not traded on an active market but for which observable market inputs are readily available), and Level 3 (valued based on significant unobservable inputs). The investment's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.",
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"text": "The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used as of June 30, 2014 and 2013.",
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"text": "Common stocks, debt securities, U.S. government securities, equity exchange traded funds, and marketable limited partnerships: Valued at the closing price reported on the active market on which the individual securities are traded. Some level 2 inputs are used for pricing of municipal and corporate bonds; therefore, they are all classified as level 2.",
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"text": "Mutual funds and real estate investment trust: Valued at the net asset value (NAV) of shares held by the Foundation at year end.",
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"text": "The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Foundation believes its valuation methods are appropriate and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.",
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"text": "KENTUCKY STATE UNIVERSITY",
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"text": "13. Kentucky State University Foundation, Inc. continued",
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"text": "Fair value measurements as of June 30, 2014 are as follows:",
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"text": "Members of the Board of Regents\nKentucky State University\nFrankfort, Kentucky",
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"text": "We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Kentucky State University (the University) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise Kentucky State University's basic financial statement as listed on the table of contents, and have issued our report thereon dated October 7, 2014.",
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"text": "In planning and performing our audit of the financial statements, we considered the University's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University's internal control. Accordingly, we do not express an opinion on the effectiveness of the University's internal control.",
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"text": "A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.",
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"text": "Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Responses that we consider to be significant deficiencies, findings 2014-001 and 2014-002.",
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"text": "106 W. Vine Street, Suite 600 • Lexington, KY 40507 • 859-255-2341 phone • 859-255-0125 fax 500 W. Jefferson Street, Suite 1400 • Louisville, KY 40202 • 502-589-6050 phone • 502-581-9016 fax",
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"text": "As part of obtaining reasonable assurance about whether the University's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.",
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"text": "The University's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Responses. The University's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.",
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"text": "The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.",
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"text": "KENTUCKY STATE UNIVERSITY\nSchedule of Findings and Responses, continued",
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"text": "Material weaknesses: No",
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"text": "Significant deficiencies identified that are not considered to be material weaknesses: Yes",
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"text": "c. Non-compliance which is material to the financial statements: No",
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"text": "The student accounts receivable subsidiary ledger and the allowance for uncollectible student accounts receivable are not reconciled and adjusted periodically throughout the year. The student accounts receivable aging should be analyzed and reconciled to the general ledger at least quarterly. The aging should be analyzed in accordance with University policy to ensure that the allowance for uncollectible student accounts receivable is accurately reflected in accordance with University policy. This reconciliation and associated allowance calculation should be submitted to University management for review and approval.",
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"text": "The University posted an adjusting journal entry to reconcile student accounts receivable subsidiary to the general ledger and to increase the allowance for doubtful accounts subsequent to year end. Increased management effort in this area could result in a reduction in the number and amount of delinquent and potentially worthless receivables. The positive results from this process may include significantly improved cash flow and profitability and should minimize the need for a year-end adjustment of this account.",
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"text": "We recommend the University reconcile the student accounts receivable subsidiary ledger to the general ledger at least quarterly and assess the collectability of all student accounts receivable on a quarterly basis.",
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"text": "The continuous review of accounts receivable for old and slow-paying accounts.",
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"text": "A formal periodic review of the account receivable aged trial balance.",
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"text": "The implementation of formalized procedures for contacting delinquent accounts for payment, such as sending letters to slow-paying students.",
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"text": "The increased use of collection agencies and the department of revenue to aid in collecting delinquent accounts.",
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"text": "Management concurs. Accounts receivable will be reviewed for old and slow-paying accounts at least quarterly. The aged trial balance will also be reviewed at least quarterly. Management is developing new processes for contacting slow-paying or delinquent registered students. Beginning Fall 2014, the University has implemented more stringent policies for new and returning students, with regard to their responsibility to pay their outstanding bill. Students that fail to pay their outstanding balances will be sent to collection agencies at minimum, the end of each term, to assist with the collection of outstanding balances.",
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"text": "Finding 2014-002:",
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"text": "During the audit it was noted that the University has not performed a physical count of capital assets in several years.",
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"text": "The University cannot substantiate that the capital assets ledger is accurate.",
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"text": "We recommend that the University implement a process such that a physical count of capital assets is performed at least every two years and reconciled to the general ledger.",
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"text": "Management concurs. A plan to conduct a physical count of inventory will be established and then performed by the end of fiscal year 2015.",
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"text": "During the year ended June 30, 2013 the University did not have adequate controls over financial reporting to allow for timely, accurate financial reporting. All general ledger accounts were not reconciled to subsidiary ledgers or other supporting detail at least on a quarterly basis.",
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"text": "During the audit several adjusting journal entries which impacted the years ended June 30, 2013, 2012, and prior years, were recorded to accurately reflect the financial position of the University as of June 30, 2013. These journal entries primarily related to the reconciliation of student accounts receivable, grants receivable and the accrual of the sick leave liability. The sick leave liability was required by KRS 61.456 beginning with the year ended June 30, 2011. Net Position for years prior to the year ended June 30, 2012 was decreased by $2,368,336 as a result of these entries and Change in Net Position for the year ended June 30, 2012 was decreased by $809,127 as a result of these entries.",
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"text": "We recommend the University implement internal control procedures which require general ledger accounts to be reconciled at least quarterly. Not having accurate transactions posted in a timely manner can affect the financial statement information that is available for making informed business decisions and supervision of operations. This weakness in accounting infrastructure increases the risk of errors in the financial records and is less likely to detect irregularities, including fraud, on a timely basis. The quarterly reconciliation process allows for the preparation of accurate quarterly financial statements. The reconciliations of significant accounts should be reviewed as part of the quarterly financial statement package in preparation for presentation of the financial statements to the Board of Regents. Management should then satisfy itself as to the nature of any unusual reconciling items before authorizing adjustments to correct the balances. These adjustments should be thoroughly documented and promptly made so that it will not be necessary to carry them forward to the next reconciliation.",
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"text": "Current Status:",
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"text": "Except as noted in 2014-001, this finding has been resolved in the current year.",
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"text": "60",
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"text": "KENTUCKY STATE UNIVERSITY\nSchedule of Prior Year Audit Findings, continued",
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"text": "Prompt, accurate reconciliations of the student, grant, and other accounts receivable subsidiary ledgers to the general ledger account balances should be prepared at least on a quarterly basis. Included in this reconciliation should be a review of the aging of the receivables and a calculation of the allowance that is based on University policy. This reconciliation and associated allowance calculation should be submitted for management's review and approval.",
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"text": "The University posted an adjusting journal entry to reconcile student and grant accounts receivable to the general ledger account balances and to increase the allowance for doubtful accounts subsequent to year end. Increased management effort in this area can result in a reduction in the number and amount of delinquent and potentially worthless receivables. The positive results from this process may include significantly improved cash flow and profitability and should minimize the need for a year-end adjustment of this account.",
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"text": "We recommend the University complete reconciliation's of the student, grant, and other accounts receivable subsidiary ledgers to the general ledger account balances at least on a quarterly basis and assess the collectability of all receivables, especially student receivables on a quarterly basis.",
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"text": "See finding 2014-001.",
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"text": "Page\n\nTransmittal Letter\n\nRisk Assessment\n\nOverview.....1-2\n\nTimeline.....3\n\nRisk Management Tolerance Model.....4\n\nRisk Assessment Matrix.....5\n\nStatus of 2012 – 2013 Recommendations Remediation .....6",
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"text": "To the Audit Committee of Kentucky State University",
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"text": "We are pleased to present an update of our risk assessment of the internal controls of Kentucky State University (the “University”). The purpose of our engagement is to assist you in the development of a risk assessment of University operations, to perform various internal audit services, and provide recommendations to strengthen controls and reduce the identified risks. This report was developed from inquiry of University faculty and staff, observations, inspection of various policies and procedures, and testing of the operating effectiveness of some controls. We plan to issue additional periodic reports throughout the course of the engagement, which will follow the proposed rotation plan for significant cycles as documented in the internal audit plan.",
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"text": "The importance of an adequate system of internal control is to promote effective and efficient operations so as to help the University carry out its mission; to provide reasonable, but not absolute, assurance that assets are safeguarded against inappropriate or unauthorized use; to promote the accuracy and reliability of accounting data and financial reporting to ensure transactions are executed in accordance with management's authorization and recorded properly in accounting records; to encourage adherence to management's policies and procedures for conducting programs and operations; and to ensure compliance with applicable laws and regulations. Furthermore, a successful system of internal control includes performing an annual assessment to identify potential weaknesses in policies and procedures and to implement corrective actions.",
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"text": "This report contains a summary of the status of our audit plan. Detail recommendations will be included in future updates as we complete our work.",
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"text": "Internal control testing was performed through tailored procedures designed based on our understanding of the University's relevant policies and procedures in effect.",
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"text": "The University’s risks are the risks that an action or event will adversely affect the University’s ability to successfully achieve its objectives. The Risk Assessment section of the report analyzes the significant risk findings that were identified during our assessment.",
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"text": "The accompanying comments are intended solely for the information and use of the Audit Committee, Board of Regents, department heads, and others within the University and should not be used for any other purpose.",
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"text": "We appreciate the opportunity to serve you and thank the employees of the University for their cooperation. We have already discussed many of these comments and suggestions with various University personnel, and we will be pleased to discuss them in further detail at your convenience. Through our ongoing involvement with you as a client and our knowledge of your processes, we would be pleased to perform any additional studies of these matters, or to assist you in implementing the recommendations.\nOctober 24, 2014",
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"text": "The University’s risks are the risks that an action or event will adversely affect its ability to successfully achieve its objectives. During our engagement we became aware of various sources of risk that impact the University. We evaluated these risks by using two distinct assessments of impact and likelihood. A simple rating scale has been developed for this purpose. The rating scale ranges from minor to significant impact, and low to high likelihood, using a 3-point scale.\nImpact refers to the extent of the consequences or implications if the risk does occur. To assess impact, we have determined how much of an impact the risk has if it does occur:\n■ A minor impact suggests that the risk would not have important implications on the University.\n■ A moderate impact suggests that the risk could have implications for the University’s ability to succeed.\n■ A significant impact suggests that the risk would have important implications on the University.\nLikelihood refers to the probability that the risk may occur given the current context of the University. To assess likelihood, we have determined how likely it is that the risk will occur in the future, given what is currently done to manage said risk:\n■ A low likelihood suggests that the risk is unlikely to occur, given its nature and current risk management practices in place.\n■ A medium likelihood of occurrence suggests that the risk has a moderate probability of occurrence.\n■ A high likelihood of occurrence suggests that the risk is likely to occur, despite the current risk management practices in place.\nThe Risk Management Tolerance Model and the Risk Assessment Matrix that follows summarizes these risks and assesses their impact and likelihood.",
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"text": "Cycles plotted in the red sections of the model are considered to be high risk and, as such, the related deficiencies should be given urgent attention in terms of priority. Cycles plotted in the yellow sections are considered to have moderate risk, are considered to be important, and should be given second priority after the high risk cycles. Cycles plotted in the green section of the model are considered least risky and remediation efforts to address deficiencies in these cycles would be expected to be addressed during routine operations of the University.",
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"text": "We noted a low overall risk in the Student Financial Aid cycle related to the areas of Reporting and Cash Management. The procedures implemented appear to be designed appropriately and are supported by written policies and procedures. Additionally, the personnel interviewed appear to be knowledgeable of the federal financial aid guidelines. Testing is to be performed in October which may affect the initial risk rating.",
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"text": "Due to turnover in the Finance and Business Department, there is a lack of knowledge regarding outstanding debt. Further, written policies and procedures do not exist to aid personnel. We noted a low overall risk in the debt cycle as outside parties manage outstanding debt resulting in the likelihood assessed as low; impact is considered moderate due to the large dollar amounts related to debt.",
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"text": "Currently there are few controls related to invoice review prior to the monthly payment. However, as there are few benefits or motivating factors for Xerox to inappropriately invoice the University and other controls exist such as individual copy codes, the likelihood is assessed as low. Further, the impact on the University is considered minor as the payment to Xerox is not considered material to the operations of the University.",
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"text": "The area of Information Technology, Payroll and Personnel, Grants, and Travel & Entertainment were rated based on prior audits; the risk rating on such areas may change based on the results of our 2014 – 2015 audit plan.",
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"text": "We will review prior findings with personnel that were reported throughout the 2012 – 2013 fiscal year to ensure procedures have been implemented to mitigate or resolve the associated risk. Upon meeting with personnel we will perform inquiry, observation, and if determined necessary, testing of the newly implemented procedures. The University will be made aware of unresolved or outstanding findings at future scheduled board meetings. Timing of the review is based upon the following estimated schedule:",
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