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Figure 6: KSU Debt Trend between July 20, 2020, and June 18, 2021 (part of FY 2021)
Source: APA, based on KSU internal accounts payable reports, Line of Credit Reports, and OSBD email.
As identified in Figure 6:
The green line represents KSU's outstanding accounts payable balance throughout most of FY 2021. Though incomplete, KSU's average accounts payable for FY 2021 was over $3 million, with the highest balance reaching almost $5.3 million in November 2020.
The blue line reflects the nearly $4.3 million KSU owed to the State for an outstanding balance on a capital project throughout the year. On June 17, 2021, the former Director of Capital Planning and Facilities Management advised the former Controller and former EVP for Finance that the Office of State Budget Director (OSBD) would not approve any additional advances or cash overrides until the reimbursements were resolved. At that time, KSU owed a total of over $5 million to the state for advanced funding received for capital projects.
The purple line represents use of KSU's $5 million Line of Credit with Fifth Third Bank. As shown in Figure 6, KSU carried $2.9 million on its outstanding FY 2020 line of credit over into the new fiscal year (FY 2021). This outstanding balance cost KSU an additional $8,885 in past due interest and was not settled until October 2020. By December 4, 2020, KSU had fully drawn $5 million from the FY 2021 line of credit and carried it as an outstanding debt into FY 2022.
The red line represents a total amount owed by KSU throughout the year.
Given these facts, it is unclear how it was determined by KSU’s former EVP for Finance that “KSU is on track to end the fiscal year in the black,” which he reported to the Board’s Finance and Administration Committee during its June 3, 2021, meeting. On August 18, 2021, CPE reported to KSU’s Board a total of over $15 million of prior year expenditures were carried forward into FY 2022. It is unclear how the former EVP for Finance determined KSU was on track to end FY 2021 in the black with over $15 million in prior year expenditures carried forward into FY 2022.
It is unclear how the former EVP for Finance determined KSU was on track to end FY 2021 in the black with over $15 million in prior year expenditures carried forward into FY 2022.
See Finding 11 for further discussion regarding the former EVP for Finance’s reporting of outstanding accounts payable to the former President and former Board Chair in December 2020.