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placing its endowed funds at further risk to be used in a manner contrary to donor restrictions.

In June 2020, after learning of KSU’s draw of over $956,000 from its internal endowed funds from earlier that year, the Board requested the former President provide details of how the funds were spent. In response, the former President provided the Board with a chart describing KSU’s academic scholarship program, a summary of total institutional scholarships paid in FY 2020, and a report of scholarships paid by student ID number. However, University accounting records evidence that KSU did not apply these funds to scholarships. Additionally, endowment schedules show less than half of the funds would be potentially eligible to be applied to student scholarships, as over half of the internal endowed funds are to be used for other purposes related to endowed chairs, professors, IT, and KSU’s library.

Ultimately, University bank records show all three draws from internal endowed funds were deposited into KSU's general bank account and at least a portion of the funds were transferred to KSU's vendor account from which KSU general operational expenses were paid.

As noted previously, KSU’s 2018 Endowment Spending Policy identifies specific endowment reports that will be made, including: (1) a full endowment report, as required by CPE, and (2) annual reports to donors notifying them of the disposition of endowment income. Though KSU drew nearly $2.7 million from the endowment between FY 2019 and FY 2021, no reporting has been made as indicated by the policy.

In an interview with KSU’s Director of Institutional Advancement, he expressed that he was excited when he first saw the annual donor reporting requirement within the 2018 Endowment Spending Policy. However, he never received any details on the spending of the funds and, as such, he was not able to share details with donors as indicated by the 2018 policy.

Finally, CPE representatives confirmed KSU has not submitted “a full endowment report” as is required by the Endowment Match Program over the last couple of years. They noted all universities are required to submit reports detailing the fiscal year activity and the impact that it has had on their endowment matched by the State.

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