KENTUCKY STATE UNIVERSITY BOARD OF REGENTS
FISCAL IMPLICATIONS: The University is currently under Heighten Cash Management 1 (HCM1) with the U.S. Department of Education. If the University does not issue its Audit Report by June 1, 2021, the University risks being move to a designation of HMC2. The implications of these designations are as follows:
Heightened Cash Monitoring 1 (HCM1): After a school makes disbursements to eligible students from institutional funds and submits disbursement records to the Common Origination and Disbursement (COD) System, it draws down FSA funds to cover those disbursements in the same way as a school on the Advance Payment Method.
Heightened Cash Monitoring 2 (HCM2): A school placed on HCM2 no longer receives funds under the Advance Payment Method. After a school on HCM2 makes disbursements to students from its own institutional funds, a Reimbursement Payment Request must be submitted for those funds to the Department.
RECOMMENDATION: Kentucky State University Board of Regents approve the University’s plan to take all necessary steps to remove the Foundation’s designation as a component unit for audit purposes.
ATTACHMENTS: YES