Consistent state funding is critical to the long term stability of Kentucky State University. The campus has suffered annual decreases in state appropriations resulting from the onboarding of a new performance funding stratagem. It is imperative that the institution builds on a firm revenue base while aligning expenditures with ongoing revenue.
Kentucky State University again received an unmodified opinion which is the highest level of assurance our external audit firm can provide. The audit resolved six audit findings from prior years. Although the audit capture cash-flow on June 30, Kentucky State University had receivable claims on cash of $4,456,000 for expenditures incurred to be reimbursed by the Federal Government. Despite the timing issue on cash deposits, the institution exceeded the Composite Financial Index as required by the HB303 Management and Improvement Plan.
The primary metric to evaluate the financial stability of the University is the change in unrestricted net assets each year and the reason for any change. Any use of unrestricted net assets (fund balance) should be a planned investment in the future of the University, fund balances cannot be used to support ongoing operations. Kentucky State University has not used our fund balance for ongoing operations.
14.