As further evidence of the above, the State Budget Director has already issued a directive on April 29, 2020 for public colleges in the Commonwealth to return 1% of “each institution’s regular appropriation plus any performance fund distribution and the current year appropriation for KSU’s land grant match”. This actual twelve-month budget cut in the final two months of the current fiscal year highlights the tremendous financial constraints our campus can anticipate in the months and years to come. Even more, there is growing nationwide uncertainty about the nature and volume of fall higher education enrollments given the absence of a proven treatment or vaccine for COVID-19 and the increasing rate of unemployment and furloughs among parents and guardians of college-aspiring students.
Kentucky State University has engaged in internal and nondisruptive cost containment measures to address the unprecedented financial impacts of the COVID-19. With focus and diligence, management has frozen targeted vacancies, halted travel, renegotiated existing contracts, and eliminated personal service agreements. These efforts have mitigated a large brunt of the potential FY2020 average. Some examples of campus management actions include:
While campus management has reduced the potential fiscal year short-fall arising from the impacts of COVID-19 on operating revenues to a substantial degree, there is more fiscal attention needed to close the current fiscal year and plan for FY2021. Kentucky State University still needs to identify an additional $1,342,822 before the close of the current year to maintain compliance with the Commonwealth's HB-303 passed in 2016, Southern Association of Colleges and Schools Commission on Colleges accreditation standards, and the charge from the Board of Regents at the March 2020 quarterly meeting to be certain to end the year with a positive balance. It is not practicable to fully absorb the projected loss of revenue and unbudgeted expenses without eliminating duplicative staffing services and reducing administrative costs. The strategic realignment of remaining personnel can lead to improved institutional effectiveness, better customer service, and enhanced transparency and accountability across the campus.
Kentucky State University believes it is necessary to immediately reduce the annual campus management budget by $2,320,355. The result will be no less than $290,044 in current year fiscal savings. This reduction is permanent and will carry-forward into FY2020-21. It is possible to achieve these savings through a reduction in force, employee realignment, and cessation of duties. This action is prudent and achieves the fiduciary duty the institution owes to the Commonwealth of Kentucky and our stakeholders. Immediate action to realign the workplace allows the campus to adjust to our new realities and advance our historic mission.