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Kentucky State University Board of Regents Meeting

Finance Committee

October 24, 2014

Regent LaVaughn Henry, Chairperson Regent David Guarnieri Regent Syamala Reddy Regent Charles Whitehead Regent Elaine Farris Ms. Deborah Martin, Staff

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance Committee October 24, 2014 10:15 am to 11:00 am Board Room – Academic Services Building Frankfort, Kentucky

MEETING INDEX

Section Page B1 Minutes of July 25, 2014 B2 Executive Summary B3 Budget vs. Actual B4 Human Resource Services Report B5 Council on Postsecondary Education (CPE) – Funding Model Update

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance Committee October 24, 2014 10:15 am to 11:00 am Board Room – Academic Services Building Frankfort, Kentucky

AGENDA

• I.Call to Order Regent LaVaughn Henry, Chairperson
• II.Roll Call
• Ms. Deborah Martin, Interim Vice
• Ms. Deborah Martin, Interim Vice President for Finance
• III.Opening Remarks
• Regent Henry
• IV.Approval of Minutes
• Regent Henry
• V.Executive Summary Report Ms. Martin
• VI Informational Items:
• Ms. Martin
• Budget vs. Actual
• Unaudited Comparative Financial Statements
• Human Resource Services Report
• CPE Funding Model Update
• VII.Discussion
• Ms. Martin
• VIII.Adjournment

B1

Agenda Item Background

Background:

The minutes of the Finance Committee meeting for July 25, 2014 require approval in order to become an official part of the committee records.

Recommendation:

It is recommended that the Finance Committee approve the minutes of the July 25, 2014 meeting.

Regular Meeting of the Board of Regents Finance Committee July 25, 2014 10:00 am to 10:45 am Board Room – Academic Services Building Frankfort, Kentucky

MINUTES

Regent LaVaughn Henry, Chairperson called the Finance Committee meeting of the Kentucky State University Board of Regents to order at 10:00 a.m. on July 25, 2014. Regent Henry asked the secretary to call roll:

LaVaughn Henry Syamala Reddy Charles Whitehead Present

David Guarnieri

Not Present

A quorum was declared.

I. Approval of Minutes

Action: Motion to approve the minutes from the April 25, 2014 Finance Committee meeting was made by Regent Whitehead and seconded by Regent Henry. The minutes stand approved as presented.

Regent Henry recognized Vice President Lockridge to carry the discussion forward.

II. Vice President's Report

Executive Summary Narrative

Vice President Lockridge gave an overview of the Executive Summary. Ms. Lockridge noted that for the eleven months ending May 2014 the bottom line was $4.7 million dollars positive. She cautioned that the University will not end the year in a positive as projected. Regent Henry inquired of the estimated amount of the negative. Vice President Lockridge stated that staff were estimating approximately two million dollars. She also stated that there were some expenditures that weren't anticipated at the end of the year, the majority were contractual allowances.

Audit

Vice President Lockridge stated that the week of July 14th the auditors were on campus for revenue testing and to start some of their preliminary work and will return the weeks of August 18th and 25th

to complete the audit procedures. The audit report is due to the Finance Administration Cabinet by October 3rd.

Budget

Vice President Lockridge stated that the University has transitioned for this upcoming budget year to a per credit hour price structure and that any student taking between 12-18 hours will be charged a flat rate. This proposal was presented to the Council on Postsecondary Education at their June 20th meeting and approved. Vice President Lockridge stated that most of the operating budgets have been loaded into Banner. She stated that only 50% of the budget for the year was loaded and they will be monitoring performance and results.

Kentucky Council on Postsecondary Education

Vice President Lockridge informed the committee that the Kentucky Council on Postsecondary Education has begun to have meetings to work on a model of how appropriations will be allocated in the next biennium budget. She stated that President Burse is part of that discussion on a different level and she and Mr. Mason have attended meetings. Vice President Lockridge stated that the guiding principles will be developed by April, 2015.

Insurance Renewal

The renewal of the University's insurance was completed with an effective date of July 1, 2014. Ms. Lockridge stated that the University has changed its Workers Compensation carrier from Brickstreet to Kemi due to Brickstreet's 50% price increase.

New Student Orientation

Vice President Lockridge stated that the Bursar's Office participated in the New Student Orientations that were held June 20th and July 18th. The Bursar's Office will present Understanding Your Wired Account and Student Payment Plans at the next orientation scheduled for August 14th.

Vice President Lockridge gave an overview of the Bursar's Office presentation for New Student Orientation, Understanding Your Wired Account and Student Payment Options. She stated that on July 18th personal letters were sent to students' home addresses and also e-mail addresses informing them of their account balances, instructions on how to access their wired accounts, the different forms of payment plans and a letter from President Burse. Ms. Lockridge noted that beginning this semester new and returning students with a zero balance are required to pay 50% of their current charges by August 22nd and the remaining balance is due by the end of the term. She stated that returning students with a prior balance are required to pay 50% of their current charges by August 22 and the remaining balance for the current term and prior term must be paid within twelve months. She stated that the KSU Payment Installment Option is available to all students.

Staffing

Vice President Lockridge introduced Ms. Latrina Sweatt, as the Grant Accountant in Finance Administration. She stated that Ms. Sweatt will be responsible for Title III.

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III. Adjournment

Motion for adjournment of the Finance Committee's July 25 2014 meeting was made by Regent Whitehead and seconded by Regent Henry. The meeting adjourned at 10:35 a.m.

2023

B2

Agenda Item Background

Background:

Please see attached.

Recommendation:

Informational Item

KENTUCKY STATE UNIVERSITY BOARD OF REGENTS

Report to the

Finance Committee

Deborah Martin

Interim Vice President for Finance

October 24, 2014

Fiscal 2014 Budget vs. Actual and Financial Statements (unaudited)

For Fiscal 2015, planned budget results and unaudited comparative financials are presented in item B3 as of September 30, 2014.

Audit Update

Dean|Dorton|Allen|Ford has completed the work on KSU's annual audited financial statements. KSU submitted to the Finance & Administration Cabinet Office of the Controller the completed audit reports and closing package on October 15th.

Budget Reforecast for FY 14-15

The Financial Plan for FY 14-15 was approved at a meeting of the Board of Regents (BOR) on June 4, 2014. Because of a realized reduction in revenue due to lower enrollment, the budget department is analyzing the impact on the University and is working on a reforecast of expenditures. The Cabinet is discussing and entertaining all savings opportunities.

Enrolled Students

Beginning in Fall 2014, new and returning students were required (at a minimum) to pay 50% of their Fall 2014 tuition/fees and to sign up for a four (4) or twelve (12) month Payment Installment Option (PIO), depending on whether they did not or did have a prior balance, respectively. Payments are due on the 30th of each month. Students who did not make a payment on September 30th, or who had a payment returned by the bank, were contacted by email and phone by October 8th. As of October 6, 2014, the following had occurred in regards to returned/non-payments for students on payment plans:

Payments returned by the bank – 30 students, total student account balance $202,547 No payment received for PIO – 99 students, total student account balance $418,492

Homecoming

The Student Billing and Collection Office participated in Homecoming events that took place the week of October 13th.

Other Items

Refer to the Human Resources Update contained within.

B3

Agenda Item Background

Background: See the following pages.

Informational Item

t

12

1

Kentucky State University Budget vs. Actual Three months ending September 30, 2014 (Amounts shown in dollars)

Kentucky State University

Statement of Net Position

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Kentucky State University Statement of Revenues, Expenses and Changes in Net Position (By Function) Periods Ending September 30, 2014 and 2013

(Unaudited)

1

Kentucky State University Statement of Revenues, Expenses and Changes in Net Position (By Function) Periods Ending September 30, 2014 and 2013

(Unaudited)

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Kentucky State University Statement of Cash Flows Periods Ending September 30, 2014 and 2013 (Unaudited)

Kentucky State University Statement of Cash Flows

Periods Ending September 30, 2014 and 2013

(Unaudited)

B4

Agenda Item Background

Background:

Human Resource Services has initiated and continued several significant projects for the University as described below.

Recommendation:

1. The faculty and staff Classification and Compensation systems review project (C&C) is proceeding. All completed position description questionnaires (PDQ) have been provided to the project consultant, Dr. James Fox, of Fox Lawson & Associates. Via a Kentucky State University subscription, access to a customizable salary survey database of the College and University Professional Association for Human Resources (CUPA-HR) has also been provided to the consultant. Consultant interviews with selected staff members have also been scheduled. The consultant reports that the project is on schedule for completion in June 2015.
2. The University's annual benefits open enrollment period was successfully completed.
3. Human Resources is a member of the Banner Steering Committee which will be actively involved in the Banner Revitalization Project.
4. Human Resources is involved in the review and consideration of various cost savings approaches.
5. Human Resources is an active participant in the implementation of training needed to be in compliance with the Campus Accountability and Safety Act.

Informational Item

B5

Council on Postsecondary Education (CPE) Funding Model Update

Resolution Adopted at CPE's November 7, 2013 Meeting

The Council on Postsecondary Education expresses its unqualified support for the 2014-2016 Postsecondary Education Budget Recommendation and particularly the development of funding requests for strategic investments in addition to the traditional base funding.

The Council hereby resolves that, as a result of budget deliberations over the past year, it is evident that there is a need for the development of a comprehensive funding model that aligns the Commonwealth's investment in postsecondary education with the Commonwealth's postsecondary education policy objectives. As such, the Council president is hereby directed to establish a working group that, at minimum, includes leadership of each of the public universities and KCTCS and members of this Council, for the purpose of developing a comprehensive model for the allocation of state General Fund appropriations for institutional operations that incorporates elements of campus performance, mission, and enrollment, as well as any other components as determined through the process. The new model shall be developed for implementation in the 2016-2018 biennial budget recommendation.

Make up of Committee

The Funding Model Steering Committee is comprised of fifteen (15) members: CPE Chair, CPE President, three (3) CPE members, nine (9) institutional presidents, and one (1) Governor's office representative. The committee shall establish the basic principles under which the new funding model approach is to be developed and provide guidance and clarification regarding those principles.

Actions to Date of Committee

Working on a set of Goals and Guiding Principles that may address:

○ Mission Sensitivity;

o Outcomes;

Completion Driven Metrics:

○ Easy communication and explanation of funding model;

○ Sustainable – Model will be able to adapt to all funding scenarios;

o Reasonable Stable – Model will not produce drastic changes in funding from year to year;

o Flexible – Model will be able to address unique situations that may arise;

o Allow Appropriate Exclusions – The KSU Land Grant state match allocation would be an example; and

o Efficient

Other State Funding Models that have been reviewed.

o Ohio

o Tennessee

o Indiana

O Mississippi

o Past Kentucky Funding Models

o KSCTS Funding Model – Distribution to the System’s Community Colleges • Decision Points under discussion.

o Redistribution of University's Base (current year) Budget – State Appropriation;

○ Performance Funding – From additional state appropriations only;

○ What model to use – Mississippi, Tennessee, hybrid Mississippi Model;

Sector Differentiation and how they are divided/funded – Research Institutions (UK and UL) – Comprehensivees (Regional Universities) – KSU in sector by itself – KCTCS;

o Performance funding indicators – Degree Production, Persistence, STEM, etc.;

Weighting – Resident vs. Non Resident – Pell eligible and minority students, etc.;

o Timetable to completion of model – January, 2015 – April, 2015; and

o Utilization of Model not only for additional state appropriations but also for budget reductions.