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REPORT TO THE BOARD OF REGENTS

January 22 and 23, 2015

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KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents 9:00 a.m., Friday, January 23, 2015 Julian M. Carroll Academic Services Building, Board Room Frankfort, Kentucky Regent Karen W. Bearden, Presiding

AGENDA

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• I.CALL TO ORDER:
• Regent Karen Bearden, Chair
• II.ROLL CALL:
• Lori Davis, Secretary
• III.OPENING REMARKS: Regent Bearden
• IV.APPROVAL OF MINUTES: Action Item: Approval of Minutes from the November 7, 2014 Special Board Meeting
• V.BOARD BYLAWS: Action Item: Approval of Amended Bylaws of the Board of Regents
• VI.COMMITTEES REPORTS:
• A.Academic Affairs Committee:
• A.Academic Affairs Committee:

Academic Affairs Update

B. Finance / Audit Committees:

Action Item: Approval of the A-133 Audit Report Action Item: Approval of Student Fees-ESL Program Information Item: Department of Athletics Update Harry Stinson, Athletic Director Stephen Mason, Chief of Staff

Regent Bearden

Beverly Downing Interim Vice President for Academic Affairs

Regent LaVaughn Henry, Chair Regent Mindy Barfield, Chair

Harry Stinson, Athletic Director Stephen Mason, Chief of Staff

C. Student Affairs Committee:

Regent Ekumene Lysonge, Chair

Student Affairs Update

Vernell Bennett Vice President for Student Affairs

• D.D. External Relations and Development Committee: Regent Charles Whitehead, Chair

External Relations and Development Update Max Maxwell Interim Vice President for External Relations and Development

Regent Charles Whitehead, Chair

Max Maxwell Interim Vice President for External Relations and Development

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• VII.TECHNOLOGY REPORT Wendy Dixie Acting Chief Information Officer Action Item: Approval of Contract with Oracle and Addvantum
• VIII.UPDATE TO SPECIAL EXTERNAL-INTERNAL AUDIT REPORT Melinda Impellizzeri Special Assistant to the President
• IX.KSU FM RADIO LICENSE PROCESS Lori Davis General Counsel
• X.The quick brown fox jumps over the lazy dog.
• X.PRESIDENT'S REPORT:
• President Raymond M. Burse
• A.Action Item: Approval of Revised Organizational Structure
• B.Action Item: Approval of Appointment of Dr. Vernell Bennett as Vice President for Student Affairs
• C.Action Item: Amendment of Post-Tenure Review Policy
• D.Action Item: Amendment of Financial Exigency Policy
• XI.CLOSED SESSION:
• A.Pending Litigation (KRS 61.810 (1)(c))
• B.Individual Personnel Matters (KRS 61.810 (1)(f))
• C.Property Acquisition (KRS 61.810 (1)(b))
• XII.OPEN SESSION: Regent Bearden Action Item: Ratification and Approval of the President's Amended Contract
• XIII.CLOSING REMARKS
• XIV.ADJOURNMENT

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Regent Bearden

KENTUCKY STATE UNIVERSITY Board of Regents Special Meeting 9:00 a.m., November 7, 2014 Julian M. Carroll Academic Services Building Board Room Frankfort, Kentucky Regent Karen W. Bearden, Presiding

MINUTES

I. Call to Order:

Chairperson Karen Bearden welcomed attendees to the Special Meeting of the Kentucky State University Board of Regents and called the meeting to order at 9:00 a.m. on November 7, 2014.

II. Roll Call:

Chairperson Bearden asked the Secretary to the Board to conduct the roll call:

Regent Barfield, Present

Regent Bearden, Present

Regent Farris, Present

Regent Guarnieri, Present

Regent Haskins, Present

Regent Henry, Absent

Regent Lysonge, Present after Roll Call

Regent McFayden, Present

Regent Reddy, Present after Roll Call

Regent Smith, Present after Roll Call

Regent Whitehead, Present

Ten Regents were in attendance. A quorum was declared at 9:00 a.m.

III. Opening Remarks:

Chair Bearden began the meeting by welcoming the attendees to the meeting.

IV. Approval of Minutes:

Action: Motion was made to approve the minutes from the July 24, 2014 Bylaws Committee, the July 24, 2014 Executive Committee and the October 24, 2014 Regular Board Meeting by Regent McFayden and seconded by Regent Whitehead. The motion passed unanimously.

V. Board Statement on Policies:

President Burse presented his recommendation that all future changes to the policies of the University be amended only through approval of the Board of Regents. This statement further recommended that the Board rescind its April 25, 2003 action which separated the Faculty Handbook into administrative regulations, which did not require Board approval for amendments.

All policies of the Board will be reviewed and centralized in one location on the KSU website.

Action: Motion was made by Regent Whitehead to require Board approval for any proposed amendments to all University policies, including but not limited to, the Faculty Handbook, the Human Resources Manual and the Student Handbook. The motion was seconded by Regent Farris. The motion passed 8-1. Regent McFayden voted against the motion.

VI. Academic Program Approval:

Dr. Beverly Downing, Interim Vice President of Academic Affairs discussed a proposal for the approval of the Bachelor of Science in Nursing (BSN) program. Dr. Downing explained that there is a national movement away from the two (2) year Associate's Degree in Nursing (ADN) program, since hospitals are seeking nurses with higher degrees.

KSU is having difficulty locating clinical experiences for ADN students as part of the students' education. Dr. Indira Tyler, Interim Chair of the KSU School of Nursing, further explained that hospitals are increasingly seeking “magnet” status of excellence which requires their nurses to be trained at the BSN level.

If approval to begin a BSN is granted, KSU would begin a “teach-out” phase of the ADN program for those students currently in the program pipeline while simultaneously “starting-up” the BSN program. Students who are in the ADN program would be on-track to complete the lower level liberal studies requirements in the BSN program. Once the BSN program is fully approved, current and prospective students will be advised of the program change and advised appropriately.

KSU will be unable to conduct both programs (BSN and ADN) simultaneously as there would be an increased need for more faculty and added difficulty to provide the ADN students the clinical experiences required.

Action: Motion was made by Regent Whitehead to approve the pre-licensure Bachelor of Science in Nursing (BSN) program. The motion was seconded by Regent Haskins. The motion passed unanimously.

VII. ENROLLMENT UPDATE:

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Carmella Conner, Acting Vice President of Student Affairs addressed the Board. She advised the Board that the current enrollment was 1869. This number was disaggregated by categories in the board materials.

The process for student withdrawal from the university was discussed. Students are required to complete a withdrawal form and specifically state why s/he seeks to withdraw from the university and obtain signatures from their academic dean. Students are also advised to speak with an advisor in the Academic Center for Excellence, Academic Advising, and/or Student Support Services if the reasons for withdrawal are academic in nature.

Early intervention strategies were discussed. The Office of Academic Affairs has worked to implement “Course Signals” to assist in identifying students who are in academic jeopardy before withdrawal is contemplated. Full implementation of Course Signals is expected by the beginning of Spring 2015.

Ms. Conner also discussed the November 1, 2014 Open House for prospective students. Over 785 prospective students were in attendance. A committee will review areas of improvement needed in preparation for the Spring Open House. In particular, some attendees commented that they’d like to have heard more presentations from the individual major areas of study. The Admissions Office will continue to follow-up with attendees as a part of the recruitment process.

Ms. Conner stated that the goal of the Open House was to invite 1000 prospective students to showcase the University. The Board requested that in the future each recruitment activity has stated goals and metrics.

Ms. Conner discussed the faculty's role in recruitment. She explained that she would like to see faculty participate as members of recruitment committee. Ms. Conner also explained that she and Dr. Downing are actively collaborating to increase University recruitment efforts.

President Burse further clarified his expectations of the faculty in the recruitment of prospective students. For example, he would expect that when a prospective student contacts the Office of Admissions and indicates a major area of study of interest, the Admissions Office would contact faculty in that area to outreach to the student within twenty-four (24) hours.

He expects active engagement from the faculty and every staff person on campus. Faculty members should have positive comments to say about Kentucky State when engaging with prospective students.

VIII. SPECIAL EXTERNAL-INTERNAL AUDIT REPORT:

Ms. Melinda Impellizeri, Special Assistant to the President for Strategic Planning and Development, presented a report based upon findings from KSU's external-internal auditor, Tronconi and Associates.

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The report outlined Tronconi’s unannounced audit findings. The files of ten students were randomly audited to determine how the University’s processes flow. Categories of review included: 1) Application Process; 2) Student Contact Information; 3) Bursar’s Office—Student Finance and Collection; 4) Student Housing; 5) Student Immunization; 6) Academic Advising; 7) Miscellaneous Student information; and 8) Student Attendance and Timely Graduation.

The report found numerous of areas of improvement required to ensure that University processes flowed properly. Suggestions for process improvement included the following:

1. Creation of a documented online repository of all processes.
2. Selection of representatives from impacted areas to form a Process and Guidelines Excellence Team.
3. Collection, inspection and where necessary, revision of University processes.
4. Create “standard work” process documentation for posting in each area.
5. Development of training and require regular and remedial training for all employees and faculty.
6. Implementation of a Scorecard process.
7. Measurement of employee compliance and tie to performance evaluations.

President Burse commented that changes have been or will be implemented to fix the areas identified. Further, President Burse conveyed the sense of urgency that exists to improve in all areas.

IX. UNIVERSITY BUDGET REDUCTION AND REORGANIZATION PLAN:

President Burse presented his recommended budget reduction and reorganization plan. A written report was provided to Board Members. The recommendations include:

1. State Government Employee Tuition Reduction (25%) Plan: State government employees can take classes at KSU with a twenty-five percent (25%) tuition discount.
2. Contract and Vendor Payments: Will be reviewed to determine whether cost-savings can be realized.
3. External Relations and Development: Seven positions will be abolished as duplicative or not necessary to the operations.
4. Institutional Research: Will now report to the Office of the President.
5. Retirement Incentives: Employees with the ability to retire will be offered an incentive. Incentive Pool is budgeted at approximately $250,000.
6. Information Technology: a new position of switchboard operator will be added. Restructuring of the area will also be completed.

7. Student Success and Enrollment Management: Rename section to Student Affairs; eliminate the Office of Enrollment Services (2 positions eliminated)
8. Student Life and Activities: Office will be re-evaluated.
9. Academic Affairs:
10. a.Provost position will become Vice President of Academic Affairs and Dean of the University.
11. b.All faculty contracts will be nine (9) months.
12. c.Eliminate the dean positions.
13. d.Eliminate all adjunct positions. Adjuncts will be hired as necessary.
10. Athletics: Reduce spending by $500,000 over the next 18 months.
11. Finance: Eliminate one (1) position; bring Internal Audit function in-house
12. President's Office: Create Facilities and Maintenance Operations; Create an Assistant for Security and Risk.
13. Elimination of Sick Leave Credit with KTRS
14. Suspend Tenure and Promotion Process for the 2014-15 year
15. Term Contracts: All term contracts will not be renewed at the end of their current terms. Tenure-track faculty will be issued notices of non-reappointment, with all tenure-track faculty to be assessed for retention based on fit and productivity during this period.
16. Post-Tenure Review Policy: Procedures for this policy will need to be developed.

Action: Motion was made by Regent Haskins to approve the University Budget Reduction and Reorganization Plan. The motion was seconded by Regent Farris. The motion passed 9-1. Regent McFayden voted against the motion.

X. CLOSED SESSION:

Action: Motion was made by Regent Whitehead to enter into closed session pursuant to KRS 61.810 to discuss pending litigation, individual personnel matters and property acquisition. The motion was seconded by Regent Barfield. The motion passed unanimously. The Board went into closed session at 11:12 a.m.

XI. OPEN SESSION:

The Board returned to Open Session at approximately 11:30 a.m. No action was taken by the Board in closed session.

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President Burse announced that KSU had submitted a grant application to NASA in which over 33 entities participated. This application is for the Center of Transforming Education in Science and Mathematics.

President Burse also updated the Board regarding activities of the Office of Sponsored Projects. KSU currently has $19 million dollars in active grants and the indirect cost recovery back to the university from these grants is $600,000.

President Burse also mentioned that KSU will partner with Fayette County Schools on closing the achievement gap and other activities that support academics at the secondary level.

VI. CLOSING REMARKS/ADJOURNMENT:

Action: Motion was made to adjourn the Board meeting by Regent Haskins and seconded by Regent Farris. The motion passed unanimously.

The meeting adjourned at 11:38 a.m.

Submitted by:

Lori A. Davis, Secretary General Counsel Kentucky State University

Karen W. Bearden, Chair Board of Regents Kentucky State University

___ Approved with no corrections

___ Approved with corrections

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Kentucky State University

The Gold Book: Bylaws of the Kentucky State University Board of Regents

Article I: Declaration

Section 1.1: The governance of Kentucky State University is vested in the Board of Regents of Kentucky State University. The Board in conformity with the State Constitution and State laws, shall have exclusive jurisdiction, power and authority with regard to the supervision, management and control of Kentucky State University, shall be the final authority in all matters pertaining to the University, and it shall exercise jurisdiction over the University's financial, educational, administrative and other policies, and its relations with state, local, and federal governments.

Section 1.2: The Board of Regents of Kentucky State University is a constituted entity of the Commonwealth of Kentucky.

Section 1.3: The Board shall constitute a body corporate, with the usual corporate powers, and with all immunities, rights, privileges and franchises usually accorded the governing bodies of educational institutions.

Article II:

Powers

Section 2: The Board of Regents, in governing the affairs of Kentucky State University, shall:

• (a)Appoint the President of the University, who shall serve at the pleasure of the Board on such terms as may be mutually agreeable to the Board and the President;
• (b)Review and evaluate, on an annual basis, the performance of the President of the University according to written objectives, specific and general, developed

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 1 of 15

by the President in conjunction with the Board as presented at the outset of each academic year;

• (c)Engage outside advisors and counsel, in its discretion, to assist the Board in carrying out its duties, including, but not limited to, the evaluation of the President;
• (d)Approve the employment of faculty members at the administrative level, and staff employees at the vice-president level and above, and fix their compensation and tenure of service, on recommendation of the President and prior to any offer of employment, except that the President may conditionally appoint these persons for a ninety day period until the next board meeting;
• (e)Approve all administrative employment contracts offered to University employees prior to execution by the parties;
• (f)Adopt guidelines for salary ranges and benefit guidelines for all faculty, administrative and University personnel;
• (g)Adopt the annual budget for the University and approve any material budget changes;
• (h)Approve tuition, fees and other charges;
• (i)Approve all loans, borrowing and issuance of bonds;
• (j)Approve, after consultation with the President, an administrative structure and plan of organization needed for the successful conduct of the University;
• (k)Act as a policy-making body by adopting policy statements of governance and operation of the University, in areas, including, but not limited to, human resources, information technology, public relations and development;
• (I)Entrust the internal administration of the University to the President in accordance with the duly established governing Board Policies and administrative regulations;
• (m)(m)Grant diplomas and confer degrees upon the recommendation of the President and faculty;

Bylaws Kentucky State University Board of Regents Effective Date: ___ Page 2 of 15

• (n)Periodically evaluate the University’s progress in implementing its mission, goals, and objectives to conform to the strategic agenda, and hold University officers and officials accountable for the status of the University’s progress;
• (o)Promulgate state financial management administrative regulations in accordance with KRS 164A.560, and delegate the responsibilities for these functions to the president of the University. These financial management functions include: acquisitions of funds, purchasing, and receiving, depositing, collecting, retaining, investing, disbursing and accounting for all funds received or due from any source;
• (p)Approve any appropriation, expenditure, disbursement or contract greater than $50,000, notwithstanding the provisions of KRS 164A.560 and 745 KAR 1:035;
• (q)Approve the Constitution and By-Laws of the Faculty Senate, the Staff Council, and the Student Government Association, except where in conflict with these Bylaws or with governing Board Policies;
• (r)Periodically review and/or approve University vision, mission, and proposed long-range strategic plans;
• (s)Become familiar with, committed to, and abide by, the major responsibilities of this governing board, as set out in these Bylaws and the Kentucky Revised Statutes, including:
• defining and clarifying the vision, mission and approving long-range plans; and
• assessing periodically the Board's performance and that of the President; and
• (t)Accept the spirit of academic freedom and collegial governance as fundamental characteristics of University governance.

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 3 of 15

Article III: Internal Governance

Section 3.1: The Board chairperson speaks for the Board. No other Board member, unless designated by the chairperson, has this prerogative and responsibility.

Section 3.2: The Board chairperson presents the Board's positions, interests, policies, plans, and decisions to the public, the media, and public officials.

Section 3.3: The Board’s authority and influence stems from its official standing as a full Board with its assigned duties and responsibilities. No individual member, other than the chairperson, has the authority to speak for the Board. No individual member has authority to take actions or make commitments for the Board. Only the collective Board has authority.

Section 3.4: All substantive issues, proposals, resolutions, plans, information, data, and inquiries come to, and from, the Board through the President of the institution.

Section 3.5: Board members confronted with a University problem or concern should report this matter to the President and to the Board chairperson. In the event the problem or concern relates to the Board chairperson, the matter should be reported to the Board vice chairperson. The chairperson or vice chairperson will direct whatever action is deemed necessary in consultation with the President, if necessary, or with University internal or external counsel. The appropriate Board Committee chairperson will also be involved in the process. Under no circumstances should a Board member individually address the situation.

Section 3.6: Board members should not attempt to persuade, direct, opinionate, coerce, threaten, or influence a University employee's position or practice.

Section 3.7: Board members should make every effort to attend special events and other activities which promote the University whenever feasible and as scheduling permits.

Section 3.8: The Board shall annually, at its retreat, develop goals and objectives for the upcoming year and evaluate its performance from the previous year. The Executive Committee shall be responsible to determine the procedure by which such evaluations are to be conducted, subject to Board approval.

Bylaws Kentucky State University Board of Regents Effective Date: ___ Page 4 of 15

Article IV: Membership and Appointment to the Board of Regents

Section 4.1: The Board of Regents shall consist of eleven persons as provided by State law; eight members appointed by the Governor of Kentucky, one faculty member elected by members of the faculty with academic rank above instructor, one student member elected by the student body, and one non-teaching personnel member elected by members of the staff.

Section 4.2: The gubernatorial appointments may include one (1) graduate of the respective institution who resides outside the Commonwealth. Not more than two (2) appointed members of any Board shall be residents of one (1) county. The appointments shall reflect the proportional representation of the two (2) leading political parties of the Commonwealth based on the state's voter registration. Membership on the Board shall reflect no less than proportional representation of the minority racial composition of the Commonwealth. Membership on the Board shall not be incompatible with any state office. A change in residency after the date of appointment shall not affect a member's ability to serve nor shall it prevent a member's eligibility for reappointment.

Section 4.3: Appointments to fill vacancies shall be made in the same manner and within the same time after the occurrence of the vacancy as regular appointments. The person appointed shall hold the position for the unexpired term only.

Section 4.4: The faculty member shall be a teaching or research member of the faculty of the rank of assistant professor or above. He/she shall be elected by secret ballot by all faculty members of the rank of assistant professor or above.

Section 4.5: The nonteaching personnel member shall be any full-time staff member excluding the president, vice presidents, academic deans, and academic department chairpersons. He/she shall represent all nonteaching University employees including, but not limited to, building facilities and clerical personnel. He/she shall be elected by secret ballot by the nonteaching employees.

Section 4.6: The student member on the Board shall be the president of the student body of the University during the appropriate academic year and may be an out-of-state resident, if applicable.

Section 4.7: All persons appointed shall be required to attend and complete an orientation program prescribed by the council under KRS 164.020 as a condition of their service.

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 5 of 15

Article V: Term of Office of Board of Regents Members

Section 5.1: Each member of the Board shall serve for the term for which he/she is appointed and until his successor is appointed and qualified.

Section 5.2: The terms of the appointed members of the Board of Regents shall be for six years and until their successors are appointed and qualified.

Section 5.3: The faculty member shall serve for a term of three years and until his/her successor is elected and qualified. The faculty member shall be eligible for reelection, but he/she shall not be eligible to continue to serve as a member of the Board if he/she ceases being a member of the teaching staff of the University. Elections to fill vacancies shall be for the unexpired term in the same manner as provided for the original election.

Section 5.4: The student member shall serve for a term of one year beginning with the first meeting of the fiscal year which contains that academic year. If the student member does not maintain his position as student body president or his status as a full-time student at any time during that academic year, a special election shall be held to select a full-time student member.

Section 5.5: The non-teaching personnel member shall serve for a term of three years and until his successor is elected and qualified. The nonteaching personnel member shall be eligible for reelection, but he/she shall not be eligible to continue to serve as a member of the Board if he/she ceases being an employee of the University. Elections to fill vacancies shall be for the unexpired term in the same manner as provided for the original election.

Section 5.6: Any member of the Board of Regents may be removed from office by an order of the Governor entered in the executive journal after being afforded a hearing with counsel before the Council on Postsecondary Education and a finding of fact by the Council. However, no member of the Board of Regents shall be removed by the Governor of the Commonwealth of Kentucky except for cause.

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 6 of 15

Article VI: Meetings of the Board of Regents

Section 6.1: The Board of Regents shall hold its first meeting within thirty days after each appointment of new members.

Section 6.2: Thereafter, the Board of Regents shall meet quarterly in regular session at the University or at such other times and places as agreed upon according to a calendar adopted annually by the Board. The annual meeting calendar shall include dates for the Board's annual retreat.

Section 6.3: The Chairperson of the Board shall call special meetings of the Board at the request of the President of the University or by two members of the Board. The Board may at such special meetings transact any or all business that it may transact at a regular meeting except that the business to be transacted at a special meeting shall be specified in the notice of the meeting in accordance with Kentucky's Open Meetings law.

Section 6.4: The Chairperson of the Board may call an emergency meeting pursuant to this provision of the Bylaws. For purposes herein, “emergency” is defined as a situation which creates or has the potential to create a threat to the health, well being, or safety of the University or the University community. The Board shall make a reasonable effort, under emergency circumstances, to notify the members of the Board, media organizations which have filed a written request for notification, and the public of the emergency meeting. At the beginning of the emergency meeting, the chairperson shall briefly describe for the record the emergency circumstances preventing compliance with the notice provisions under the Open Meetings law. These comments shall appear in the minutes. Discussions and action at the emergency meeting shall be limited to the emergency for which the meeting was called.

Section 6.5: Board members are expected to attend all Board meetings, commencement ceremonies, and participate in Board development activities. If a Board member is unable to physically attend a Board meeting, he/she may participate via any appropriate technology that allows the Board member to substantively participate via means that is consistent with the Open Meetings Act or any other applicable law.

Section 6.6: Members of the University community and members of the public are welcome to attend open meetings of the Board, but may not address the Board of Regents or otherwise participate in the meetings except pursuant to a previously approved

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 7 of 15

request for appearance to be heard in accordance with this paragraph. Persons desiring to be heard by the Board shall first submit to the President in writing the subject matter and the reason for desiring to be heard by the Board. The President shall then call the request to the attention of the Board Chairperson. The Chairperson may then determine whether or not to permit the person requesting appearance before the Board to speak, or the Board by a majority vote may grant such a request of the person requesting authority to speak. The Board shall be notified of all requests that are denied.

Section 6.7: The President of the University shall attend all meetings of the Board.

Section 6.8: A majority of the members of the Board shall constitute a quorum for the transaction of business.

Section 6.9: Meeting agendas of the Board shall be determined jointly by the President and the Board Chairperson, with essential materials provided to the Board members at least ten (10) calendar days in advance for regular meetings, and as soon as practicable for special meetings.

Section 6.10: Upon the concurrence of the Board Chairperson and the President, agenda items may be designated as consent agenda items in the agenda of a regular Board meeting. Unless any Board member objects to the inclusion of an item on the consent agenda by notifying the President at least forty-eight (48) hours before the Board meeting, all items designated as consent agenda items shall be recommended for approval by a single vote by the Board without discussion of individual items.

Section 6.11: All meetings shall be conducted in accordance with the principles of procedure prescribed in Roberts' Rules of Order, as most recently amended.

Article VII:

Officers of the Board of Regents

Section 7.1: The Board of Regents shall elect its Chairperson, Vice-Chairperson, and Secretary annually at the Board's first meeting.

Section 7.2: The Board shall appoint a Treasurer and the term of the Treasurer shall be at the pleasure of the Board.

Section 7.3: The Board shall appoint any such officers as it deems necessary, except no member of the Board shall be appointed Treasurer.

Bylaws

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 8 of 15

Article VIII: Duties of the Officers of the Board of Regents

Section 8.1: The Chairperson shall preside at the meetings of Board and shall be responsible for the management and orderly conduct of the business of the Board. The Chairperson shall issue calls to convene the Board in regular and special meetings. He/she shall determine the date, time and place of the Board meetings.

Section 8.2: The Vice-Chairperson shall, in the absence or disability of the Chairperson, perform the duties of the Chairperson of the Board.

Section 8.3: The Secretary shall keep and prepare all records, books and papers belonging to the Board. The Secretary shall prepare for and submit to Board members in advance an agenda of the business for discussion and decision by the Board. The Secretary shall record and keep on file accurate minutes and other documents of all Board deliberations and decisions. The Secretary shall submit the minutes of each Board meeting to members of the Board not more than thirty (30) days after each meeting, and shall ensure that the Board chairperson signs all approved minutes. The Secretary shall transmit all officially signed minutes to the University Archives in Blazer Library. Further, the Secretary shall prepare, under the direction of the Board, all reports and estimates, and shall execute all matters belonging to his office. The Secretary's compensation shall be fixed by the Board.

Section 8.4: The Treasurer shall be responsible for the management of the financial affairs of the Board and the University in accordance with accepted budgetary procedures and state law. He/she shall receive and disburse money under the control of the Board, and perform all acts that pertain to his office under the direction of the Board. He/she shall present at each regular meeting of the Board a statement of the financial status of the University.

Article IX: Committees of the Board of Regents

Bylaws

Kentucky State University Board of Regents Effective Date: ___ Page 9 of 15

Effective Date: ___ Page 9 of 15

Section 9.1: The standing committees of the Board of Regents shall be the Executive Committee, the Academic Affairs Committee, the Finance Committee, the Audit Committee, the Student Affairs Committee, and the External Relations and Development Committee. Members and chairpersons of the standing committees of the Board shall be selected by the chairperson of the Board of Regents. Other standing committees of the Board shall be determined by the Board with members appointed by the chairperson. Ad hoc committees may be created and members appointed by the chairperson.

Section 9.2: Committees shall possess no delegated authority of the Board of Regents unless approved by a majority vote of the Board or as allowed under these By-laws. All actions of each committee, unless taken with delegated authority, shall constitute recommendations to the Board and shall be subject to approval by a majority vote of the Board.

Section 9.3: All Committee members shall serve for a term of one year or until their successors have been duly selected by the Chairperson. In the event of a vacancy on a committee, the successor member shall be selected by the Chairperson of the Board of Regents and shall hold office for the balance of the term of office of the person vacating their office.

Section 9.4: The Executive Committee shall be composed of the officers of the Board of Regents, the standing committee chairpersons, and the past Board chairperson. The chairperson of the Executive Committee shall be the chairperson of the Board of Regents. The Executive Committee shall provide guidance to the President on matters that arise in the interim between regular meetings. The Executive Committee shall have the same powers as the Board of Regents during the interim between meetings of the board, except that it may not elect or dismiss a president of the University, create a new position in the University, abolish one already existing, nor adopt the annual budget for the University. The Executive Committee shall also serve as the Compensation Committee, and shall present recommendations concerning the President's compensation to the full Board for vote. The Executive Committee shall involve the entire Board in this evaluation process and shall also solicit input from university stakeholders. The Executive Committee shall be responsible for the planning of the Board's annual retreat. The Executive Committee shall submit to the Board of Regents for its ratification at the next full Board meeting a complete record of all actions taken by the Executive Committee. The Secretary of the Board of Regents shall attend all meetings of the Executive Committee and shall serve as its secretary.

Bylaws Kentucky State University Board of Regents Effective Date: ___ Page 10 of 15

Section 9.5: The Academic Affairs Committee shall be responsible for evaluating all recommendations coming to the Board of Regents affecting the academic and intellectual affairs of the University. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

Section 9.6: The Finance Committee shall review, evaluate, and provide guidance on financial issues, including the biennial budget requests submitted to governmental agencies, the annual operating budget of the University for each fiscal year, and all other financial, administrative, and budgetary matters. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

Section 9.7: The Audit Committee shall recommend to the Board of Regents the engagement of an external auditing firm. The Committee shall meet with the external auditor and receive and review the auditor's external reports and University comments for the annual audit. The Internal Auditor shall serve as administrative agent to the committee.

Section 9.8: The Student Affairs Committee shall review, evaluate, and provide guidance on all matters related to student life issues. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

Section 9.9: The External Relations and Development Committee shall review evaluate, and provide guidance on all matters related to fund-raising, development, public relations and alumni, including providing leadership for Board of Regents' fund-raising efforts. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

Article X:

The President of Kentucky State University

Section 10: The President of Kentucky State University reports to the Board of Regents and serves at its pleasure. The powers and duties of the President include the following:

• (a)To be the chief administrative and educational officer of the University and to perform such other powers as may be prescribed by the Board of Regents;
• (b)To make and provide interpretation and implementation of Board Policy, through the promulgation of administrative regulations, for all aspects of the

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academic and other functions of the University, coordinating it with whatever individual, groups, or organizations may be required;

• (c)To recommend major policies and other major actions to the Board of Regents for its final action and to be the official medium of communication between the Board of Regents and the various segments of the University and their official bodies;
• (d)To make final decisions for which he/she has received delegated responsibility over a wide range of activities from the Board of Regents; such actions are ordinarily taken after consultation with various concerned individuals, groups, or organizations;
• (e)To enforce the Board Policies, administrative regulations, and guidelines of the University;
• (f)To recommend to the Board the employment of administrative faculty and vice-president level and above staff;
• (g)To employ all other non-administrative faculty, and employees of the University whose compensation shall fall within the approved University Classification and Compensation System;
• (h)To recommend to the Board changes in administrative structure and organization of the University which enhance and align with its mission;
• (i)To recommend to the Board faculty tenure and administrative promotion decisions;
• (j)To prepare annual budgets after consultation with, and input from, the Board and others as appropriate, and to recommend all other budgets and any modifications of these budgets as needed to the Board;
• (k)To appoint University-wide committees;
• (I)To manage the University through officials that report to the Office of the President;
• (m)(m)To provide leadership in the development of academic instruction, research, and service programs by making initiatives to the Faculty Senate and to the

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faculties of academic units and their planning committees concerning changes in curriculum or academic policies which are the responsibility of the faculty;

• (n)To serve as an ex-officio member of all faculties and all faculty committees, to call and preside over the meeting of the University faculty and such advisory groups as the President chooses to appoint, and at his/her direction to call meetings of the faculties of the several colleges and schools of the University;
• (o)To be responsible for all University functions relating to student affairs and the life of students at the University, as well as intramural and extramural or intercollegiate athletics;
• (p)To be responsible for all aspects of the relations of the University to the community and for providing information about the activities of the University;
• (q)To be responsible for public relations;
• (r)To maintain continuing relations with governmental agencies at city, county, state, and federal levels as required by the mission of the University;
• (s)To be responsible for relations of the University with alumni;
• (t)To be responsible for raising funds from the federal government, state and local public sources, corporations, private individuals, foundations and other sources;
• (u)To supervise programs for constant maintenance and improvement of their quality, for effective service to students, for the adequacy of research, and for their accountability to the people of the Commonwealth, to the students, and to grantors or donors;
• (v)To be responsible for the University’s role in construction and renovation, in maintenance of buildings and grounds, in the acquisition of essential new facilities, equipment, and library materials, and in space allocation and utilization;
• (w)To prepare and submit to the Board of Regents an annual report on the work and general status of the University; and

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(x) To delegate as appropriate the responsibility for carrying out any of the above functions.

Article XI: Indemnification, Legal Defense of Board Members, Conflicts of Interest and Confidential Information

Section 11.1: It is the purpose of this article to provide that any member of the Board of Regents be afforded a legal defense and indemnification for any acts or actions taken in good faith and within the scope of his/her official duties while on the official business of the University.

Section 11.2: A conflict of interest occurs when any Board member has existing or potential interests that compete or could compete with the interests of the University or any directly affiliated organization, or which impairs or might reasonably impair such Board members' independent, unbiased judgment in the discharge of one's responsibility. Board members shall avoid entering into or maintaining any business or financial interests, transactions, acquisition or sale of property interest which are or may be in conflict with those of the University. Board members shall avoid any personal interest, direct or indirect, in any contract for the purchase of land, buildings, supplies, or services for the University. Board members shall not accept gifts or benefits from any person holding contracts for supplies or services to the University.

Section 11.3: Board members shall refrain from using, discussing or disseminating confidential information obtained in his or her official capacity as a Board member and through board discussions during closed sessions of the board in any manner and for any reason, including, but not limited to, using, disclosing or disseminating such information with the intent to obtain financial gain for self or any other person or any other business with which the Board member is associated.

Section 11.4: Whenever any conflict of interest appears to exist after taking the oath of office, the Board member shall immediately fully disclose that conflict to the Executive Committee and to the President of the University. In no event shall such disclosure be delayed longer than seventy-two (72) house prior to consideration of the matter by the Board.

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Article XII: Amendments

Section 12: These bylaws may be amended by the affirmative vote of a majority of the membership of the Board of Regents providing notice in writing of any proposed amendment is given to members at least 10 days prior to a meeting at which the amendment is to be discussed. The ten day notice provision may be waived upon a vote of the majority of the Board members.

HISTORY: Adopted March 3, 1983; Revised May 9, 1992; Revised November 16, 1992; Revised January 26, 1996; Revised January 24, 1997; Revised October 30, 1998; Revised February 5, 1999; Major Revision October 24, 2003; Revised November 5, 2004; Revised: ___

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Kentucky State University

KENTUCKY STATE UNIVERSITY

Board of Regents

The Gold Book: —Organization and Operation Bylaws of the Kentucky State University Board of Regents

Article I Declaration Article VII Officers

___

Article II Article VIII

Powers of Board Duties of Officers

of Regents

— or regents Article IX

Article III Committees

Internal Governance

Guiding Principles ___ Article X

Evaluation of Board Performance ___ The President

Conflict of Interest

___ Article XI

Article IV Indemnification

Membership and Appointment ___ and Legal Defense of

_Article_V_

Term of Office ___ Article XII

Board Members

Amendments

Article VI

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Meetings

Article I: Article I

Declaration:

Section 1.1: The governance of the affairs of Kentucky State University is vested-in the Board of Regents of Kentucky State University. The Board in conformity with the State Constitution and State laws, the Board of Regents shall have exclusive jurisdiction, power and authority with regard to the supervision, management and control of Kentucky State be the final authority in all matters pertaining to the University, shall be the final authority and in all matters pertaining to the University, and it shall exercise jurisdiction over the University's financial, educational, administrative and other policies, and its relations with state, local, and federal governments.

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Section 1.2: The Board of Regents of Kentucky State University is a constituted agency entity of the Commonwealth of Kentucky.

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Section 1.3: The Board shall constitute a body corporate, with the usual corporate powers, and with all immunities, rights, privileges and franchises usually accorded the governing bodies of educational institutions.

Article II:

Article II

Powers

Section 2.1: The Board of Regents, in governing the affairs of Kentucky State —University, shall:

1.(a) Section 2.2-A appoint the President of the University, who shall serve at the pleasure of the Board on such terms as may be mutually agreeable to the Board and the President;

1.

1.(b) Review and evaluate, on an annual basis, the performance of the President of the University according to written objectives, specific and general,

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• developed by the President in conjunction with the Board as presented at the outset of each academic year;
• 1-(c) Engage outside advisors and counsel, in its discretion, to assist the Board in carrying out its duties, including, but not limited to, the evaluation of the President and other staff at its discretion;
• 1.
• 1.
• 2.Section 2.3-Approve the employment of faculty members at the administrative level, and staff employees at the vice-president level and above, and fix their compensation and tenure of service, on recommendation of the President and prior to any offer of employment, except that the President may conditionally appoint these persons for a ninety day period until the next board meeting;
• (d)2.
• 2.
• 3-(e) Section 2.4-Approve all administrative employment contracts contracts offered to University yy employees prior to execution by the partie s; 3.
• (f)Adopt guidelines for salary ranges and benefit guidelines for all faculty, administrative and University personnel;
• 3.S.
• 3.
• 4.(g) Section 2.5-Aadopt the annual budget for the University and approve any material budget changes;
• 4. (h) Approve tuition, fees and other charges;
• Approve all loans, borrowing and issuance of bonds;
• (i)4.
• 4.

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• (i)Section 2.6 Approve, after consultation with the President, an administrative structure and plan of organization needed for the successful conduct of the University;
• 5.
• (k) Section 2.7 Aact as a policy--making body by adopting p Policy statements of governance and operation of the University, in areas, including, but not limited to, human resources, information technology, public relations and development;
• 6..
• 6.
• (I)Section 2.8-Entrust the internal administration of the University to the President in accordance with the duly established governing Board Policies and administrative regulations;
• 7..
• 7.
• (m) Section 2.9 Grant diplomas and confer degrees upon the recommendation of the President and faculty;
• 8...
• 8.
• (n)Section 2.10 Eevaluate Periodically evaluate the University's progress in implementing its mission, goals, and objectives to conform to the strategic agenda, and hold University officers and officials accountable for the status of the University's progress;
• 9.
• (o) Section 2.11 Ppromulgate state financial management administrative regulations in accordance with KRS 164A.560, and delegate the responsibilities for these functions to the president of the University. These financial management functions include: acquisitions of funds, purchasing, and receiving, depositing, collecting, retaining, investing, disbursing and accounting for all funds received or due from any source;
• 10..
• 10.

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• b.15. Section 2.16—A accept the spirit of academic freedom and shared-collegial governance as fundamental characteristics of University governance.
• (t)15.
• 15.
• 15.
• 15.

Article III:

Article III

Internal Governance:

A. Guiding Principles

1. Section 3.1: The Board chairperson speaks for the Board. No other Board member, unless designated by the chairperson, has this prerogative and responsibility.
1. 2. Section 3.2: The Board chairperson presents the Board's positions, interests, policies, plans, and decisions to the public, the media, and public officials.

2.

• 3.Section 3.32: The Board's authority and influence stems from its official standing as a full Board with its assigned duties and responsibilities. No individual member, other than the chairperson, has the authority to speak for the Board. No individual member has authority to take actions or make commitments for the Board. Only the collective Board has authority.
• 4. Section 3.43: All substantive issues, proposals, resolutions, plans, information, data, and inquiries come to, and from, the Board through the President of the institution.

4.

5. Section 3.54: Board members confronted with a University problem or concern should report this matter to the President and to the Board chairperson. In the event the
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problem or concern relates to the Board chairperson, the matter should be reported to the Board vice chairperson. The chairperson or vice chairperson will direct whatever action is deemed necessary in consultation with the President. If necessary, or with University internal or external counsel. The appropriate Board Committee chairperson will also be involved in the process. Under no circumstances should a Board member individually address the situation.

5.

6. Section 3.65: Board members should not attempt to persuade, direct, opinionate, coerce, threaten, or influence a University employee's position or practice.
6. 7. Section 3.76:-____Board members should make every effort to attend special events and other activities which promote the University whenever feasible and as scheduling permits.

Section 3.87: B. Evaluation of Board Performance:

The Board shall annually, at its retreat, develop goals and objectives for the upcoming year and evaluate its performance of from the previous year. The Executive Committee shall be responsible to determine the procedure by which such evaluations are to be conducted, subject to Board approval.

C. Conflict of Interest:

Section 3.8 A conflict of interest occurs when any Board member has existing or potential interests that compete or could compete with the interests of the University or any directly affiliated organization, or which impairs or might reasonably impair such Board members' independent, unbiased judgment in the discharge of one's responsibility. Board members shall avoid entering into or maintaining any business or financial interests, transactions, acquisition or sale of property interest which are or may be in conflict with those of the University. Board members shall avoid any personal interest, direct or indirect, in any contract for the purchase of land, buildings, supplies, or services for the University. Board members shall not accept gifts or benefits from any person holding contracts for supplies or services to the University.

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Section 3.9 Confidential Information: Board members shall refrain from using confidential information obtained as a Board member in any manner with intent to result in financial gain for self or any other person, or any other business with which the Board member is associated.

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Section 3.10 Whenever any conflict of interest appears to exist after taking the oath of office, the Board member shall immediately fully disclose that conflict to the Executive Committee and to the President of the University. In no event shall such disclosure be delayed longer than seventy-two (72) house prior to consideration of the matter by the Board.

Article IV:

Article IV

Membership of and Appointment to the Board of Regents:

Section 4.1: The The Board of Regents shall consist of eleven persons as provided by State law: eight members appointed by the Governor of Kentucky, one faculty member elected by members of the faculty with academic rank above instructor, one student member elected by the student body, and one non-teaching personnel member elected by members of the staff.

Section 4.2: The gubernatorial appointments may include one (1) graduate of the respective institution who resides outside the Commonwealth. Not more than two (2) appointed members of any Board shall be residents of one (1) county. The appointments shall reflect the proportional representation of the two (2) leading political parties of the Commonwealth based on the state's voter registration. Membership on the Board shall reflect no less than proportional representation of the minority racial composition of the Commonwealth. Membership on the Board shall not be incompatible with any state office. A change in residency after the date of appointment shall not affect a member's ability to serve nor shall it prevent a member's eligibility for reappointment.

Section 4.3: Appointments to fill vacancies shall be made in the same manner and within the same time after the occurrence of the vacancy as regular appointments. The person appointed shall hold the position for the unexpired term only.

Section 4.4: The faculty member shall be a teaching or research member of the faculty of the rank of assistant professor or above. He/she shall be elected by secret ballot by all faculty members of the rank of assistant professor or above.

Section 4.5: The nonteaching personnel member shall be any full-time staff member excluding the president, vice presidents, academic deans, and academic department

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chairpersons. He/she shall represent all nonteaching University employees including, but not limited to, building facilities and clerical personnel. He/she shall be elected by secret ballot by the nonteaching employees.

☀

Section 4.6: The student member on the Board shall be the president of the student body of the University during the appropriate academic year and may be an out-of-state resident, if applicable.

• Section 4.7: All persons appointed shall be required to attend and complete an orientation program prescribed by the council under KRS 164.020 as a condition of their service.

Article V:

Article V

Term of Office of Board of Regents Members

Section 5.1: The terms of the appointed members of the Board of Regents shall be for six years and until their successors are appointed and qualified.

☀

Section 5.12:1 Each member of the Board shall serve for the term for which he/she is appointed and until his successor is appointed and qualified.

Section 5.2: The terms of the appointed members of the Board of Regents shall be for six years and until their successors are appointed and qualified.

⚫

☀

Section 5.3:1 The faculty member shall serve for a term of three years and until his/her successor is elected and qualified. The faculty member shall be eligible for re-election, but he/she shall not be eligible to continue to serve as a member of the Board if he/she ceases being a member of the teaching staff of the University. Elections to fill vacancies shall be for the unexpired term in the same manner as provided for the original election.

Section 5.4:1 The student member shall serve for a term of one year beginning with the first meeting of the fiscal year which contains that academic year. If the student member does not maintain his position as student body president or his status as

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a full-time student at any time during that academic year, a special election shall be held to select a full-time student member.

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Section 5.5: 1-T The non-teaching personnel member shall serve for a term of three years and until his successor is elected and qualified. The nonteaching personnel member shall be eligible for reelection, but he/she shall not be eligible to continue to serve as a member of the Board if he/she ceases being an employee of the University. Elections to fill vacancies shall be for the unexpired term in the same manner as provided for the original election.

Section 5.6:1 Any member of the Board of Regents may be removed from office by an order of the Governor entered in the executive journal after being afforded a hearing with counsel before the Council on Postsecondary Education and a finding of fact by the Council. However, no member of the Board of Regents shall be removed by the Governor of the Commonwealth of Kentucky except for cause.

Article VI:

Meetings of the Board of Regents

Section 6.1: The Board of Regents shall hold its first meeting within thirty days after each appointment of new members.

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Section 6.2: Thereafter, the Board of Regents shall meet quarterly in regular session at the University or at such other times and places as agreed upon according to a calendar adopted annually by the Board. The annual meeting calendar shall include dates for the Board's annual retreat.

☀

Section 6.3: The Chairperson of the Board shall call special meetings of the Board at the request of the President of the University or by two members of the Board. The Board may at such special meetings transact any or all business that it may transact at a regular meeting except that the business to be transacted at a special

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meeting shall be specified in the notice of the meeting in accordance with Kentucky's Open Meetings law.

☀

Section 6.4: The Chairperson of the Board may call an emergency meeting pursuant to this provision of the Bylaws. For purposes herein, “emergency” is defined as a situation which creates or has the potential to create a threat to the health, well being, or safety of the University or the University community. The Board shall make a reasonable effort, under emergency circumstances, to notify the members of the Board, media organizations which have filed a written request for notification, and the public of the emergency meeting. At the beginning of the emergency meeting, the chairperson shall briefly describe for the record the emergency circumstances preventing compliance with the notice provisions under the Open Meetings law. These comments shall appear in the minutes. Discussions and action at the emergency meeting shall be limited to the emergency for which the meeting was called.

☀

Section 6.5: Board members are expected to attend all Board meetings, commencement ceremonies, and participate in Board development activities. If a Board member is unable to physically attend a Board meeting, he/she may participate via any appropriate technology that allows the Board member to substantively participate via means that is consistent with the Open Meetings Act or any other applicable law.

☀

Section 6.6: Members of the University community and members of the public are welcome to attend open meetings of the Board, but may not address the Board of Regents or otherwise participate in the meetings except pursuant to a previously approved request for appearance to be heard in accordance with this paragraph. Persons desiring to be heard by the Board shall first submit to the President in writing the subject matter and the reason for desiring to be heard by the Board. The President shall then call the request to the attention of the Board Chairperson. The Chairperson may then determine whether or not to permit the person requesting appearance before the Board to speak, or the Board by a majority vote may grant such a request of the person requesting authority to speak. The Board shall be notified of all requests that are denied.

☀

☉ Section 6.7: The President of the University shall attend all meetings of the Board.

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Section 6.8: A majority of the members of the Board shall constitute a quorum for the transaction of business.

☀

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☀

☀

Section 6.9: Meeting agendas of the Board shall be determined jointly by the President and the Board Chairperson, with essential materials provided to the Board members at least ten (10) calendar days in advance for regular meetings, and as soon as practicable for special meetings.

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Section 6.10: Upon the concurrence of the Board Cehairperson and the President, agenda items may be designated as consent agenda items in the agenda of a regular Board meeting. Unless any Board member objects to the inclusion of an item on the consent agenda by notifying the President at least forty-eight (48) hours before the Board meeting, all items designated as consent agenda items shall be recommended for approval by a single vote by the Board without discussion of individual items.

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Section 6.11: All meetings shall be conducted in accordance with the principles of procedure prescribed in Roberts' Rules of Order, as most recently amended.

Article VII:

Officers of the Board of Regents

Section 7.1: The Board of Regents shall elect its Chairperson, Vice-Chairperson, and Secretary annually at the Board's first meeting.

☀

Section 7.2: The Board shall appoint a Treasurer and the term of the Treasurer shall be at the pleasure of the Board.

Section 7.3: The Board shall appoint any-and-such officers as it deems necessary, except no member of the Board shall be appointed Treasurer.

☀

The term of the Treasurer shall be at the pleasure of the Board.

Article VIII:

Duties of the Officers of the Board of Regents

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Section 8.1: The Chairperson shall preside at the meetings of Board and shall be responsible for the management and orderly conduct of the business of the Board. The Chairperson shall issue calls to convene the Board in regular and special meetings. He/she shall determine the date, time and place of the Board meetings.

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Section 8.2: The Vice-Chairperson shall, in the absence or disability of the Chairperson, perform the duties of the Chairperson of the Board.

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Section 8.3: The Secretary shall keep and prepare all records, books and papers belonging to the Board. The Secretary shall prepare for and submit to Board members in advance an agenda of the business for discussion and decision by the Board. The Secretary shall record and keep on file accurate minutes and other documents of all Board deliberations and decisions. The Secretary shall submit the minutes of each Board meeting to members of the Board not more than thirty (30) days after each meeting, and shall ensure that the Board chairperson signs all approved minutes. The Secretary shall transmit all officially signed minutes to the University Archives in Blazer Library. Further, the Secretary shall prepare, under the direction of the Board, all reports and estimates, and shall execute all matters belonging to his office. The Secretary's compensation shall be fixed by the Board.

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Section 8.4: The Treasurer shall be responsible for the management of the financial affairs of the Board and the University in accordance with accepted budgetary procedures and state law. He/she shall receive and disburse money under the control of the Board, and perform all acts that pertain to his office under the direction of the Board. He/she shall present at each regular meeting of the Board a statement of the financial status of the University.

Article IX:

Committees of the Board of Regents

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Section 9.1: The standing committees of the Board of Regents shall be the Executive Committee, the Academic Affairs Committee, the Finance and Administration Committee, the Audit Committee, the Student Affairs Success and Enrollment Affairs Committee, and the External Relations and Advancement Development Committee and the Compensation Committee. Members and chairpersons of the standing committees of the Board shall be selected by the chairperson of the Board of Regents. Other standing committees of the Board shall be determined by the Board with members appointed by the chairperson. Ad hoc committees may be created and members appointed by the chairperson. The Compensation Committee shall be a standing committee of the Board of Regents; however, the membership of the Compensation Committee shall be comprised of the members of the Executive Committee. The Compensation Committee shall formulate and propose compensation guidelines, salary levels and annual salary adjustments, among other items, for consideration and approval by the Board.

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☀

Section 9.2: Committees shall possess no delegated authority of the Board of Regents unless approved by a majority vote of the Board or as allowed under these By-laws. All actions of each committee, unless taken with delegated authority, shall constitute recommendations to the Board and shall be subject to approval by a majority vote of the Board.

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Section 9.3: All Committee members shall serve for a term of one year or until their successors have been duly selected by the Chairperson. In the event of a vacancy on a committee, the successor member shall be selected by the Chairperson of the Board of Regents and shall hold office for the balance of the term of office of the person vacating their office.

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Section 9.4: The Executive Committee shall be composed of the officers of the Board of Regents, the standing committee chairpersons, and the past Board chairperson. The chairperson of the Executive Committee shall be the chairperson of the Board of Regents. -The Executive Committee shall provide guidance to the President on matters that arise in the interim between regular meetings. The Executive Committee shall have the same powers as the Board of Regents during the interim between meetings of the board, except that it may not elect or dismiss a president of the University, create a new position in the University, abolish one already existing, nor adopt the annual budget for the University. The Executive Committee shall also serve as the President's Review and Compensation Committee, and shall present recommendations concerning same-the President's compensation to the

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full Board for vote. The Executive Committee shall involve the entire Board in this evaluation process and shall also solicit input from university stakeholders. The Executive Committee shall be responsible for the planning of the Board's annual retreat. The Executive Committee shall submit to the board Board of Regents for its ratification at the next full Board meeting a complete record of all actions taken by the Executive Committee. The Secretary of the Board of Regents shall attend all meetings of the Executive Committee and shall serve as its secretary. Notwithstanding the foregoing, in matters involving the review, evaluation and compensation recommendations for the President, the Secretary may not be present during said discussions, if the Secretary is a University employee, and in such case, the chairperson in collaboration with the Board's compensation advisor, if any, shall serve as secretary and provide an accurate record of the minutes from said meeting.

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Section 9.5: The Academic Affairs Committee shall be responsible for evaluating all recommendations coming to the Board of Regents affecting the academic and intellectual affairs of the University. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

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Section 9.6: The Finance and Administration Committee shall review, evaluate, and provide guidance on financial issues, including the biennial budget requests submitted to governmental agencies, the annual operating budget of the University for each fiscal year, and all other financial, administrative, and budgetary matters. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

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Section 9.7: The Audit Committee shall recommend to the Board of Regents the engagement of an external auditing firm. The Committee shall meet with the external auditor and receive and review the auditor's external reports and University comments for the annual audit. The Internal Auditor shall serve as administrative agent to the committee.

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Section 9.8: The Student Affairs Success and Enrollment Affairs Committee shall review, evaluate, and provide guidance on all matters related to student life issues. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee.

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Section 9.9: The External Relations and Advancement-Development Committee shall review evaluate, and provide guidance on all matters related to fund-raising,

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development, public relations and alumni, including providing leadership for Board of Regents' fund-raising efforts. The President of the University shall appoint a member of the staff to serve as administrative agent to the committee. *** potential name change proposed?—E. Lysonge

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Section 9.10: The Compensation Committee shall formulate and propose compensation guidelines, salary levels and annual salary adjustments, among other items, for consideration and approval by the Board. [new section from 9.1]

Article X:

The President of Kentucky State University

Section 10: The President of Kentucky State University reports to the Board of Regents and serves at its pleasure. The powers and duties of the President include the following:

• A.(a) To be the chief administrative and educational officer of the University and to perform such other powers as may be prescribed by the Board of Regents;
• A.A.
• B.(b) To make and provide interpretation and implementation of Board Policy, through the promulgation of administrative regulations, for all aspects of the academic and other functions of the University, coordinating it with whatever individual, groups, or organizations may be required;
• B.B.
• B.C.(c)___ To recommend major policies and other major actions to the Board of Regents for its final action and to be the official medium of communication between the Board of Regents and the various segments of the University and their official bodies;
• €.
• €.
• D.(d) To make final decisions for which he/she has received delegated responsibility over a wide range of activities from the Board of Regents; such actions are ordinarily taken after consultation with various concerned individuals, groups, or organizations;
• D.D.

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• D.(e) To enforce the Board Policies, administrative regulations, and guidelines of the University.
• E.E. F.(f) To recommend to the Board the employment of administrative faculty and vice-president level and above staff.
• F.G. To employ all other non-administrative faculty, and employees of the University whose compensation shall fall within the approved University Classification and Compensation System.
• (g)G. H.(h) To recommend to the Board changes in administrative structure and organization of the University which enhance and align with its mission.
• H.H. I.(i) To recommend to the Board faculty tenure and administrative promotion decisions.
• I.J.(j) To prepare annual budgets after consultation with, and input from, the Board and others as appropriate, and to recommend all other budgets and any modifications of these budgets as needed to the Board.
• J.K.(k) To appoint University-wide committees.
• K.K. L.(l) To manage the University through officials that report to the Office of the President.
• L.L.
• M.To provide leadership in the development of academic instruction, research, and service programs by making initiatives to the Faculty Senate and to the faculties of academic units and their planning committees concerning changes in curriculum or academic policies which are the responsibility of the faculty.

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• M.N.(n) To serve as an ex-officio member of all faculties and all faculty committees, to call and preside over the meeting of the University faculty and such advisory groups as the President chooses to appoint, and at his/her direction to call meetings of the faculties of the several colleges and schools of the University.
• N.O.(o) To be responsible for all University functions relating to student affairs and the life of students at the University, as well as intramural and extramural or intercollegiate athletics;
• 0.
• (p)To be responsible for all aspects of the relations of the University to the community and for providing information about the activities of the University;

P...

• P.P.
• P.P.
• P.P.
• Q.(q) To be responsible for public relations:
• Q
• R.(r) To maintain continuing relations with governmental agencies at city, county, state, and federal levels as required by the mission of the University;
• R.R.
• S.(s) To be responsible for relations of the University with alumni;
• S.S.
• T.(t) To be responsible for raising funds from the federal government, state and local public sources, corporations, private individuals, foundations and other sources;
• T.T.

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Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 18 of 21

• (v)V.
• V.V.
• V.W.(w) To prepare and submit to the Board of Regents an annual report on the work and general status of the University; and
• W.W.
• X.(x) To delegate as appropriate the responsibility for carrying out any of the above functions.

Article XI:

Indemnification, and Legal Defense of Board Members, Conflicts of Interest and Confidential Information

Section 11.1: It is the purpose of this articleBy-law to provide that any member of the Board of Regents be afforded a legal defense and indemnification for any acts or actions taken in good faith and within the scope of his/her official duties while on the official business of the University.

Section 11.2: A conflict of interest occurs when any Board member has existing or potential interests that compete or could compete with the interests of the University or any directly affiliated organization, or which impairs or might reasonably impair

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 19 of 21

such Board members' independent, unbiased judgment in the discharge of one's responsibility. –Board members shall avoid entering into or maintaining any business or financial interests, transactions, acquisition or sale of property interest which are or may be in conflict with those of the University. Board members shall avoid any personal interest, direct or indirect, in any contract for the purchase of land, buildings, supplies, or services for the University. Board members shall not accept gifts or benefits from any person holding contracts for supplies or services to the University. [Previously in article III]

Section 11.3: Board members shall refrain from using, discussing or disseminating confidential information obtained in his or her official capacity as a Board member and through board discussions during closed sessions of the board in any manner and for any reason, including, but not limited to, using, disclosing or disseminating such information with the intent to obtain financial gain for self or any other person or any other business with which the Board member is associated. [New section-Barfield]

Section 11.4: Whenever any conflict of interest appears to exist after taking the oath of office, the Board member shall immediately fully disclose that conflict to the Executive Committee and to the President of the University. In no event shall such disclosure be delayed longer than seventy-two (72) house prior to consideration of the matter by the Board.

[Previously in article III]

Article XII:

Amendments

Section 12: These bylaws may be amended by the affirmative vote of a majority of the membership of the Board of Regents providing notice in writing of any proposed amendment is given to members at least 10 days prior to a meeting at which the amendment is to be discussed. The ten day notice provision may be waived upon a vote of the majority of the Board members.

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 20 of 21

July 24, 2014 Version

HISTORY: Adopted March 3, 1983; Revised May 9, 1992; Revised November 16, 1992; Revised January 26, 1996; Revised January 24, 1997; Revised October 30, 1998; Revised February 5, 1999; Major Revision October 24, 2003; Revised November 5, 2004; Revised: ___

Bylaws Kentucky State University Board of Regents Effective Date: _____ Page 21 of 21

Kentucky State University

Board of Regents Meeting

Academic Affairs Committee

January 22, 2015

Regent Karen Bearden, Chairperson

Regent Mindy Barfield

Regent Elaine Farris

Regent Elgie McFayden

Regent Syamala Reddy

Regent Breana L. Smith

Dr. Beverly Downing, Staff

[ 1 ]

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Academic Affairs Committee January 22, 2015 1:00 pm to 2:30 pm Board Room – Academic Services Building Frankfort, Kentucky

MEETING INDEX

• A1 Approval of Minutes
• A2 Executive Summary Information
• A3 Internal Faculty Review

\ 2; \

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Academic Affairs Committee January 22, 2015 1:00 pm to 2:30 pm Board Room – Academic Services Building Frankfort, Kentucky

AGENDA

• I.Call to Order
• Regent Karen Bearden, Chairperson
• II.Roll Call
• Dr. Beverly Downing, Interim Vice President for Academic Affairs
• III.Opening Remarks
• Regent Bearden
• IV.Approval of Minutes
• Regent Bearden
• V.Executive Summary Report
• Dr. Downing
• VI Informational Items: Internal Faculty Review
• Dr. Downing
• VII.Dr. Downing
• VII.Discussion
• VIII.Adjournment

\ 3; \

A1

Agenda Item Background

Background:

The minutes of the Academic Affairs Committee meeting for October 24, 2014, require approval in order to become an official part of the committee records.

Recommendation:

It is recommended that the Academic Affairs Committee approve the minutes of the October 24, 2014 meeting.

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KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Academic Affairs Committee October 24, 2014 9:00 a.m. Board Room – Academic Services Building Frankfort, Kentucky

MINUTES

Regent Karen Bearden, Chairperson called the Academic Affairs Committee meeting of the Kentucky State University Board of Regents to order at 9:00 a.m. on October 24, 2014. Regent Bearden asked the secretary to call roll:

Karen Bearden Mindy Barfield Elaine Farris Present Present Present

Elgie McFayden Syamala Reddy Breana L. Smith Present Not Present Not Present

A quorum was declared.

Action: A motion for the approval of the Academic Affairs Committee's July 25, 2014, minutes was made by Regent Barfield and seconded by Regent McFayden. The motion passed.

Dr. Downing's Executive Report affirms that Academic Affairs and Land Grant faculty and staff remain dedicated to teaching, research, and service.

Action: A motion was made and seconded for approval of authorization for the President to confer the degrees at the December 13, 2014, commencement ceremony. The motion passed.

A motion was made and seconded for adjournment of the Academic Affairs' Committee October 24, 2014 meeting. The motion passed.

The meeting adjourned at 10:29 a.m.

\ 5; \

Submitted by:

Approved by:

A2

Agenda Item Background

Background:

The Academic Affairs Report submitted by Dr. Beverly Downing, Interim Vice President for Academic Affairs is present on the following pages.

Recommendation:

Informational Item

\ 7; \

EXECUTIVE SUMMARY

UNIT ACCOMPLISHMENTS

COLLEGE OF ARTS AND SCIENCES

Presentations, Performances, and Publications

Dr. Thomas McPartland, Chair of the Whitney Young School (WYS) published an article on “Historicism” in the Encyclopedia of Political Thought (recently published by Wiley). The abstract on the article: “Historicism” is the English translation of the German “Historismus.”

The WYS hosted the annual Liberal Studies Lecture Series this fall. The series was open to the campus and the general public. Three chairs were among the presenters. Topics included forensics by Dr. Tierra Freeman and Mara Merlino; the intersection of literature and music in the works of Byron and Schumann by Drs. Todd Davis and Mark Tollefsen, and the history of revolutions and ISIS by Dr. Thomas McPartland.

Dr. Tucker Landy of the Whitney Young School of Honors and Liberal Studies attended the 46th Annual Conference of the Northeastern Political Science Association in Boston from November 12-15, 2014. He presented a paper entitled, “Strauss, the Two Roots of Morality, and the Non-Philosophic Erotic Man.”

Dr. Erin Giles gave a presentation entitled “Social Media Strategies for Organizational Success” during a Bluegrass Project Management Institute meeting at the Paul Sawyer Library on October 9, 2014. The presentation included an overview of the current social media landscape as well as tips for using strategy in social media for organizations or businesses.

Dr. George Shields is one of the subjects of an article forthcoming in the Oxford University Journal, Mind. It is perhaps the oldest and most prestigious journal of professional philosophy. Mind is so exclusive, they publish about 24 articles out of 12,000 entries per year. To be discussed in a Mind article is to be taken seriously at the highest level of professional philosophy.

Dr. Karah Stokes’ poem, “Beneath Us the Dead” has been accepted for publication in Pine Mountain Sand & Gravel, the literary journal of the Southern Appalachian Writers Cooperative. Volume 18, “The Dead,” will be available in March 2015.

Moffett, Joe (2014). Mysticism in Postmodernist Long Poems: Contemplation of the Divine. Bethlehem: PA Lehigh University Press.

Student Accomplishments

Senior Raven Watkins presented a paper, “The Distopia of Utopia” where, analyzing Thomas More’s famous book, she concludes that with peace comes control. Sophomores, Jade Brooks,

Rachel Clowers, and Deanna Trombley explored the nature of a tragic hero in their panel, Okonkwo’s “Tragedy: Considering the Hero of Chinua Achebe’s Things Fall Apart.” Sophomore, Andrew Teal argued for the political virtue of a balance of power and separation of powers in his presentation on “Balance of Power in the Roman and United States Constitutions”. Dr. Gary Elliott helped with the preparation of the student presenters. Dr. Thomas McPartland, Chair of Whitney Young School, who accompanied the students, is also president of the Kentucky Honors Roundtable.

Community & University Service

Drs. Mark Tollefsen and Jae Won Kim began their terms as president and vice-president, respectively, of the Bluegrass Area Music Teachers' Association (BAMTA).

Dr. Erin E. Gilles was elected as the Eastern Representative for the Kentucky Communication Association for 2014-2016.

Dr. Sam Oleka initiated and facilitated the meeting between President Raymond Burse and the official representatives of the Vice Chancellor from Michael Okpara University of Agriculture, Umuahia, Nigeria. During the visit, a memorandum of understanding was signed on the implementation of partnerships, research on grants proposal writing collaborations, faculty engagement, and student exchange programs.

Drs. Shannon M. Brogan and Erin E. Gilles presented on a panel at the 2014 Kentucky Communication Association Conference with undergraduate students Suncearae Spears and Robert Willis titled, “Paying it Forward: Uniting Communities in Times of Need.”

COLLEGE OF PROFESSIONAL STUDIES

Presentations, Performances, and Publications

School of Nursing

Abdullah Alhurani received American Heart Association’s (AHA) Instructor of Basic life Support (BLS) and Advanced Cardiovascular Life Support (ACLS) certifications. This certifies him to conduct training workshops and to provide AHA certificates for BLS and ACLS.

Jennifer Miller’s abstract, "A Nationwide Cross-Sectional Study of Gender Disparities in Symptoms of Anxiety, Depression and Quality of Life in Implantable Cardioverter Defibrillator Recipients," Control ID 2107764, was accepted by Southern Nursing Research Society (SNRS) as a poster presentation for inclusion in the 2015 conference program.

Community & University Service

The School of Nursing collaborated with Student Health Services to host a blood drive. Two nursing students helped with registering participants for the drive.

The School of Nursing collaborated with Student Services to host a health fair on October 28, 2014. Fifteen nursing students gave sixty-five (65) influenza vaccinations and took the blood pressure of eighty (80) participants.

COLLEGE OF BUSINESS AND COMPUTER SCIENCE

Dr. Abdul M. Turay attended a “Professors Conference” organized by the Federal Reserve Bank of St. Louis. The meeting was held in St. Louis, MO, November 6-7, 2014.

Presentations, Performances, and Publications

Drs. Albert Assibey-Mensah and Abdul M. Turay were presenters at the 2014 Small, Limited Resources, Minority Farmers Conference at Kentucky State University. The title of their presentation was “The Economics of Small Farms.” The conference was held on November 18-20, 2014.

Dr. Rene Desbborde presented a paper entitled, “Picasso: A Case Study of the Four Ps of Art Marketing” at the Atlantic Marketing Association Annual Conference in Asheville, NC, September 24-27, 2014.

COLLEGE OF AGRICULTURE, FOOD SCIENCE AND SUSTAINABLE SYSTEMS (CAFSSS)

Teaching Innovation

Drs. Buddhi Gyawali, George Antonious, Maifan Silitonga, and Chi Shen (2014, fall) are implementing an NSF-HBCU-UP grant, “Minor in Geoscience Application” project. This 19 credit hour curriculum is being developed and will be finalized soon for approval.

Scholarly Activities - Publications

Twenty three (23) publications were produced by CAFSSS faculty/staff:

• Agriculture and Natural Resources (ANR) = 5 (5 faculty/staff)
• oResearch = 3 (3 faculty/staff), Extension = 2 (2 faculty/staff)
• Aquaculture (AQU) = 10 (10 faculty/staff)
• oResearch = 6 (6 faculty/staff), Extension = 4 (4 faculty/staff)
• Environmental Studies & Sustainable Systems (ESSS) = 2 (2 faculty/staff)
• oResearch = 0, Extension = 2 (2 faculty/staff)
• Food and Animal Science (FAS) = 4 (4 faculty/staff)
• oResearch = 3 (3 faculty/staff), Extension = 1 (1 faculty/staff)
• Family and Consumer Sciences (FCS) = 2 (2 faculty/staff)
• oResearch = 0, Extension = 2 (2 faculty/staff)

Scholarly Activities – Presentations

A total of Ninety two (92) presentations were conducted by CAFSSS faculty/staff and students:

• ANR = 17 (12 faculty/staff, 5 undergrad)
• oResearch = 8 (8 faculty/staff), Extension = 4 (4 faculty/staff)
• AQU =15 (10 faculty/staff, 3 undergrad, 2 grad)

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• ESSS = 19 (14 faculty/staff, 3 undergrad, 2 grad)
• FAS = 15 (14 faculty/staff, 1 grad)
• FCS =26 (26 faculty/staff)
• oResearch = 4 (4 faculty/staff), Extension = 6 (6 faculty/staff)
• oResearch = 5 (5 faculty/staff), Extension = 9 (9 faculty/staff)
• oResearch = 0, Extension = 14 (14 faculty/staff)
• oResearch = 0, Extension = 26 (26 faculty/staff)

Grants Submitted

A total of eight (8) proposals were submitted for a request of $1,115,909.

Grants Awarded

A total of five (5) grants received notification of funding for a total of $225,238 awarded.

Awards

Dr. Marion Simon & Mr. Louie Rivers, Jr. received the Southern Region and National Team Award for “The Third Thursday Team” at the National Epsilon Sigma Phi Annual Meetings in Indianapolis, IN on October 8, 2014.

Ms. Nancy Hubbard-Sánchez was selected by her peers as the recipient of the CCC Fellowship Mentor Award presented by North American Association for Environmental Education (NAAEE) on October 9, 2014, in Ottawa, Canada.

DIVERSITY AND INCLUSION

Dr. Vernell Bennett, the former Assistant Vice President for Diversity and Inclusion presented on KSU’s institutional diversity self-study at the Council on Postsecondary Education’s (CPE) Committee on Equal Opportunities’ October meeting. The University’s Promising Youth Center for Excellence was also featured during the quarterly meeting. The program’s director, Mr. Timothy Latham presented a PowerPoint presentation on the federal grant program and its participants.

Dr. Bennett and members of the Campus Environment Team (CET) attended the annual cultural celebration sponsored by Dr. Herman Walston’s CDF 421 course. The reception was held to enable students to interact with various racial and ethnic minorities on campus and in the community, and to validate some of the various concepts they have learned and/or are studying in the course. Students enrolled in the course were required to invite at least one racial or ethnic minority and to provide an ethnic dish.

Dr. Bennett is a member of the Kentucky Blacks in Higher Education’s Conference Planning Committee. During this reporting period, she attended several meetings to plan next April’s conference where she will be serving as a speaker.

Dr. Bennett attended the Southern Region Education Board’s Compact for Faculty Diversity Conference and Recruitment Fair in Atlanta, Georgia. Six professionals expressed an interest in seeking employment at KSU in the following disciplines: biology, sociology, journalism,

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electrical engineering, public health, and business/human resources. Curriculum vitas were provided to the vice president for academic affairs.

Dr. Bennett attended The U.S. Department of Education, Office for Civil Rights' (OCR) seminar that focused on the substantive and procedural requirements of postsecondary institutions under Title IX. The seminar provided an analysis of the 2011 and 2014 Dear Colleague Letters, what constitutes a prompt and equitable response, the standards applicable to OCR's enforcement of compliance with Title IX, a college's responsibilities, possible remedies, procedural requirements, grievances procedures, recommended tools for prevention and best practices, and what to expect during an OCR Title IX investigation, including data requests and on-site visits. The seminar was held at the University of Louisville.

Dr. Bennett is a member of the Central Kentucky Diversity Consortium. The consortium’s membership includes KSU, Centre College, Georgetown College, EKU, Bluegrass Community and Technical College, UK, and Transylvania University. The 2014 Multicultural Opportunities, Strategies and Institutional Inclusiveness Conference (MOSAIIC) was held December 4-5 at the Lyric Theatre in Lexington, Kentucky. Dr. Bennett transported KSU students to the two-day conference.

University Service

Dr. Vernell Bennett served as the coach for junior, elementary education major, Alexis Fonville who competed on the nationally televised Black College Quiz Show. The show was recorded in Atlanta,

Georgia.

ACADEMICS WITH ATTITUDE

Kentucky State University’s SACS Quality Enhancement Plan, titled “Academics with Attitude (AWA)” completed its final fall semester on Monday, December 15, 2014, with 36/39 students from summer 2014. Courses included ENG 099, ENG 099/101, ENG 102, MAT 095, MAT 096, MAT 097, and MAT 111.

The program has served 506 students over the past five years. Fifty-nine percent (300) of the students enrolled in the program have been retained. Two students have graduated.

Supplemental Instruction

Supplemental instruction, developed in collaboration with faculty, is provided by one full-time math Project Seminar Leader (PSL) and 4 part-time writing/reading Project Seminar Leaders. The professional supplemental instructors provide 3 hours per week of seminars per composition, reading, and math class, as well as tutoring at the AWA Study Tables 4 nights a week, 6:30-8:30 p.m. Attendance averaged 5 visits per week with 11 students attending more

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than 4 times. PSLs saw 81 students through December 1, 2014. Students came most for reading; second for writing, and last for math although the difference was small.

OFFICE OF REGIONAL STEWARDSHIP AND CIVIC ENGAGEMENT

Since school began in August, approximately three hundred eighty (380) KSU students have participated in service projects in the Frankfort/Lexington community. The volunteered activities included The Roots and Heritage Festival in Lexington, assisting with voter registration drives, Constitution Day events, Pay it Forward Acts of Giving, mentoring in the local schools, Homecoming activities including the Stadium Clean-Up Recycling Project, hosting Halloween on the Hilltop, hosting the Green Job Fair, cleaning the fence line at the Greenhill Cemetery, Santa’s Helpers with the Franklin County Extension Office, Hosting a High School Student for a Day, Habitat for Humanity, Simon House, Franklin County Women’s Shelter, Senior Citizen Center, ACCESS Men’s Shelter and Soup Kitchen, The Center of Excellence for the Study of Kentucky African Americans, and the KSU Wesley Foundation Students’ Clothes Closet.

Most of the students were fulfilling a ten-hour community service requirement for their University Orientation classes, or were members of Academics with Attitude living/learning group, or other service-learning classes that committed to one hundred (100) Days of Paying it Forward. In total, students have completed over 5,980 hours of service to date. Students participated in the Angel Tree project, mentoring in the public schools, assisting with the Kiwanis Club, Salvation Army, and other Christmas fundraising drives.

One of the Pay it Forward service learning classes, Speech 103, taught by Dr. Shannon Brogan, organized students volunteering at six non-profit agencies at least two hours per week. Each of the six agencies had a group of students assigned to volunteer and learn about the non-profit agency. The Office of Regional Stewardship and Public Engagement provided each student with $100 as part of the $100 Solution, Turning $100 into a World of Change. Students submitted proposals and made presentations at the end of the semester about how they proposed to utilize the $100 donation.

On November 21, 2014, The Office of Regional Stewardship and Public Engagement held a service recognition reception recognizing students, faculty, staff and community members who served the Frankfort community. Over one hundred thirty honorees were present and received awards and certificates for their service.

THE GRADUATE SCHOOL

Activities and Accomplishments

The Graduate Studies Office has established folders for the graduate programs (DNP, MASPE, MBA, MCS, MES, MIBS, & MPA, & MSA) under the Graduate Studies OneDrive account. Each graduate program folder will store scanned graduate application materials for the program. The purpose of this initiative is to improve the handling of graduate application documents in the

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short run until information for all admissions requirements have been coded in Banner. The short run measure will help achieve:

1. Timely access to application materials by approved interested stakeholders (e.g., Program Coordinators, Department Chairs, etc.).
2. Reduction in the number of copies of application materials distributed.
3. Reduction in costs of making multiple copies of application materials.
4. Better secured handling of application materials.

The Graduate Studies website continues to be regularly updated as necessary. Recently, an “Opportunities for Graduate Students” webpage was added. The webpage is set up to provide information about employment, the profession, research, grants, and internship opportunities for KSU graduate students. The webpage can be accessed at www.kysu.edu/grad. A similar implementation has been made on Blackboard under Graduate Studies Community Site.

The Director of Graduate Studies worked with the KSU Web Content manager to design websites for the Doctor of Nursing Practice (DNP) and the Master of Arts in Interdisciplinary Behavioral Sciences (MIBS). The MIBS website is accessible from http://kysu.edu/academics/graduate-studies/graduate-programs/. The DNP website will be available upon approval.

Graduate Council meetings were held on September 10, 2014 and October 22, 2014. The Council recommended some changes in graduate studies policies. The changes are being finalized for Faculty Senate approval, and eventually the approval of University administration.

A Graduate Students get-together event was held on September 12, 2014. Fifteen graduate students and several graduate faculty members participated in the event.

BLAZER LIBRARY

The Library has been given the approval to participate in the migration from the ExLibris Voyager Library system to the new OCLC Worldshare Management System. All Library faculty and staff will participate in the training and implementation. The system will go live May 15, 2015.

The Library and Academic Affairs sponsored the Faculty Academic Fair on November 20, 2014 from 1:00-4:00 pm at Blazer Library. Twenty-one faculty from various units presented their recent publications and creative works at the event and the Library also promoted its databases and services. The library plans to make it an annual event to promote faculty scholarship. Blazer Library faculty; Nkechi Amadife, Raphael Jackson Sharon McGee, and Bobby Walter presented publications, poems and creative works during the Faculty Academic Fair.

The Library extended its hours from December 8-11 from 8:00 am to 3:00 am, for finals exam week. Refreshments were provided by Academic Affairs for the students each night.

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Education Librarian, Mr. Bobby Walter donated 158 children's books from the Library's State Textbook collection to the Rosenwald Center for Families and Children for its 2014 Fall Festival held on November 1, 2014.

The Division of Fine Arts’ Art faculty and students displayed their creative paintings in the Library during the month of October and November. The idea was to share with the University community what the Art students are learning and creating in their painting classes.

A special thanks to Drs. Jae Won Kim and Mark Tollefsen, professors from the Division of Fine Arts who donated copies of their newly released CD’s, Piano Works by Poulenc and Francaix, and Works for Solo Piano by Allende, Mompou and Pew to the Library.

Blazer Library received a donation of philosophy and civil rights books from Dr. Alan B. Anderson, retired professor from the Department of Philosophy and Religion at Western Kentucky University and his wife Mrs. Denise Anderson. A special thanks is given to the Andersons for this educational and historic collection.

Mrs. Dantrea Hampton coordinated the “An Afternoon with Santa” event which was held on December 14, 2014 from 4:30-6:00 pm at Blazer Library. The event was sponsored by KSU, Paul G. Blazer Library, Frankfort/Franklin County Branch of the NAACP, Beta Upsilon Omega Chapter of Alpha Kappa Alpha Sorority, Inc., and Friends of Santa and the Library. Fifteen children participated.

UPWARD BOUND/TRIO/I3 GRANTS COLLEGE READINESS

In keeping with the pride and tradition of helping students graduate from high school and enroll in college, the Upward Bound (UB) and GO College programs at KSU are performing well. The purpose of this summary is to provide an overview of the various activities and events that help prepare high school students for college.

The Upward Bound program has been extremely busy during the academic year. The program began its tutoring program during the month of October with five KSU student tutors. On average, 12-15 students received tutoring on Tuesdays and Thursdays over 8 weeks of the semester. In addition, forty-five Upward Bound students participated in the college and academic workshops which included Criminal Justice, ACT test preparation, and financial aid during the Fall semester.

The students participated in campus tours at Western Kentucky University and Morehead State University. Moreover, during the month of October, students participated in Kentucky State University’s Homecoming and dedicated a float to the mother of one of our Upward Bound participants who was recently diagnosed with breast cancer. A total of $347.00 was collected and donated to the family to assist with medical expenses. The students were featured in Frankfort’s State Journal newspaper.

The Upward Bound program concluded the academic year with its Fifty Years of Upward Bound National Celebration. President Raymond Burse was the guest speaker. The UB students

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participated in a service learning activity for the youth of Frankfort’s Kings Center on December 19th. The program is also focusing on its Annual Performance Report which is due on December 31.

GO College Summary

GO campus tours have taken place at Kentucky State University, Morehead University, and Northern Kentucky University. During KSU's Homecoming week, the program brought 40 seniors to campus for a campus tour, 30 of the seniors applied to KSU. GO College programs brought over one hundred students to KSU during the Open House.

The GO College staff conducted workshops on college readiness and preparedness and hosted speakers to advise the students on financial aid, the college application process, and business decorum. The coaches also invited Kentucky State University's Student Support Service Counselor, Ms. Jacqueline Ford to speak about Kentucky State University and Student Support Services.

OFFICE OF GRANTS AND SPONSORED PROGRAMS

From October 28, 2014 through December 31, 2014, the Office of Research, Grants, and Sponsored Programs (ORGSP) was awarded grants totaling $636,435.

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A3

Agenda Item Background

Background:

Recommendation:

Informational Item

17

KENTUCKY STATE UNIVERSITY Frankfort, KY Office of Academic Affairs Internal Faculty Review Kentucky State University

Executive Summary

An external organization with numerous years of experiences and resources to do this work for institutions across the country will conduct the faculty productivity study. Kentucky institutions (see Appendix A) like Kentucky State University have found this tool most helpful in the absence of other affordable tools and personnel to conduct these types of analyses. Additionally, this organization maintains such data on a daily basis. In the absence of a full-time assessment and evaluation professional, the Delaware Cost Study (Appendix B) is the ideal solution to provide valuable analysis of data to inform institutional decision-making. This service costs the University $2,000 to join and $1,000 per year of subsequent participation.

The Delaware Cost Study uses an analytical tool to benchmark teaching workloads, instructional costs, and productivity by academic discipline for the institution. Specifically, the results of the study will provide analyses that respond to Kentucky State University's (KSU) ability to determine:

• How teaching loads of tenured faculty in academic programs compare with national benchmarks?
• What proportion of undergraduate teaching at KSU is done by regular full-time faculty, and how that compares with other colleges and universities?
• Does it cost more to deliver a student credit hour of instruction at KSU than it does at peer institutions?
• How does externally funded research and service within academic departments measure up against competitors?

The detailed database will provide answers to these questions and more (see Sample Data Reports in Appendix C). Participation in the Delaware Cost Study affords KSU a clear, concise analyses of data on teaching loads by faculty category, direct cost of instruction and externally funded research and service productivity.

The Delaware Cost Study will also enable KSU to compare its data with national benchmarks arrayed by Carnegie institution type, highest degree offered and undergraduate/graduate program mix within a discipline.

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The data collection phase is currently underway with the submission deadline of January 30, 2015. Academic Affairs is working with the Office of Institutional Research to complete the data collection process. Unfortunately, the results of the study will not be received until July 31, 2015. Allowance of time for the institution to analyze this data and input it into the 2015-16 academic year is, therefore, limited. The data will, however, contribute to the institution's ability to plan its course of action strategically for the future.

Therefore, this review has been expedited. This report precedes a more comprehensive report inclusive of data to be collected through March 1, 2015. As a result of significant attrition in student enrollment, changes in the institutions tuition structure and much administrative realignment (relocation of academic support programs from Student Affairs to Academic Affairs), it is imperative that data from the current academic year be used to establish benchmarks. In so doing, the institution will be able to plan for enrollment growth and retention.

In the following report, we will review data relative to program enrollment by major, faculty loads, recruitment and retention, and graduation. This report will provide the data, observations derived from the data, and recommendations.

While not the optimal approach, this report will provide input for discussion and further analyses in decision-making to improve the institution's operational and financial efficiency. This report only includes full-time faculty (some with release time in other areas of work) and full-time students. The full internal productivity study is due on March 1, 2015. This document represents a preliminary review. A full report will follow in March prior to the completion of the Delaware Cost Study that is scheduled for July 2015.

Enrollments by Program

The data in this section reflects program students by major. It does not indicate the number of students who have declared minors in any program. The Banner system is not set up to track “minors.” We will be working with Information Technology to correct this problem.

The good news is that the way we operate is reflective of an atmosphere of increased accountability. It is notable that more than 1,300 students attempted the pre-registration process for the Spring 2015 semester. Increases in students engaging in this process resulted in more than 300% improvement in the pre-registration process, based on the previous year's pre-registration numbers.

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Class Total Number of Faculty Ph.D. ABD Masters

African Studies 4 1 0 0 0 0 0 0 5 1 1

Agriculture/Aquaculture 16 16 7 19 0 0 0 0 58 17 17

Biology 32 17 15 26 0 0 0 0 90 6 5 1

Business 65 30 29 39 0 0 0 0 163 8 7 1

Business Administration 0 0 0 0 0 10 0 0 10 9 8 1

Chemistry 3 5 2 8 0 0 0 0 18 3 3

Computer Sciences 11 12 11 22 0 28 0 0 84 5 5

Criminal Justice 36 28 37 36 0 0 0 0 137 3 3

Electronic Technology 0 0 0 1 0 0 0 0 1 1 1

Elementary Education 28 25 13 24 0 0 0 0 90 3 3

English 1 2 3 10 0 0 0 0 16 16 7 9

Environmental Studies 0 0 0 0 0 15 0 0 15 10 10

Fine/Studio Arts 3 4 1 6 0 0 0 0 14 3 1 2

Human Development & Family Studies 3 2 14 23 0 0 0 0 42 1 1

Information Technology 3 3 2 12 0 0 0 0 20 1 1

Liberal Arts/WYS 5 4 3 13 0 0 0 0 25 7 7

Mass Communication & Journalism 19 13 16 22 0 0 0 0 70 1 1

Mathematics 14 10 9 7 0 0 0 0 40 11 6 5

Music 13 5 2 5 0 0 0 0 25 8 4 4

Non Degree 0 0 0 0 23 0 9 104 136

Nursing 48 53 57 87 0 0 0 0 245 14 4 10

Physical Education 24 13 23 17 0 0 0 0 77 1 1

Political Sciences 5 2 4 9 0 0 0 0 20 3 3

Psychology 21 19 19 29 0 0 0 0 88 4 4

Public Administration 3 5 3 10 0 55 0 0 76 2 2

Social Sciences 3 3 12 13 0 0 0 0 31 4 3 1

Social Work 14 18 20 27 0 0 0 0 79 3 3

Spanish 2 1 0 1 0 0 0 0 4 2 2

Special Education 0 0 0 0 0 15 0 0 15 4 4

Undeclared 130 39 14 9 0 0 0 0 192

Total 506 330 316 475 23 123 9 104 1886 151 116 3 32

Freshman Sophomore Junior Senior UG Non Degree Masters GR Non Degree High School

Table 1 shows the actual number of students enrolled during Fall 2014 by major and classification. The top five most populated programs are nursing, business, criminal justice, biology, and education. Also couched in the top are the undecided category and the non-degreed groups that primarily consists of dual credit students.

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There is much-needed effort in the recruitment of students for all programs. Our Nursing program lists 245 majors, and is the only program with over 200 students enrolled. There are 16 programs with fewer than 50 students and of those, 9 programs have fewer than 20 majors. (Table 3) It is only by staffing the general education requirements that many faculty members are able to fulfill their full-time teaching load of 12 credit hours per semester.

What the Data Tells Us?

The data tells us that we have a pressing need to recruit students to our under-enrolled programs. There are sixteen (16) programs where fewer than fifty (50) students are enrolled. These programs tend to rely heavily on providing general education service area courses to complete their teaching loads.

Recommendation

The following recommendations are offered given the data on program enrollment:

1. That each program area develop and implement an aggressive recruitment plan to increase the number of students in its major programs.
2. That each academic program actively engage in helping students who are undecided to consider majoring in its program.
3. That faculty identify and pursue possible scholarship and internship opportunities for their students.
4. That faculty strengthen their teaching and learning, and assessment skills, to keep students engaged and hungry for knowledge.
5. That the institution considers combining appropriate programs to reduce the number of major fields.
6. That the registrar's office develops a method of identifying student minors in the student management system.
7. That a full-time Director of Graduate Studies be identified and hired.
8. That a Graduate School Recruiter be hired to coordinate recruitment efforts for graduate students.

Faculty Instructional Loads

Faculty instructional loads can be assessed in several different ways. When considering which calculation of the Full-time Equivalence for Faculty (FTEF) to be used one of the most difficult variables to capture is where to factor in the teaching of cross-referenced and developmental coursework. Therefore, the “Origin of Instructor” method will be used here in this calculation. This method is consistent with that employed by the Delaware Cost Study in its analyses of data. A trained statistician should only undertake the calculation of data related to FTEF.

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Therefore, what you will find here are charts that outline data fields that are critical to making these calculations.

The first area, to be reviewed, is the faculty to student ratio based on program enrollment. Many of KSU's programs are overstaffed with faculty. Likewise, there are a few programs where significant enrollments exist, but an inadequate number of faculty are available to deliver instruction.

Faculty by Program and Degree Level

Table 2 demonstrates that Kentucky State University has ample faculty with the doctoral degree. Every degree program has at least one full-time faculty member with the doctoral degree except for Health and Physical Education. In that program, there are two part-time faculty members with the doctorate and care is taken to ensure that the students are scheduled to receive at least twenty-five percent of their degree required course hours from instructors with doctorates. While inadequately staffed in this one program, through strategic management of the schedule, the university can ensure compliance with SACS Standard 3.5.4 (see Appendix D). Dr. Beverly Downing and one other faculty member hold earned doctoral degrees in health and physical education. Of the 29 credit hours in the content area 10 credit hours are taught by these individuals in the physical education teaching program. This represents 34% of the content. In the physical education non-teaching program, there are 42 content hours of which 12 credit hours are taught by these individuals. This represents 28.5% of the content. In both cases, the 25% SACS requirement is exceeded.

There are 151 full-time teaching faculty at Kentucky State University. Of these faculty members, 116 (77%) faculty members hold doctoral degrees and 35 (23%) faculty members hold Master’s degrees (including three that are all but dissertation). The terminal degree is defined differently in some disciplines. The Juris Doctorate (JD) and Master of Fine Arts (MFA) are considered terminal degrees in their disciplines. These latter levels are not included in the doctoral calculation. If added to the doctoral category, then the number of faculty with the doctorate would be increased by five (5).

It is also important to note that the faculty size currently in place at KSU once served a student population of more than 2,300. Over the past two years, that enrollment number has dropped drastically to less than 1,800 students. With only 49% of the faculty tenured (49% of 151=74), there is opportunity for reduction of faculty.

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Table 2: Percentage of Faculty by Degree Level

Total Number of

Teaching Faculty Ph.D. Masters

African Studies 1 1

Agriculture/Aquaculture 17 17

Biology 6 5 1

Business 8 7 1

Business Administration 9 8 1

Chemistry 3 3

Computer Sciences 5 5

Criminal Justice 3 3

Electronic Technology 1 1

Elementary Education 3 3

English 16 7 9

Environmental Studies 10 10

Fine/Studio Arts 3 1 2

Human Development & Family Studies 1 1

Information Technology 1 1

Liberal Arts/WYS 7 7

Mass Communication & Journalism 1 1

Mathematics 11 6 5

Music 8 4 4

Nursing 14 4 10

Physical Education 1 1

Political Sciences 3 3

Psychology 4 4

Public Administration 2 2

Social Sciences: Sociology 2 2

Social Sciences: History 2 1 1

Social Work 3 3

Spanish 2 2

Special Education 4 4

Total 151 116 (77%) 35 (23%)

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What the Data Tells Us?

To KSU’s advantage, seventy-seven percent (77%) of its faculty hold the doctoral degree. The Southern Association of Colleges and Schools (SACS), our regional accreditation agency, requires that students receive at least 25% of their major degree course hours from a person who holds the earned doctorate or the equivalent of the terminal degree. (See Appendix D).

Recommendation

While the university possesses a well-qualified teaching faculty, this report represents the starting point of reassessing the distribution of faculty relative to institutional programs and their enrollments. As an example, the data outlined in Table 3 shows areas where the institution is understaffed in red. There are five programs (Criminal Justice, Human Development and Family Studies, Mass Communication and Journalism, Physical Education, and Public Administration) where student demand outweighs the institution's ability to provide adequate faculty to serve in the roles of advisement and teaching. The student to faculty ratios for these programs far exceeds the institution's ability to serve these students adequately. Traditionally, these areas are served by extending resources to hire adjunct faculty to teach courses, but still leaves a shortage of faculty to advise students majoring in these programs. Table 3 also indicates that there are 16 overstaffed programs (African Studies, Agriculture/Aquaculture, Biology, Business Administration, Chemistry, Electronic Technology, English, Environmental Studies, Fine/Studio Arts, Information Technology, Mathematics, Music, Political Sciences, Social Sciences, Spanish, and Special Education).

Keep in mind that student to faculty ratios for many of the programs that appear overstaffed with faculty based on the number of majors in their program (Table 3) are not overstaffed when their support of the general education requirements are considered. (Biology, Chemistry, English, Fine/Studio Arts, Liberal Arts/WYS, Mathematics, Music, Social Sciences, Spanish) (Table 5)

This review is the first step in considering a serious reduction of faculty. Our tenure-track faculty members (44 faculty members are tenure-track) have received official notification of “non-reappointment.” We also have 33 faculty members who as “non-tenure-track faculty” are subject to yearly term appointments. We will be using the data provided by this report to make decisions regarding areas where additional faculty members are needed (Criminal Justice, Human Development and Family Studies, Mass Communication and Journalism, Physical Education, and Public Administration) and reducing the number of faculty members in overstaffed areas (African Studies, Agriculture/Aquaculture, Biology, Business Administration, Chemistry, Electronic Technology, English, Environmental Studies, Fine/Studio Arts, Information Technology, Mathematics, Music, Political Sciences, Social Sciences, Spanish, and Special Education) while maintaining our ability to meet the needs of our students in the area of general education requirements.

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What the Data Tells Us?

There are sixteen (16) programs at the institution where the faculty to student ratios are lower than 1 to 15. Despite the low ratios for these programs, there is no indication that retention rates for these programs are any better than those programs that are understaffed or adequately staffed. As an example, two of the programs listed in Table 3 are Criminal Justice (1-15) and Child Development (1-42). Many would believe that the program with the lowest ratio (Criminal Justice) would be poised to have the strongest graduation rate. However, Criminal Justice had a 10.3% graduation rate for the 2007 graduation cohort while Child Development registered a graduation rate of 37.5% during the same period. While the faculty to student ratio does not always have an impact on student retention and graduation, it is inferred in this data. There is an opportunity in our ability to drive change in the quality of faculty advisement through professional development and monitoring accountability. These interventions could provide significant impact on our graduation rates.

Recommendation

The most critical recommendation is for immediate impact to enhance KSU's efficiency of operations and fiscal position is two-fold. First a reduction in the faculty workforce is unavoidable. Secondly, the number of degree programs offered will have to be reduced strategically. KSU should also consider a more interdisciplinary approach to its academic programs. This would reduce or streamline the course work and the members of faculty needed to deliver the course content.

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The Data

Table 4: Full-Time Equivalent Faculty (FTFE) Coverage of Service Courses Fall 2014

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What the Data Tells Us?

Table 4 addresses those areas at the institution that serve in the capacity of teaching general education courses for all students at the University. All of the general education courses are mandatory although some are provided as options in satisfying knowledge in a particular category. For example, every student is required to complete English 101 and 102, English Composition courses six (6) credit hours. Student may choose an additional English course as they seek to satisfy a categorical general education requirement listed under Liberal Studies. Some programs, such as English and Fine Arts, have few student majors in their programs. However, these programs serve the general institutional population through providing service courses in general studies. English provides from four (4) to twelve (12) credit hours of courses through general education. (See Table 4 above).

Recommendation

The institution could greatly benefit from increased enrollments in English, Mathematics, and other programs where low enrollments exist. With sixteen English majors and a faculty to student ratio of 1 to 1, there is ample time for faculty to engage in recruitment. Likewise, Mathematics has 40 student majors and eleven (11) faculty members constituting a 1 to 4 ratio. It is strongly recommended that both of these areas develop recruitment plans and actively engage in recruitment activities to increase the core number of students in their majors. The institution is carrying a costly burden to support the general education program through these programs.

It is further recommended that the institution consider removal of and consolidation of some programs. For instance, the removal of the AIT program. The plan is to create an area of focus in network engineering to be housed in the Computer Science program. If approved, a “teach out plan” will be designed to manage the twenty-one (21) students currently enrolled in the programs.

Kentucky State University needs to think more strategically about an interdisciplinary approach in the delivery of other programs such as the social sciences and the arts where low enrollments exist.

There are one hundred ninety-two students enrolled that have not declared a major. The Center for Academic Persistence will engage these students in a series of programs to encourage them to select a major earlier in their matriculation. By guiding students into a major program earlier, the student's course choices would lead to a more efficient use of time allowing the student to complete his/her studies in an effective and appropriate time frame. This will help the institution improve our persistence and graduation rates.

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Faculty and Student Full-Time Equivalents

The Data

The following formula was used to calculate the Full-Time Student to Full-Time Equivalent Faculty.

FTE Students/FTE faculty = FTE Students Taught Instructional FTEF

Table 5: Student and Faculty FTE Calculations Including Required General Education Courses

What the Data Tells Us?

Full-Time Student to Full-Time Equivalent Faculty is the number of students served by faculty in each of the programs. It is important to note that Speech, which is a minor program, possesses the highest FTEF with service to 249 students through this equation. Mathematics, Fine Arts, and Music faculty maintain a low equivalence of students being served by their faculty despite the general education service course requirements.

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Recommendation

The institution has one of three choices in dealing with the matters of low enrollment, overstaffing (faculty) and curriculum inflation in the general education core. Those choices are as following:

1. Increase enrollment through the efforts of every stakeholder especially faculty that are under load;
2. Reduce faculty membership strategically in overstaffed areas, and:
3. Eliminate programs of lesser demand and/or reduce general education requirements.

Recruitment

Faculty have been engaged in the recruitment of students during Fall 2014 (see Appendix E). They have partnered with admissions staff at Kentucky Community and Technical Colleges System (KCTC) Schools and specifically at Bluegrass Community and Technical Colleges (BCTC).

Faculty have also been engaged in recruitment at the following events during the Fall 2014 semester. In addition to participation in recruitment events at KCTC and specifically at BCTC more than 32 faculty members also participated in the following events.

• Fall Open House - November 1, 2014
• Regional Round-up at Harrodsburg, KY – November 15, 2014
• Regional Round-up at Lexington, KY – December 6, 2014
• Kentucky College and Career Day
• DuPont Manual/Youth Performing Arts School, Louisville, KY – November 7, 2014
• Western High School – Nov. 11, 2014
• Woodford High School – Oct. 20, 2014
• Frankfort, Franklin County and Western Hill High Schools – Oct. – Dec., 2014
• Waggoner High School, Louisville, KY- November 19, 2014

It is important to note that recruitment results are reflected in the Spring 2015 academic semester, but also in the Fall 2015 entering class.

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Table 6: Jointly Recruited Students Admitted for the Spring 2014

What the Data Tells Us?

Faculty participation in recruitment has not been tracked in the past. We are encouraged by the efforts we see faculty now taking towards recruitment. These numbers provide a benchmark to measure future engagement.

Recommendation

While less than 25% of full-time faculty members were engaged in the joint recruitment

While less than 25% of full-time faculty members were engaged in the joint recruitment opportunities provided by Student Affairs (admissions) and Academic Affairs, this is a start in the right direction. The recommendation is to increase the engagement of faculty and staff in collaborative recruitment efforts moving forward to 100% participation. The recruitment efforts bring students to the university and provides visibility for Kentucky State University in communities throughout the Commonwealth. It also helps potential students and competitors understand who we are and what we do well.

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Persistence Rate of 2009 and 2010 Cohorts

The Data

Graduation rates are calculated using the Council on Postsecondary Education (CPE) definition. Specifically the definition is as following:

“The proportion of students who enter as first-time, full-time degree-seeking students in a given summer or fall who also earn a credential within 150 percent of the time normally needed to complete the degree. For example: bachelor’s degree graduation rates are calculated over six years, associate’s degrees are calculated over three years.”

In accordance with the CPE definition outlined above, the 2009 cohort consists of 457 first-time, full-time freshmen bachelor degree seeking students. There were 69 students that entered as first-time students who pursued the associate of arts degree. Below you will find the annual persistence rate for students in the 2009 cohort. As of fall 2014, a total of 69 students (13%) from the 2009 cohort have graduated.

The six (6) year period for Kentucky State University's 2009 Cohort ends after the summer 2015 academic semester. Therefore, what is presented in this report is a progress report of the persistence rate of the 2009 cohort as we approach the end of this cohort period. The 2009 cohort consist of 526 students who met the definition as outlined by CPE. Persistence rates may be viewed in Table 7.

Table 7: Persistence Rate for the 2009 Cohort

In accordance with the CPE definition outlined above, the 2010 cohort consists of 519 first-time, full-time freshmen bachelor degree seeking students. There were 93 students that entered as first-time students who pursued the associate of arts degree. Below you will find the annual persistence rate for students in the 2010 cohort. As of fall 2014, a total of 19 students (3%) from the 2010 cohort have graduated.

The six (6) year period for Kentucky State University's 2010 Cohort ends after the summer 2016 academic semester. Therefore, what is presented in this report is a progress report of the persistence rate of the 2010 cohort with an additional year still to track. The 2010 cohort consist of 612 students who met the definition as outlined by CPE. Cohort 2010 persistence rates may be viewed in Table 8.

Table 8: Persistence Rate for the 2010 Cohort

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What the Data Tells Us?

Kentucky State University (KSU) has not performed well in its persistence rates for the 2009 and 2010 cohorts. However, through a reclamation project, KSU has identified and guides students through Project Graduate to complete their degrees and continues to do so. The current persistence rates of 26.2% for the 2009 cohort and 22.5% for the 2010 cohort are undesirable and KSU is working to improve its persistence and graduation rates through the use of numerous retention tools. However, these tools have not been designed in a way that works collaboratively towards the goal of graduation. Neither have they been structured to demonstrate accountability in their impact on persistence and graduation rates.

Recommendations

A comprehensive review of the academic support resources is underway at KSU. This review will lead to a re-visioning and strategic planning process for these resource areas. The results expected are that the institution will demonstrate accountability and impact on the persistence and graduation rates of its students by providing a more systematic and substantive support network for students at KSU.

Staffing, pooling of resources, logistics and systematic interventions will be the foundation of this re-engineered student academic support services program.

The Office of Academic Affairs is working with the Office of Student Affairs to reclaim students who have left the university and have the potential to be able to complete their degrees in the necessary 6 years for the 2009 & 2010 cohorts. If successful, this effort could improve the persistence and graduation rates for these cohorts. Further, we are implementing the same efforts with the 2011-14 cohorts to improve the persistence and graduation rates.

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APPENDICIES

A Delaware Cost Study (DCS) Kentucky Participants

B Delaware Cost Study (DCS) Information

C DCS Sample Data Reports

D Southern Association of Colleges and Schools Standard 3.5.4

E Faculty who have Participated in Recruitment Events

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A Delaware Cost Study (DCS) Kentucky Participants

Asbury College

Eastern Kentucky University

Lindsey Wilson College

Morehead State University

Northern Kentucky University

University of Kentucky

University of Louisville

University of the Cumberland

Western Kentucky University

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B Delaware Cost Study (DCS) Information

A Data-Centered Approach to Managing Instructional Costs and Enhancing Faculty Productivity

Michael F. Middough

Assistant President for Institutional Research and Planning

University of Delaware

National Director

Delaware Study of Instructional Costs and Productivity

The Delaware Study

Over the past decade has grown and matured from small beginnings into a major data-sharing consortium of close to 400 colleges and universities that have elected to participate since its inception.

It is the tool of choice for benchmarking data on faculty teaching loads, instructional costs, and externally funded research and service activity, all at the academic discipline level of analysis.

The Delaware Study

- Begun in 1992 with initial participant pool of 15 research universities, 16 doctoral universities, and 65 comprehensive and baccalaureate institution.

Today, the participant pool in any given year embraces 50+ research universities, 30+ doctoral universities, 60+ comprehensive institutions, and 30+ baccalaureate colleges. (Note that the Delaware Study continues to employ the 1995 Carnegie Institutional Taxonomy).

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C DCS Sample Data Reports

Teaching Load Data

Undergraduate Student Credit Hours Taught per FTE T/TT Faculty

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Science Department

Total Student Credit Hours Taught per FTE T/TT Faculty

Total Class Sections Taught per FTE T/TT Faculty

Total Student Credit Hours Taught per FTE Faculty (All Categories)

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Science Department (continued)

Direct Instructional Expenditures per Student Credit Hour

Separately Budgeted Research and Service Expenditures per FTE T/TT Faculty

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D Southern Association of Colleges and Schools Standard 3.5.4

3.5.4 "At least 25 percent of the course hours in each major at the baccalaureate level are taught by faculty members holding an appropriate terminal degree—usually the earned doctorate or the equivalent of the terminal degree. (Terminal degrees of faculty)") (Institutional credits for a degree)

The Principles of Accreditation: Foundations for Quality Enhancement. (2011) 5^{th} edition. Pages 29-30.

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E Faculty who have Participated in Recruitment Events

1. Abdul Turay
2. Abdullah Alhurana
3. April Pilcher
4. Arthur Hayden
5. Beverly Downing
6. Chi Shen
7. Cortrell Davis
8. Dantrea Hampton
9. Egbunam Amadiefe
10. Fred Sheffler
11. Gashaw Lake
12. Ibukun Amusan
13. Indira Tyler
14. Irma Johnson*
15. James Obielodan
16. John Sedlacek
17. Karen Heavin
18. Ken Andries
19. Lori Davis
20. Michael Kosonga
21. Patricia Higgins
22. Rene Desborobe
23. Robert Durborow
24. Roosevelt Shelton
25. Sandra Birch*
26. Scott Treadway
27. Shannon Brogan
28. Stephen Graham-Hill
29. Sylvia Mason
30. Tierra Freeman
31. Vicky Moore
32. Wasim Al-Hamdani *Staff Members

*Staff Members

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LIST OF TABLES

1 Enrollment by Major – Fall 2014 2 Percentage of Faculty by Degree Level 3 Faculty to Student Ratio by Program Fall 2014 4 Full-Time Equivalent Faculty (FTFE) Coverage of Service Courses Fall 2014 5 Student and Faculty FTE Calculations Including Required General Education Courses 6 Jointly Recruited Students Admitted for Spring 2014 7 Persistence Rate for the 2009 Cohort 8 Persistence Rate for the 2010 Cohort

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Kentucky State University

Board of Regents Meeting

Finance Committee

January 22, 2015

Regent LaVaughn Henry, Chairperson Regent David Guarnieri Regent Syamala Reddy Regent Chuck Whitehead

（1）

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance Committee January 22, 2015 2:30 p.m. to 4:00 p.m. Board Room – Academic Services Building Frankfort, Kentucky

MEETING INDEX

• B1 Minutes of October 24, 2014
• B2 Executive Summary
• B3 Unaudited Comparative Financial Statements
• B4 English as a Second Language Program Fees
• B5 A-133 Report

（2）

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance Committee January 22, 2015 2:30 p.m. to 4:00 p.m. Board Room – Academic Services Building Frankfort, Kentucky

AGENDA

• I.Call to Order
• Regent LaVaughn Henry, Chairperson
• II.Roll Call
• III.Opening Remarks
• Regent Henry
• IV.Approval of Minutes
• Regent Henry
• V.Executive Summary Report
• VI.Informational Items:
• FY 2015 Budgeted vs. Actuals
• FY 2015 Unaudited Comparative Financial Statements
• VII Action Item: Approval of ESL Program Fees
• VIII Action Item: Approval of A-133 Report
• IX.Discussion
• X.Adjournment

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B1

Agenda Item Background

Background:

The minutes of the Finance and Audit Committees meeting for October 24, 2014 require approval in order to become an official part of the committee records.

Recommendation:

It is recommended that the Finance and Audit Committees approve the minutes of the October 24, 2014 joint meeting.

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance and Audit Committees October 24, 2014 10:30 a.m. Board Room – Academic Services Building Frankfort, Kentucky

MINUTES

Regent Charles Whitehead, in the absence of Regent LaVaughn Henry, Chairperson, called the joint Finance Committee and the Audit Committee meeting of the Kentucky State University Board of Regents to order at 10:34 a.m. on October 24, 2014. Regent Whitehead asked the secretary to call roll:

LaVaughn Henry Not Present Syamala Reddy Not Present

Karen Bearden Present Charles Whitehead Present

Mindy Barfield Present Ekumene Lysonge Present

David Guarnieri Present Travis Haskins Present

Elgie McFayden Present Breana L. Smith Not Present

Elaine Farris Present

A quorum was declared.

I. Approval of Minutes

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

Regent Whitehead recognized Mrs. Martin to carry the discussion forward.

II. Vice President's Report

Executive Summary Narrative

Deborah Martin, Interim Vice President Finance, gave an overview of the Executive Summary. Ms. Martin stated that on the revenue side the fall tuition has a shortfall of $1.66 million versus budgeting, fall housing shortfall about a half million dollars and student tuition/fees is down $2.8 million from prior years. On expenditures to date we have gone through 25% of the budget, expenditures are at 20.56% of the approved budget. She stated that we have an operating loss as of September 2014 of $2.7 million versus $1.4 million in 2013 and an increase in net assets of $8 million versus $8.9 million in 2013. Regent Whitehead questioned

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as to how we are going to make up the shortfall. President Burse stated that he had a budget reduction plan that he would give to the Board in the afternoon session. The President instructed Ann Knotts, Director Budget Policy and Planning to distribute copies of the reforecasted budget plan to the committee. Regent Guarnieri inquired as to what the difference was between the $2.1 million and $813,644 in other sources listed under other revenue in the reforecasted budget plan. Ms. Knotts stated that it consisted of indirect costs recovery, nursing lab fees, homecoming fees, scholarships through endowments and student activity fees. She stated that with enrollment going down these will also go down.

Regent Whitehead inquired if 235 is the number of students we are going to lose because they were unable to pay their first installment. President Burse stated that the 235 students are those who were on a payment plan but didn't make their first installment. Mrs. Martin stated that she had just received an updated number this morning. She further stated that the Bursar's Office worked with Enrollment Services and Residence Life to notify students who were on a payment plan but didn't make their first installment and students who had their payments returned by the bank. President Burse referred to the financial plan that was distributed and stated the $1.6 million is the amount owed by students with PIO's and the $2 million is the amount owed by students without PIO's. He said he had Ms. Knotts add in the $3 million which leaves a $6.7 deficit to show what the potential could be. He further stated that we are collecting some of the money even as we speak.

Regent Whitehead asked about the agreement with the state to assist with some of the collection. President Burse stated there has not been a single account sent to them. Regent Guarnieri stated that they were told the first 80 or 120 had been sent. President Burse said he had a meeting with the Revenue Cabinet Secretary. One of the problems was that our data feed and their data feed didn't match and then they changed their system. The Revenue Commissioner has agreed to help us get in the front of the line when their system gets turned back on. KCTCS will assist us in making certain our data is in the proper format so it can be received by Revenue and Revenue has agreed that we will become their priority. Ms. Martin stated that Revenue has contacted our IT department.

Regent Whitehead inquired if the $800,000 expenditure allowed for bad debt was large enough. Ms. Martin stated that they were going to review bad debt expenses quarterly instead of annually as had been done in the past.

III. Audit

Crissy Fiscus, Director of Assurance Services with Dean Dorton Allen Ford provided an overview of the 2014 audit. She stated that total assets are roughly $124.4 million and has declined from prior year by roughly five million dollars, total liabilities are consistent with the prior year and the total net position is $110 million. She also stated that total overall operating revenue was $38.7 million and total operating expenses were $73.3 million. She also informed the committee that due to recent pronouncements and a GASB amendment, going forward the University's portion of state pension liabilities will have to be reported in the financial statements.

Ms. Martin stated that the annual closing package and audit reports were submitted to the Finance and Administration Cabinet on October 15th.

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IV. AUDIT COMMITTEE - External Audit Report

President Burse directed the Board members to the External Audit Report of Tronconi Segarra and Associates that was included in the Board package. He stated that the report lays out what they are going to do and that findings are not reported. Per the President, in his conversation with the auditor he was told that the process and procedure has been as they audit they collect findings and share with the university staff to get a response, collect all of them and then give them to the President and at that point they are provided to the Board. President Burse stated he told the auditors that he never knew of any audit process that worked that way. He further stated that going forward the process and protocol will be different. He informed the auditors that as findings are found they should be shared with the Board at that point in time and then given to staff and administrators to address the findings. President Burse informed the committee that the auditors will be on campus next week and when they are finished with the findings they will share them with him and he will immediately share them with the Board so that they will be getting real time information.

Melinda Impellizzeri, Special Assistant to the President, gave a summary of the Preliminary Audit Report of Tronconi Segarra and Associates. Ms. Impellizzeri stated that she, Mrs. Martin and Mrs. Conner uncovered quite a few observations with the reconciliation of student balances while trying to better understand the shortfall. She stated that there seemed to be gaps between processing in various functions. This information was shared with President Burse with a request to have the external auditors perform a special audit. Ten students were randomly chosen for the Special Audit and the audit findings show in every area a lack of processes, unknown processes, missing processes and contradictory processes. Ms. Impellizzeri stated that as directed by President Burse we have undertaken a project to process map every area, re-educate everyone in the university and make sure it is an integrated process so we no longer work in silos and that we are supporting the goals of the university. Ms. Impellizzeri informed the committee that the auditor's full report will be delivered next week which will include examples of process findings and recommendations.

President Burse spoke about several issues with the Banner system. He informed the committee that work on the contract with Banner had been initiated but we are at an impasse as Ellucian has refused to include in the contract a provision which states what Ellucian advertises as the capabilities of Banner. President stated that we are struggling through with Banner but at the same time we are looking at other vendors and possibly what they have will cost us a fraction of what we were going to pay Ellucian to fix Banner.

Regent Barfield inquired as to the arrangement we have with Tronconi Segarra and Associates. President Burse stated that we have a one year personal services contract with them that ends June 30th and can be terminated at any time with a 30 day notice.

V. Approval of Minutes

Action: Motion to approve the minutes from the July 25, 2014 Audit Committee was made by Regent Farris and seconded by Regent Whitehead. The minutes

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stand approved as presented.

Approval of External Audit Report

Action: Motion to approve the External Audit Report was made by Regent Bearden and seconded by Regent Haskins. The motion passed.

VI. Adjournment

Motion to adjourn the Finance and Audit Committees was made by Regent Whitehead and seconded by Regent Guarnieri. The Finance Committee and the Audit Committee adjourned at 11:30am.

（ 8 ）

B2

Agenda Item Background

To: Board of Regents Finance Date: January 22, 2015

From:

Subject: Executive Summary

Reason for Consideration: Informational Item Enclosures: Yes

Background:

Please see attached.

Recommendation:

[ 9 ]

KENTUCKY STATE UNIVERSITYBOARD OF REGENTS

Report to the

Finance Committee

January 22, 2015

10

KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance Committee January 22, 2015 2:30 p.m. to 4:00 p.m. Board Room – Academic Services Building Frankfort, Kentucky

Fiscal 2015 Budget vs. Actual and Financial Statements (unaudited)

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

Audit Update

Dean|Dorton|Allen|Ford has completed the work on KSU's annual A-133 audited financial statements. This item is presented in the Audit Committee agenda as an action item.

Inventory

A physical inventory of University fixed assets was started in November 2014. No physical inventory was taken during the month of December. To meet full inventory completion, a weekly schedule has been established through March and additional resources have been allocated. To date, nine of sixty-four buildings have been completed.

Enrolled Students

Students previously enrolled in the 12-month Payment Installment Option and who were current on their payments are able to add their Spring 2015 balances to their current plan with monthly payments adjusted accordingly. As of December 17, 2014, there were 249 students who had a balance remaining on their 12 month payment plan, with a total amount due of $827,292.

All other students were required to pay their prior balance in full before registering for Spring 2015. These students were offered a 4-month Payment Installment Option, with the first payment due on January 17, 2015, and the final payment due on April 17, 2015. To be eligible for the payment plans, a student must have paid fifty percent (50%) of their Spring balance.

Calendar Year 2014 W-2's

The Payroll Office will mail out calendar year 2014 W-2s on or before January 30, 2015.

Other Items

1099's and 1098-T's for calendar year 2014 will be mailed on or before January 30, 2015.

11

B3

Agenda Item Background

Background:

The comparative Statement of Net Position (SNP), Statement of Revenues, Expenses and Changes in Net Position (SRECNP) as well as the Statement of Cash Flows (SCF) as of December 31, 2014 and 2013, respectively. The following are specific key points related to the December 2014 and 2013 financial statements.

Statement of Net Position

• Accounts Payable and Accrued Liabilities went up by $524K which is due in large part to a change in the timing of financial statement preparation where now an accrual entry is required for payroll whereas in the past no payroll accrual entry was necessary. The financial statements were prepared after payroll was posted.

Statement of Revenues, Expenses and Changes in Net Position

Revenues

• Student Tuition and Fees totaled $13.6M of which $6M is for Spring Assessment.
• Dining Revenue was $1.95M of which $735K is for Spring Assessment.
• Residence Halls Revenue was $2.1M of which $819K is for Spring Assessment.
• Operating Revenue went up by $322K over the prior year which is due primarily to an increase of $263K in Indirect Cost Recovery and an increase of $57K in Other Tuition and Fee related items.

12

Expenses

• Academic Support went up by $305K over the prior year which is due primarily to an increase in Salaries and Benefits of $46K and an increase of $259K in Non-Capital Equipment, Major Renovations and Computer Equipment
• Institutional Support went up by $738K over the prior year which is due primarily to Bad Debt Expense of $735K. An increase in Salaries and Benefits of $281K and a decrease of other expenses of $278K net to the remaining change.

Non-Operating Revenues (Expenses)

• Investment Income went down by $2.96M which is due primarily to gains/losses. Realized Gain/Loss went up by $0.17M while Unrealized Gain/Loss went down by $3.1M.

Informational Item

13

Kentucky State University Budget vs. Actual Six months ending December 31, 2014 (Amounts shown in dollars)

14

Kentucky State University

Statement of Net Position (Unaudited)

___ ( 15 )

Kentucky State University

Statement of Cash Flows

Periods Ending December 31, 2014 and 2013

(Unaudited)

16

1

Kentucky State University

Statement of Cash Flows

Periods Ending December 31, 2014 and 2013

(Unaudited)

[

17

Kentucky State University

Statement of Revenues, Expenses and Changes in Net Position (By Function)

Periods Ending December 31, 2014 and 2013

(Unaudited)

[

18

1

Kentucky State University

Statement of Revenues, Expenses and Changes in Net Position (By Function)

Periods Ending December 31, 2014 and 2013

(Unaudited)

t

19

1

B4

Agenda Item Background

Background:

Kentucky State University has re-started its English-as-a-Second Language (ESL) program for the Spring semester 2015. KSU's ESL program will serve foreign students visiting the University for a month-long English intensive seminar. Course cost is proposed to be $3,650 per participant. The program fee would include course instruction, room and board.

KSU expects to have a minimum of twenty (20) students per seminar.

Recommendation:

Approval of the fee of $3,650 per student

Approval

t

20

B5

Agenda Item Background

Background: The A-133 Report is the audit of federal grants and programs at the University.

Recommendation: The recommendation is to accept the A-133 report.

t

21

CONTENTS

Pages

Report of Independent Auditors ..... 1 - 2 Management's Discussion and Analysis ..... 3 - 19 Financial Statements: Kentucky State University Statements of Net Position ..... 20 Kentucky State University Foundation, Inc. Statements of Financial Position ..... 21 Kentucky State University Statements of Revenues, Expenses and Changes in Net Position ..... 22 - 23 Kentucky State University Foundation, Inc. Statements of Activities ..... 24 - 25 Kentucky State University Statements of Cash Flows ..... 26 - 27 Kentucky State University Notes to the Financial Statements ..... 28 - 46 Kentucky State University Foundation, Inc. Notes to the Financial Statements ..... 46 - 54 Schedule of Expenditures of Federal Awards ..... 55 - 58 Notes to the Schedule of Expenditures of Federal Awards ..... 59 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ..... 60 - 61 Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by OMB Circular A-133 ..... 62 - 64 Schedule of Findings and Questioned Costs ..... 65 - 69 Summary Schedule of Prior Audit Findings ..... 70 - 77

Report of Independent Auditors

Members of the Board of Regents Kentucky State University Frankfort, Kentucky

Secretary of Finance and Administration Cabinet of the Commonwealth of Kentucky

Report on the Financial Statements

We have audited the accompanying financial statements of the business-type activities of Kentucky State University (the University) as of and for the years ended June 30, 2014 and 2013 and the related notes to the financial statements, which collectively comprise the University's basic financial statements as listed in the table of contents. We have also audited the financial statements of the Kentucky State University Foundation, Inc. (the Foundation), the University's discretely presented component unit, as of and for the years ended June 30, 2014 and 2013.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, based on our audits, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and discretely presented component unit of the University as of

106 W. Vine Street, Suite 600 • Lexington, KY 40507 • 859-255-2341 phone • 859-255-0125 fax 500 W. Jefferson Street, Suite 1400 • Louisville, KY 40202 • 502-589-6050 phone • 502-581-9016 fax

deandorton.com

June 30, 2014 and 2013, and the respective changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 3 through 19 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Kentucky State University's basic financial statements. The accompanying Schedule of Expenditures of Federal Awards as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the basic financial statements.

The accompanying Schedule of Expenditures of Federal Awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying Schedule of Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2014, on our consideration of the University's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University's internal control over financial reporting and compliance.

Dean Dorton Allen Ford, PLC

December 19, 2014

Lexington, Kentucky

2

KENTUCKY STATE UNIVERSITY Management's Discussion and Analysis

June 30, 2014

Introduction

Management’s Discussion and Analysis of Kentucky State University’s (the University) financial statements provide an overview of the financial position and activities of the University for the year ended June 30, 2014, with comparative information for the year ended June 30, 2013. This discussion has been prepared by management and should be read in conjunction with the financial statements and the notes thereto, which follow this section. The financial statements and related notes and this discussion and analysis are the responsibility of management.

Kentucky State University is a Commonwealth of Kentucky coeducational institution for higher education. The University's mission is to build on its legacy of achievement as a historically black, liberal arts, and 1890 land-grant university, afford access to and prepare a diverse student population of traditional and non-traditional students to compete in a multifaceted, ever-changing global society by providing student-centered learning while integrating teaching, research, and service through high-quality undergraduate and select graduate programs. Kentucky State University is committed to keeping relevant its legacy of service by proactively engaging the community in partnerships on civic projects driven by the objective of positively impacting the quality of life of the citizens of the Commonwealth.

Basis of Presentation

The annual financial report and statements include the University and Kentucky State University Foundation, a component unit of the University. Kentucky State University Foundation, Inc. (the Foundation) is a not-for-profit Kentucky corporation which was established to receive, invest and expend funds to promote and implement educational and developmental activities at Kentucky State University (the University). The Foundation is managed by a Board of Trustees independent from that of the University. The Foundation is supported primarily through contributions from alumni.

Financial Highlights

• The University's financial position at June 30, 2014, reflected total assets of $124.5 million and total liabilities of $14.5 million. Total net position was $110.0 million.
• Total assets decreased $5.2 million or 3.0%, primarily due to decreases in student accounts receivable (net of bad debt allowance), grant and loans receivables, capital assets, and cash and cash equivalents. Total liabilities decreased by $1.1 million or 7.3% primarily due to decreases in bond and lease obligations and in compensated absences. Total net position decreased $4.0 million, due to bad debt write-off.

3

KENTUCKY STATE UNIVERSITY Management's Discussion and Analysis, continued

June 30, 2014

Financial Highlights, Continued

• Unrestricted net position decreased $2.2 million, which the University reserves for spending in programs and other capital-related contingencies.
• The University classifies amounts earned on endowments as spendable or non-spendable in accordance with the endowment's donor stipulations. Nonexpendable restricted net assets represent amounts, which must be maintained in perpetuity. Expendable restricted net assets include endowment earnings that are spendable, consistent with the University's spending policy.
• Operating revenues were $38.7 million and operating expenditures were $73.7 million, resulting in a loss from operations of $35.0 million. Net non-operating revenues were $30.9 million, including $23.5 million in state appropriations, which, when combined with the loss from operations and capital appropriations, resulted in an overall decrease in net position of $4.0 million.

Using the Financial Statements

The University's Financial Statements consist of three financial statements: a Statement of Net Position (Balance Sheet); a Statement of Revenues, Expenses and Changes in Net Position (Income Statement); and a Statement of Cash Flows, along with the accompanying Notes to the Financial Statements. These financial statements are prepared in accordance with Governmental Accounting Standards Board (GASB) Statement No. 35, Basic Financial Statements – and Management's Discussion and Analysis – for Public Colleges and Universities.

Kentucky State University is a component unit of the Commonwealth of Kentucky.

Statement of Net Position

The Statement of Net Position presents the financial position of the University at the end of the fiscal year and includes all assets and liabilities. Net position, the difference between total assets and total liabilities, is an important indicator of the current financial condition, while the change in net position is an indicator of whether the overall financial position has improved or worsened during the year.

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KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

Condensed Statement of Net Position

Assets: As of June 30, 2014, total assets amounted to 124.5 million. Of this amount, investment in capital assets (net of depreciation) of 80.7 million, or 64.8% of total assets, represented the largest asset class. Investments amounted to 15.3 million or 12.3% of total assets. During the year, total assets decreased by 5.2 million, primarily due to decreases in student accounts receivable (net of bad debt allowance), grant and loans receivables, capital assets, and cash and cash equivalents.

Liabilities: As of June 30, 2014, total liabilities amounted to 14.5 million. Long-term debt includes bonds payable for housing and dining system and energy-related equipment and technology equipment purchased under a Master Lease Agreement. During the year, total liabilities decreased by 1.1 million, primarily due to decreases in bond and lease obligations and in compensated absences.

Net Position: Net position of the University was $110.0 million at June 30, 2014 and was reported in four net position categories: invested in capital assets, net of related debt $73.3 million (66.6%), restricted nonexpendable $8.6 million (7.8%), restricted expendable $5.8 million (5.3%), and unrestricted $22.3 million (20.3%).

5

KENTUCKY STATE UNIVERSITY Management's Discussion and Analysis, continued

June 30, 2014

Statement of Revenues, Expenses and Changes in Net Position

The Statement of Revenues, Expenses and Changes in Net Position is prepared on the accrual basis of accounting, whereby revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the service, regardless of when cash is exchanged. All items that increase or decrease net position must appear on the Statement of Revenues, Expenses and Changes in Net Position as revenues, expenses, gains or losses.

Financial activities are reported as either operating or non-operating. GASB Statement No. 35 requires state appropriations, gifts, investment income and endowment income to be classified as non-operating revenues. Accordingly, the University reports an operating loss prior to the addition of non-operating revenues. The utilization of long-lived capital assets is reflected in the financial statements as depreciation, which amortizes the cost of an asset over its expected useful life. Tuition revenue is reduced by gift scholarships and institutional aid, and is reported net of scholarship allowances in the financial statements. A summarized comparison of the University's revenues, expenses and changes in net position for the years ended June 30, 2014 and June 30, 2013 is as follows.

6

KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

Condensed Statement of Revenues, Expenses and Changes in Net Position

7

KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

FY 2014 Operating Revenues as a percentage of total Operating Revenue

Operating Revenue

Total operating revenues were $38.7 million for the year ended June 30, 2014, a decrease of $1.1 million compared to FY13. The primary components of operating revenue were federal, state and local grants and contracts of $8.2 million (21.2%) student tuition and fees, net, of $16.5 million (42.6%), federal appropriations of $6.7 million (17.4%) and auxiliary services and other revenues of $7.3 million (18.8%). FY14 Student tuition and fees revenue decreased $124 thousand compared to FY13. FY14 Grants and contracts revenue decreased $948 thousand compared to FY13 due to decreased awards and spending. FY14 Federal appropriations decreased $151 thousand compared to FY13. FY14 Auxiliary services and other revenue decreased $95 thousand compared to FY13. Refer to Figure 1 for the three year trend of the operating revenues as a percent to total operating revenues and revenue by category.

9

KENTUCKY STATE UNIVERSITY Management’s Discussion and Analysis, continued

June 30, 2014

Operating Expenses

Operating expenses totaled $73.7 million, an increase of $2.5 million over last year. Of this amount, $42.6 million (57.8%) was expended directly for the primary mission of the University – instruction (17.3%), research (7.5%), student services (9.9%), student aid (12.5%), and public service (10.6%). Instruction is the main component of Primary Mission expenses amounting to $12.8 million in fiscal year 2014 or 17.3%. Refer to Figure 2 for the operating expenses categorized into the Primary Mission of the University. (Percentages below do not include depreciation or operations/maintenance allocations.)

Figure 2

10

KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

In addition to the Primary Mission expenses of the University, there are expenses from depreciation and operations & maintenance that are allocated to the various functional classifications (See note 12 – Schedule of Expenses by Program). See below for the operating expenses categorized into the Functional Expenses of the University. (Percentages below include depreciation and operations/maintenance allocations.)

Fiscal Year 2014 Functional Expenses as a % of Total Operating Expenses

The University continued to invest in student aid and support services to provide students with opportunities to be successful in fiscal 2014. For the year ended June 30, 2014, student aid related to tuition and fees totaled $8.3 million, with student aid expenses of $9.2 million and scholarship allowances of $4.9 million.

The University had an overall increase in institutional support of $4.2 million, which was mainly due to the increase in bad debt expensed during the fiscal year. The large expenditures in the primary areas of instruction, research and student services, in conjunction with minimal increases to fixed cost areas, confirms the University resource allocations are clearly aligned with the University's strategic priorities to support academic and student excellence.

The net loss from operations for the year amounted to $35.0 million. Non-operating revenues, net of expenses, amounted to $30.9 million, resulting in a decrease in income before other revenues, expenses, gains or loss of $4.0 million for the year. Non-operating revenues include state appropriations of $23.5 million, non-operating federal grants and contracts of $5.9 million, gifts of $13 thousand and investment income of $1.7 million, and other non-operating income net of revenue of $71 thousand.

Statement of Cash Flows

The Statement of Cash Flows presents information related to the University's cash inflows and outflows summarized by operating activities, noncapital financing activities, capital financing activities and investing activities. The primary purpose of the Statement of Cash Flows is to provide information about the cash receipts and cash payments made by the University during the year, to allow financial statement readers to assess the University's ability to generate future net cash flows, its ability to meet obligations as they become due and its possible need for external financing.

11

KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

Condensed Statement of Cash Flows

Cash and Investments

Major sources of cash received from operating activities are student tuition and fees of $18.4 million and grants and contracts of $15.5 million. Major uses of cash for operating activities were payments to employees for salaries and benefits of $37.4 million and to vendors and contractors of $23.5 million.

Noncapital financing activities included state appropriations from the Commonwealth of Kentucky of $23.5 million.

Capital and related financing activities include purchases and payments of $3.0 million expended for construction and acquisition of capital assets and for principal and interest payments on the retirement of the University's bonds and other capital related debt.

Net cash of $101 thousand was spent for conducting investing activities, including purchase and sales of investments, and interest and dividends earned on investments. Investment activity was primarily related to management of the University's endowments.

12

KENTUCKY STATE UNIVERSITY Management’s Discussion and Analysis, continued

June 30, 2014

State Appropriations

State appropriations represent approximately 33.8% of all operating and non-operating revenues. The level of state support is a key factor influencing the University's overall financial condition. State appropriation is unrestricted to revenue and is included as non-operating revenue. State appropriation is used to support payroll and benefits for University employees.

The following details the net Commonwealth appropriations received by the University for fiscal years ending June 30, 2014, 2013 and 2012.

Capital Appropriations for the Commonwealth

The University faces financial challenges to maintain and upgrade its capital assets including its infrastructure, buildings and grounds. A combination of revenue sources funds the University's investment in capital improvements, including appropriations provided by the Commonwealth of Kentucky. In fiscal year 2014, the Commonwealth provided no capital appropriations to the University. State capital appropriations plus federal sources play an important role in the University's efforts to address deferred maintenance projects.

Grant and Contract Revenue

The following table details the University's grant and contract revenue for fiscal years ended June 30, 2014, 2013 and 2012.

13

KENTUCKY STATE UNIVERSITY Management’s Discussion and Analysis, continued

June 30, 2014

Capital Plan

During fiscal year 2014, Kentucky State University started construction on the Dr. Cheaney Legacy Plaza. Design of several construction projects started: Old Federal Bldg. Restoration / Renovation Phase II (Aquaculture KY River Interpretive Center); Renovate Atwood Agriculture Research Bldg.; and Privatized Housing. The University completed a roof replacement project for Alumni Stadium Office and Locker Bldg. In addition HVAC improvements were made to the Ceramics Classroom in Shauntee Hall; hallways and stairwells were painted and floor tile replaced in Shauntee Hall.

The execution of the University's capital plan is contingent upon sufficient funding from the Commonwealth. The Kentucky General Assembly during the 2014 regular session approved state bond funding for one project out of the University submitted Six Year Capital Plan. State Bond Funds of $10,400,000 was approved for "Repair Boilers and Aging Distribution Lines". This project will replace boilers and repair a portion of the existing steam plant system.

New construction projects proposed and only authorized for expenditure of KSU Restricted Funds include: $9 million to expand or build a new Betty White Nursing Building, which will provide 19,800 square feet of new classroom space to accommodate enrollment into the nursing program; $46.4 million to construct a centralized boiler plant to replace the existing seventy year old plant; $31.5 million to construct a Business & Technology Center to house the business school and the computer science program; $96 million to build a Performing Arts Center to replace antiquated Bradford Hall. Maintenance projects include but are not limited to: Roof Repair & Maintenance Pool; $3.4 million and a $1.5 million Capital Renewal & Maintenance Pool. Information Technology projects include but are not limited to: Integrated Digital Campus $11.4 million; Expand Emergency Notification System $4.5 million; Upgrade Information Technology Infrastructure $6.2 million.

Major capital-related needs and issues facing the university with its aging facilities was documented in the 2007 VFA Facility Condition Assessment and Space Study. The process used for determining the 2014-2020 priorities was enhanced by utilization of the 2008 Campus Master Plan Update and the information gathered as part of that effort as well as the VFA findings. These two initiatives are the framework of the 2014-2020 Capital Plan. The Capital Planning and Construction Division, the Facilities Services Division, and the Information Technology Division collaborated to establish initial priorities for the plan. Priorities were further refined when Cabinet-level administrators and the President reviewed the project list linked to specific University initiatives.

14

KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

Designated and Non-designated Spending

In the tables below, expenses have been categorized into designated or non-designated spending categories. The designated spending category includes funds expended by function from contracts and grants, land grant, auxiliary and depreciation. These funds must be expended for the purposes for which the funds were received or budgeted. This category also includes funds for student aid. All other spending is categorized as non-designated spending. Total spending for all functions in the non-designated category increased by approximately $3.5 million in 2014, primarily due to the increase in recognizing bad debt expense in the institutional support category.

15

KENTUCKY STATE UNIVERSITY

Management's Discussion and Analysis, continued

June 30, 2014

The graph in Figure 3 shows a three year trend of designated, non-designated, and combined spending. Non-designated spending is higher than designated spending in FY14. However, designated spending decreased $1.0 million in both 2013 and 2014. Non-designated spending decreased $4.2 million in 2013 and increased $3.5 million in 2014. Overall, the combined spending followed the same trend as designated spending with a decrease of $5.2 million in 2013 and increase of $2.5 million in 2014.

16

Management's Discussion and Analysis, continued

June 30, 2014

Capital Asset and Debt Administration

Capital Assets

Capital assets, net of accumulated depreciation, totaled $80.7 million at June 30, 2013, a decrease of $2.5 million. Capital assets as of June 30, 2014 and significant changes in capital assets during the year are as follows (in millions):

At June 30, 2014, the University has capital construction projects in progress totaling $970,250 in scope.

Long Term Debt

At June 30, 2014, bonds and lease payable amounted to $7.3 million, as summarized below:

18

KENTUCKY STATE UNIVERSITY Management’s Discussion and Analysis, continued

June 30, 2014

Economic Factors Impacting Future Periods

University management continues its strategic mission to uniquely position Kentucky State University as Kentucky's small public liberal arts institution of excellence for the citizens of the Commonwealth and for advancing higher education in Kentucky by inspiring innovation, growing leaders and advancing Kentucky. Executive management continues to work with the Council on Postsecondary Education to address the needs of the Commonwealth and believes it is positioning the University to become a strong, financially viable and efficient institution of higher learning.

Future economic factors impacting Kentucky State University include the following known facts:

• Tuition and costs of attendance—Kentucky State University continues to weigh its costs of attendance with the funding provided by the General Assembly to successfully deliver its programs and remain one of the most affordable public institutions in the Commonwealth. Funding levels and methodologies used for institutions of higher education in the Commonwealth are developed and approved by the Council on Postsecondary Education.
• Enrollment growth and student retention—Kentucky State University recruits a diverse student body of traditional, nontraditional and transfer students seeking baccalaureate and advanced degrees. Enrollment stabilization is a priority of University management and specifically, an increased strategy for recruiting in-state students.
• Program expansion—the University is well positioned to meet the needs of Kentuckians through its programs and educational activities. The University offers the following programs: Bachelors in Mass Communications and Journalism, a Masters of Arts in Special Education, and a Masters in Business Administration, a Masters in Public Administration, a Masters in Computer Science, a Masters in Environmental Studies, a Masters of Science in Interdisciplinary Behavioral Studies and soon, a Doctorate in Nursing Practice.
• Regional Stewardship—Kentucky State University continues to meet the economic and community needs of its area of geographic responsibility through collaborative initiatives with businesses, community-based organizations, schools and other educational agencies, citizens and local and state officials.
• Land Grant – Kentucky State University continues to fulfill its mission as a land grant institution providing innovative research opportunities on its research vessel, the Kentucky River Thorobred and community based extension through the Rosenwald Center for Families and Children
• State Funding Model – On January 16, 2013, Moody’s Investor Service downgraded its outlook for the entire US higher education sector to negative. The state is being forced to innovate and come up with strategies for getting better results with less money. One of the strategies is the idea of tying state education allocations to performance metrics instead of enrollment.

The overall financial position of the University was stable during fiscal year 2014. Revenue streams were stressed. As the University adapts to present economic environments, new opportunities for funding will be explored to complement state support. Executive management's goal is to deliver exceptional programs and services to students and constituents while maintaining financial stability. Management believes Kentucky State University is able to sustain its financial position and solidify its being a regional university of excellence.

19

KENTUCKY STATE UNIVERSITY

Statements of Net Position

June 30, 2014 and 2013

See accompanying notes.

20

KENTUCKY STATE UNIVERSITY FOUNDATION, INC.

Statements of Financial Position

June 30, 2014 and 2013

See accompanying notes.

21

KENTUCKY STATE UNIVERSITY

Statements of Revenues, Expenses and Changes in Net Position

Years ended June 30, 2014 and 2013

See accompanying notes.

22

KENTUCKY STATE UNIVERSITY

Statements of Revenues, Expenses and Changes in Net Position, continued

Years ended June 30, 2014 and 2013

See accompanying notes.

23

KENTUCKY STATE UNIVERSITY FOUNDATION, INC.

Statement of Activities

Year ended June 30, 2014

See accompanying notes.

24

KENTUCKY STATE UNIVERSITY FOUNDATION, INC.

Statement of Activities

Year ended June 30, 2013

See accompanying notes.

25

KENTUCKY STATE UNIVERSITY

Statements of Cash Flows

Years ended June 30, 2014 and 2013

See accompanying notes.

26

KENTUCKY STATE UNIVERSITY

Statements of Cash Flows, continued

Years ended June 30, 2014 and 2013

See accompanying notes.

27

KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements

1. Organization and Summary of Significant Accounting Policies

Reporting Entity

Kentucky State University (the University) is a component unit of the Commonwealth of Kentucky and is included in the general-purpose financial statements of the Commonwealth. The Kentucky State University Foundation, Inc. (the Foundation) is a legally separate, tax-exempt organization supporting the University. The Foundation acts primarily as a fund-raising organization to supplement the resources that are available to the University in support of its programs. The Foundation's Board of Directors is self-perpetuating and consists of graduates and friends of the University. Although the University does not control the timing or amount of receipts from the Foundation, the majority of resources or income thereon that the Foundation holds and invests is restricted by the donors to the activities of the University. Because these restricted resources held by the Foundation can only be used by, or for the benefit of, the University, the Foundation is considered a component unit of the University and is discretely presented in the University's financial statements.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB), including Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments, and Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis of Public College and Universities, issued in June and November, 1999, respectively. The University reports as a Business Type Activity (BTA), as defined by GASB Statement No. 35. BTA's are those activities that are financed in whole or in part by fees charged to external parties for goods and services. The University, as a BTA, has adopted GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Therefore, the University follows GASB pronouncements and all Financial Accounting Standards Board pronouncements except those that conflict with or contradict GASB pronouncements.

Basis of Accounting

The financial statements have been prepared on the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when an obligation has been incurred.

GASB Statement No. 35 establishes standards for external financial reporting for public colleges and universities and requires that resources be classified for accounting and reporting purposes into the following net asset categories:

• Invested in capital assets, net of related debt: Capital assets, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction or improvement of those assets.

28

KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

1. Organization and Summary of Significant Accounting Policies, continued

Basis of Accounting, continued

Restricted:

Nonexpendable – Net position subject to externally imposed stipulations that they be maintained permanently by the University. Such position include the University's permanent endowment funds.

Expendable– Net position whose use by the University is subject to externally imposed stipulations that can be fulfilled by actions of the University pursuant to those stipulations or that expire by the passage of time.

Unrestricted: Net position whose use by the University is not subject to externally imposed stipulations. Unrestricted net position may be designated for specific purposes by action of management or the Board of Trustees or may otherwise be limited by contractual agreements with outside parties.

The financial statement presentation required by GASB Statement No. 35 is intended to provide a comprehensive, entity-wide perspective of the University's assets, liabilities, net position, revenues, expenses, changes in net position and cash flows.

Cash Equivalents

For the Statement of Cash Flows, the University considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts, Grants, and Loans Receivable, net

Accounts receivables consist of tuition and fee charges, loans to students and amounts due from federal and state governments, non-governmental sources, in connection with reimbursements of allowable expenses made pursuant to grants and contracts. Accounts receivables are recorded net of allowance for doubtful accounts.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is established through a provision for doubtful accounts charged to expense. The allowance represents an amount, which, in management's judgment, will be adequate to absorb probable losses on existing accounts that may become uncollectible.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or market and consist of physical plant items. Inventories consist of physical plant, postage and printing supplies.

29

KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

1. Organization and Summary of Significant Accounting Policies, continued

Endowment Funds

Kentucky State University recognizes its fiduciary duty not only to invest the University's endowment holdings in formal compliance with the Uniform Prudent Management of Institutional Funds Act (UPMIFA) but also to manage those funds in continued recognition of the basic long-term nature of the University. The University interprets this to mean, in addition to the adopted spending guidelines and restrictions described below, that the assets of the University shall be actively managed, that is, investment decisions regarding the particular securities to be purchased or sold shall be the result of the conscious exercise of discretion. The University recognizes that, commensurate with its overall objective of maximizing long-range return while maintaining a high standard of portfolio quality and consistency of return, it is necessary that proper diversification of assets be maintained both among and within the classes of securities held. Within this context of active management and the necessity of adherence to proper diversification, the University relies upon appropriate professional advice.

The University recognizes that long-term objectives are most important, but it is also necessary that shorter-term benchmarks be used to assess the periodic performance of the investment program. The University anticipates annual spending of five percent (5%) of the average market value for the past three years, the amount of which shall be determined in January of each year.

The University believes that it is prudent to diversify endowment investments so as to minimize the risks of large losses and has established asset allocation ranges based upon the University's participation demographics, anticipated cash flow requirements and the expected returns of the capital markets.

Investments

Investments are valued at fair value based on quoted market prices. Short-term investments are investments that are not cash equivalents but mature within the next fiscal year and are classified as current assets.

Capital Assets

Capital assets are stated at cost at date of acquisition or, in the case of gifts, at fair value at date of gift. Equipment with a unit cost of $2,000 or more and having an estimated useful life of greater than one year is capitalized. Renovations to buildings and infrastructure and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense is incurred.

Depreciation of capital assets is computed on a straight-line basis over the estimated useful lives of the respective assets. The University capitalizes, but does not depreciate, works of art and historical

30

KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

1. Organization and Summary of Significant Accounting Policies, continued

Capital Assets, continued

treasures that are held for exhibition, education, research and public service. Estimated lives used for depreciation purposes are as follows:

Compensated Absences

The liability and expense incurred for employee vacation and sick pay are recorded as accrued compensated absences in the statements of net position and as a component of compensation and benefit expense in the statements of revenues, expenses and changes in net position.

Unearned Revenue

Unearned revenue includes amounts received for tuition and fees prior to the end of the fiscal year but related to the subsequent reporting period. Unearned revenues also include amounts received from grant and contract sponsors and state deferred maintenance funds that have not yet been earned.

Income Taxes

The University is an agency and instrumentality of the Commonwealth of Kentucky, pursuant to Kentucky Revised Statutes sections 164.290 through 164.475. Accordingly, the University is generally exempt from federal income taxes as an organization described in Section 115 of the Internal Revenue Code of 1986, as amended. The Foundation has received a determination from the Internal Revenue Service granting exemption from federal income taxation pursuant to the provisions of the Internal Revenue Code section 501(c)(3).

Restricted Asset Spending Policy

The University's policy is that restrictions on assets cannot be fulfilled by the expenditure of unrestricted funds for similar purposes. The determination on whether restricted or unrestricted funds are expended for a particular purpose is made on a case-by-case basis. Restricted funds remain restricted until spent for the intended purpose.

31

KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

1. Organization and Summary of Significant Accounting Policies, continued

Operating Activities

The University defines operating activities, as reported on the statement of revenues, expenses and changes in net position, as those that generally result from exchange transactions, such as payments received for providing goods and services and payments made for services and goods received. Nearly all of the University's expenses are from exchange transactions. Certain significant revenues relied upon for operations, such as state and certain federal appropriations, gifts and investment income, are recorded as non-operating revenues, in accordance with GASB Statement No. 35.

Scholarship Discounts and Allowances

Financial aid to students is reported in the financial statements under the alternative method as prescribed by the National Association of College and University Business Officers (NACUBO). Certain aid, such as loans and funds provided to students awarded by third parties, is accounted for as third party payments (credited to the student's account as if the student made the payment). All other aid is reflected in the financial statements as operating expenses, or scholarship allowances, which reduce revenues. The amount reported as operating expenses represents the portion of aid that was provided to the student in the form of cash. Scholarship allowances represent the portion of aid provided to the student in the form of reduced tuition. Under the alternative method, these amounts are computed by allocating the cash payments to students, excluding payments for services, on the ratio of total aid to the aid not considered to be third party aid.

Federal Grants and Contracts

Per GASB Statement No. 24, pass-through grants should be reported as revenues and expenses in the financial statements if that entity has any administrative or direct financial involvement in the program. An entity has administrative involvement if it determines eligible secondary recipients or projects, even if using grantor-established criteria. Therefore, Pell Grants are considered non-exchange transactions and are recorded as non-operating revenues in the accompanying financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

1. Organization and Summary of Significant Accounting Policies, continued

Component Unit Disclosure

The accompanying financial statements of the Foundation have been prepared in accordance with accounting principles generally accepted in the United States of America as prescribed by the FASB. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features.

During the year ended June 30, 2014 and 2013, the Foundation made distributions of approximately $203,600 and $255,500 respectively, on behalf of the University for both restricted and unrestricted purposes. Complete financial statements for the Foundation can be obtained from the Kentucky State University Foundation, Inc. at P.O. Box 4210, Frankfort, KY 40604.

Recent Pronouncements

In November 2013, the GASB approved Statement No. 71, Pension transition for contributions made subsequent to the measurement date – an amendment of GASB Statement No. 68. The objective of this Statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement date of the government's beginning net pension liability. This Statement amends paragraph 137 of Statement 68 to require that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. Statement 68, as amended, continues to require that beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions be reported at transition only if it is practical to determine all such amounts. The provisions of this Statement are required to be applied simultaneously with the provisions of Statement 68.

In June 2012, the GASB approved Statement No. 68, Accounting and Financial Reporting for Pensions. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administers as trusts or similar arrangements that meet certain criteria. Statement 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits.

Cost-sharing governmental employers will also be required to report a net pension liability, pension expense and pension-related assets and liabilities based on their proportionate share of the collective amounts for all governments in the plan. All governments participating in the defined benefit pension plan would also have the following in their note disclosures:

• Descriptions of the plan and benefits provided
• Significant assumptions employed in the measurement of the net pension liability

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

1. Organization and Summary of Significant Accounting Policies, continued

Recent Pronouncements, continued

• Descriptions of benefit changes and changes in assumptions
• Assumptions related to the discount rate and impact on the total pension liability of a 1 percentage point increase and decrease in the discount rate
• Net pension assets and liabilities

The provisions of this Statement are effective for fiscal years beginning after June 15, 2014. The University is currently evaluating the effects of this statement on its financial statements.

In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities. This statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. This statement also provides other financial reporting guidance related to the impact of the financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the determination of the major fund calculations and limiting the use of the term deferred in financial statement presentations. The requirements of this statement were implemented as of June 30, 2014. This statement did not significantly affect the University's financial statements.

2. Cash, Cash Equivalents, and Investments

The statement of net position classification "cash and cash equivalents" includes all readily available sources of cash such as petty cash, demand deposits, certificates of deposit and temporary investments in marketable securities with original maturities less than three months.

At June 30, 2014 and 2013, the University had petty cash funds totaling zero, and deposits as reflected by bank balances as follows:

2014 2013

Insured, commercial banks 250,000 250,000

Uninsured, commercial banks; collateral held by pledging institution's agent in the University's name - 5,018,080

Maintained by Commonwealth of Kentucky, collateral held by the Commonwealth in the Commonwealth's name 19,298,591 15,926,887

$ 19,548,591 $ 21,194,967

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

2. Cash, Cash Equivalents, and Investments, continued

The difference in the cash carrying amount per the statement of net position and the above bank balances represented items in transit. At June 30, 2014 and 2013, the University had no cash and cash equivalents that are restricted for capital expenditures.

As of June 30, 2014, the University had the following investments and maturities:

Investment Maturities (in years)

As of June 30, 2013, the University had the following investments and maturities:

Investment Maturities (in years)

The University has an investment management agreement with Fifth Third Bank (Fifth Third). Fifth Third serves individual and institutional clients.

Credit Risk

The University's average credit quality rating according to Moody's is Aa3.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

2. Cash, Cash Equivalents, and Investments, continued

Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The University does not have a formal policy to specifically limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Concentration of Credit Risk

Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The University does not have a formal policy for concentration of credit risk.

Custodial Credit Risk

For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the University will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The University does not have a formal policy for custodial credit risk.

3. Accounts, Grants and Loan Receivable

Accounts, grants and loans receivable consist of the following as of June 30, 2014 and 2013.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

4. Capital Assets, Net

Capital assets as of June 30, 2014, are summarized as follows:

Capital assets as of June 30, 2013, are summarized as follows:

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

5. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of June 30, 2014 and 2013, are as follows:

6. Unearned Revenue

Unearned revenue consists of the following as of June 30, 2014 and 2013:

2014 2013

Unearned summer school tuition and fees $ 261,467 $ 390,665

Unearned grants and contracts $ 1,037,861 $ 889,413

$ 1,299,328 $ 1,280,078

7. Long-Term Liabilities

Long-term liabilities as of June 30, 2014, are summarized as follows:

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

7. Long-Term Liabilities, continued

Long-term liabilities as of June 30, 2013, are summarized as follows:

The outstanding General Receipts Bonds Series A Bonds have interest rates from 3.625% - 3.875%. The bonds mature through 2027. The reserve requirements for these issues have been fully funded as of June 30, 2014.

All bonds are collateralized by University property and the pledge of certain revenues, tuition and fees.

The net book value of assets acquired through the capital leases included in the above schedule totaled $4,013,670 and $4,362,446 as of June 30, 2014 and 2013, respectively.

In August 2009, the University signed a 10 year promissory note with the City of Frankfort, for the purchase of real property. The note and all current and prior payments were recognized and recorded as of June 30, 2013.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

7. Long-Term Liabilities, continued

The following is a schedule of future minimum payments required for the promissory note at June 30, 2014:

Year ending June 30,

2015 $ 50,000

2016

2017

2018

2019

Total $ 250,000

The principal and interest repayment requirements relating to the outstanding bonds payable at June 30, 2014, are as follows:

During 2005, the University entered into a capital lease for an energy management project. The lease obligation has an interest rate of 4.29% and requires annual payments of principal and interest through 2021. The lease obligation will be paid with guaranteed energy savings.

During 2014, the University entered into a capital lease for the purchase of four police vehicles. The lease is payable in 4 annual installments, of which the first was paid in 2014.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

7. Long-Term Liabilities, continued

The following is a schedule of future minimum payments required for the capital lease obligations at June 30, 2014:

Year ending June 30, $ 650,527

2015 650,527

2016 650,526

2017 616,792

2018 616,792

2019 1,233,585

Thereafter 4,418,749

Total minimum lease payments 621,845

Less: amounts representing interest $ 3,796,904

Present value of minimum lease payment $ 3,796,904

8. Operating Lease

The University leases computer equipment under operating leases, which expired and was renewed on August 1, 2014. Lease payments to the lessors under these leases totaled $122,016 and $125,232 for the years ended June 30, 2014 and 2013, respectively.

Minimum future lease payments are as follows:

2015 106,104

2016 69,794

175,898

9. Employee Benefits

Kentucky Teachers Retirement System

All faculty and exempt employees required to hold a degree and occupying full-time positions, defined as seven-tenths (7/10) of normal full-time service on a daily or weekly basis, are required by state law to participate either in the Kentucky Teachers Retirement System (KTRS) or the Optional Retirement Plan (ORP). KTRS, a cost sharing, multiple-employer, public employee retirement system, provides retirement

41

KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

9. Employee Benefits, continued

Kentucky Teachers Retirement System, continued

benefits based on an employee's final average salary and number of years of service. Benefits are subject to certain reductions if the employee retires before reaching age sixty, unless the employee has twenty-seven or more years of participation in the plan. The plan also provides for disability retirement, death and survivor benefits and medical insurance.

The Kentucky Teachers Retirement System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Kentucky Teachers Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601-3868 or by calling (502) 848-8500.

Funding for the plan is provided from eligible employees who contribute 7.16% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 14.84% of current eligible employees' salaries to the KTRS through appropriations to the University. Contribution requirements of the plan members and the University are established by Kentucky Revised Statute and the KTRS Board of Trustees. The University's contributions to KTRS for the years ended June 30, 2014, 2013 and 2012 were $2,483,138, $2,037,331, and $2,155,711, respectively, and equaled the required contribution for that year.

Kentucky Employees Retirement System

Substantially all other full-time University employees are required by law to participate in the Kentucky Employees Retirement System (KERS), a cost sharing multiple-employer, public employee retirement system. KERS provides retirement benefits based on an employee's final average salary and number of years of service. Benefits are subject to certain reductions if the employee retires before reaching age sixty-five, or less than twenty-seven years of service. The plan also provides for disability retirement, death and survivor benefits and medical insurance.

The Kentucky Employees Retirement System issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Kentucky Employees Retirement System, 1260 Louisville Road, Perimeter Park West, Frankfort, Kentucky 40601 or by calling (502) 564-4646.

Funding for the plan is provided from eligible employees who contribute 5.00% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 26.79% of current eligible employees' salaries to the KERS through appropriations to the University. Employees hired on or after July 1, 2008 contribute 6.00% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 26.79% to the KERS through appropriations to the University. The University contribution rates are determined by the Kentucky Revised Statute and the Board of Trustees of the Kentucky Retirement System each biennium. The University's contributions to KERS for the years ended June 30, 2014, 2013 and 2012 were $1,432,369, $1,218,234, and $1,041,753, respectively, and equaled the required contribution for that year.

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KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

9. Employee Benefits, continued

Health care and life insurance benefits are provided for eligible retired employees through the above pension plans. Expenditures for all employee benefits are included as expenditures within the appropriate functional areas.

Optional Retirement Plan

All faculty and exempt employees who are eligible to participate in the KTRS retirement plan may elect to participate in the Optional Retirement Plan (ORP) instead of KTRS. In doing so, the employee may choose both Teachers Insurance and Annuity Association of America, (TIAA-CREF) or The Variable Annuity Life Insurance Company (VALIC). Both offer a defined contribution, 403b plan.

TIAA-CREF is one of the largest and most respected financial service providers in the world (unaudited). TIAA-CREF Individual & Institutional Services, Inc. distributes CREF and TIAA Real Estate Account variable annuities. Teachers Personal Investors Services, Inc. distributes Personal Annuity variable annuities, TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds, and TIAA-CREF Tuition Financing, Inc. products. TIAA-CREF Trust Company, FSB, provides trust services. Located in New York, NY, Teachers Insurance and Annuity Association of America (TIAA) and TIAA-CREF Life Insurance Company issue insurance and annuities. Financial statements are available on the website, www.tiaacref.com.

VALIC is the marketing name for the family of companies comprising VALIC Financial Advisors, Inc.; VALIC Retirement Services Company; VALIC Trust Company; and The Variable Annuity Life Insurance Company (VALIC); which are all members of American International Group, Inc. (AIG).

Complete information about VALIC's variable annuities, including financial statements, fees, charges, expenses and contract limitations, can be obtained by visiting the website www.aigvalic.com or by calling 1-800-428-2542.

Funding for the ORP is provided from eligible employees who contribute 6.16% of their salary through payroll deductions and the Commonwealth of Kentucky, which also indirectly contributes 8.74% of current eligible employees' salaries to the ORP through appropriations to the University. The University's contributions to ORP for the years ended June 30, 2014, 2013 and 2012 were $554,207, $485,224, and $434,586, respectively, and equaled the required contribution for the year.

Effective July 1, 2010, KRS 61.546 states that the value of any accumulated sick leave that is added to the member's service credit in the KERS and KTRS on or after July 1, 2010 shall be paid to the retirement system by the last participating employer, based upon a formula adopted by the KERS and KTRS Boards. The KERS/KTRS sick leave liability as of June 30, 2014 and 2013 was $346,431 and $500,000.

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KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

10. Commitments and Contingencies

The University is a party to various law suits and other claims in the ordinary course of business. University officials are of the opinion, based upon the advice of legal counsel, that the ultimate resolution of these matters will not have a material effect on the financial statements of the University.

The University receives financial assistance from federal and state agencies in the form of grants and awards. The expenditure of funds received from these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audit could become a liability of the applicable fund. In the opinion of management, such potential disallowed claims, if any, would not have a material adverse effect on the overall financial position of the University at June 30, 2014.

11. Risk Management

The University is exposed to various risks of loss from torts; theft of, damage to, destruction of assets; business interruption; employee injuries and illnesses; natural disasters; and employee health and accident benefits. Commercial insurance coverage is purchased for claims arising from these risks. Settled claims have not exceeded this commercial coverage in any of the three preceding years. As a sovereign entity of the Commonwealth of Kentucky, the Kentucky Board of Claims handles tort claims on behalf of the University.

12. Schedule of Expenses by Program

In the Statement of Revenues, Expenses and Changes in Net Position, operating expenses are presented by functional expense purpose. Depreciation is allocated below based on functional classification as required by IPEDS for Fiscal Year 2014. Functional expense purpose is classified by natural classification:

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

12. Schedule of Expenses by Program, continued

2014

45

KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

12. Schedule of Expenses by Program, continued

2013

13. Kentucky State University Foundation, Inc.

a. Organization:

Kentucky State University Foundation, Inc. (the Foundation) is a Kentucky not-for-profit corporation formed to receive, invest and expend funds to promote and implement educational and developmental activities at Kentucky State University (the University). The Foundation is managed by a Board of Trustees independent from that of the University. The Foundation is supported primarily through contributions from alumni.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

b. Summary of Significant Accounting Policies:

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) which require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by the Foundation in the preparation of its financial statements.

Basis of Presentation

Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Foundation are classified and reported as follows:

Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations.

Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that will be met by actions of the Foundation, pursuant to those stipulations or that expire by the passage of time. Assets released from restrictions during 2014 and 2013 primarily relate to scholarships and University and student support.

Permanently restricted net assets - Net assets subject to donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or removed by actions of the Foundation pursuant to those stipulations. Permanently restricted net assets consist of assets from which the income can be used toward University scholarships and Foundation operations.

Cash and Cash Equivalents

The Foundation considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Foundation has a concentration of credit risk in that it periodically maintains bank accounts which, at times, may exceed the coverage provided by the Federal Deposit Insurance Corporation (FDIC). The Foundation has not experienced any losses on such amounts. The Foundation believes it is not exposed to any significant credit risk on cash.

Investments

Investments are stated at fair value based on closing market quotations for such securities or similar securities.

Property and Equipment

Property and equipment is recorded at cost if purchased or fair market value at date of contribution if contributed. If the donors stipulate how long the assets must be used, the contributions of property and equipment are recorded as restricted support. In the absence of such stipulations, these contributions are recorded as unrestricted support. Depreciation is computed on a straight-line basis over the estimated

47

KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

b. Summary of Significant Accounting Policies, continued:

Property and Equipment, continued

useful lives of the respective assets. Depreciation expense was $16,022 and 17,718 for the years ended June 30, 2014 and 2013, respectively.

Revenue Recognition

Contributions are generally recognized when received. However, pledges are recognized when the donor makes a promise to give to the Foundation that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets.

Income Taxes

Kentucky State University Foundation, Inc., a not-for-profit organization operating under Section 501(c)(3) of the Internal Revenue Code, is generally exempt from federal, state and local income taxes. The Foundation's management does not believe the Foundation has any unrelated business income. Accordingly, no provision for income taxes is recorded in the financial statements.

Management has evaluated the Foundation's tax positions and concluded that the Foundation had taken no material uncertain tax positions that require recognition or disclosure in the financial statements. With few exceptions, the Foundation is no longer subject to income tax examinations by the U.S. federal, state or local tax authorities for years before 2010.

Subsequent Events

The Foundation's management has evaluated subsequent events for accounting and disclosure requirements through October 2, 2014, the date the financial statements were available to be issued. There were no events occurring during the evaluation period that require recognition or disclosure in the financial statements.

Reclassification

The presentation of certain items in 2013 were reclassified to conform with the 2014 presentation, this reclassification had no impact on net assets or change in net assets.

During 2013, the Foundation determined that certain amounts were improperly classified between the net asset categories. Certain amounts have been reclassified to more accurately reflect the net asset balances of the Foundation based on donor intent. This reclassification had no effect on total change in net assets or total net assets.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

c. Investments

Investments as of June 30, 2014 and 2013 are summarized as follows:

d. Fair Value Measurements

The Foundation classifies its investments based on a hierarchy consisting of: Level 1 (valued using quoted prices from active markets for identical assets), Level 2 (not traded on an active market but for which observable market inputs are readily available), and Level 3 (valued based on significant unobservable inputs). The investment's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used as of June 30, 2014 and 2013.

Common stocks, debt securities, U.S. government securities, equity exchange traded funds, and marketable limited partnerships: Valued at the closing price reported on the active market on which the individual securities are traded. Some level 2 inputs are used for pricing of municipal and corporate bonds; therefore, they are all classified as level 2.

Mutual funds and real estate investment trust: Valued at the net asset value (NAV) of shares held by the Foundation at year end.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Foundation believes its valuation methods are appropriate and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

ued

d. Fair Value Measurements, continued

Fair value measurements as of June 30, 2014 are as follows:

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

d. Fair Value Measurements, continued

Fair value measurements as of June 30, 2013 are as follows:

e. Temporarily Restricted Net Assets

For the years ended June 30, 2014 and 2013, net assets were released from donor restrictions by incurring expenses satisfying the purpose of the restrictions specified by donors as follows:

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KENTUCKY STATE UNIVERSITY Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

f. Retirement Plan

The Foundation has a defined contribution profit sharing plan which covers all employees who meet certain requirements. Foundation contributions are discretionary. No contributions were made for the years ended June 30, 2014 and 2013.

g. Endowment Composition

On July 15, 2010, The Commonwealth of Kentucky adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA). The Foundation follows UPMIFA and its own governing documents. The Foundation has interpreted UPMIFA as requiring the preservation of the corpus of the donor-restricted endowment funds absent explicit donor stipulations to the contrary, and other amounts as deemed necessary by the board. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (1) the original value of gifts donated to the permanent endowment, (2) the original value of subsequent gifts to the permanent endowment, and (3) accumulations to permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The Foundation has determined that the balance of its endowments includes funds that require that the income and net appreciation be restricted to certain uses for the benefit of participants.

Upon review, the Foundation has determined that appropriate expenditures have been made to meet all donor restrictions regarding balances recorded in the endowment fund.

Spending Policy: The Foundation employs a conservative endowment spending policy which is evaluated annually. The amount of earnings distributed annually is based on an analysis of many factors including, the amount of earnings available to be distributed, as well as, the long and short term financial needs of the Foundation. The Foundation manages its long-term investments in accordance with the total return concept and the goal of maximizing long-term return within acceptable levels of risk. The Foundation's spending policy is designed to provide a stable level of financial support and to preserve the real value of its endowment.

From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level the donor requires the Foundation to retain as a fund of perpetual duration. There were no such deficiencies as of June 30, 2014 and 2013.

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

g. Endowment Composition, continued

Endowment net asset composition by type of fund as of June 30, 2014 is as follows:

Endowment net asset composition by type of fund as of June 30, 2013 was as follows:

Changes in endowment net assets as of June 30, 2014 are as follows:

Endowment net assets, beginning of year Contributions Interest and dividends Realized and unrealized gains Amounts appropriated for expenditure Endowment net assets, end of year -4,891,754 $3,465,357 $8,357,111

Unrestricted Temporarily Restricted Permanently Restricted Total Net Endowment Assets

• - 4,164,902 $ 3,227,786 $7,392,688
• - 237,571 237,571
• 190,208 - 190,208
• 728,543 - 728,543
• - (191,899) - - (191,899)

Endowment net assets, end of year - 4,891,754 $ 3,465,357 $ 8,357,111

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KENTUCKY STATE UNIVERSITY

Notes to the Financial Statements, continued

13. Kentucky State University Foundation, Inc. continued

g. Endowment Composition, continued

Changes in endowment net assets as of June 30, 2013 were as follows:

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KENTUCKY STATE UNIVERSITY

Schedule of Expenditures of Federal Awards

Year ended June 30, 2014

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KENTUCKY STATE UNIVERSITY

Schedule of Expenditures of Federal Awards

Year ended June 30, 2014