the tuition and fees for academic year 2017-2018 and Regent Farris seconded the motion. The motion passed.

Action Item: Approval of Fiscal Year 2018 Budget - The FY18 budget is relatively flat based on 1750 students. FY17 closed with 1793 FTE, so the prepared budget is extremely conservative. An increase on the tuition gross line will generate an increase over last year's budget. The increase will be applied to personnel raises. President Brown indicated the itemized budget will be ready in September. Regent Gilmore moved to approve the fiscal year 2018 budget. Motion passed.

Chrissy Fiscus from Dean Dorton provided an update on the A133 Audit on federal grant money citing repeat findings of internal controls of financial reporting, which is the most severe finding. The conversion to Banner, staff turnover, and the lack of succession training contributed to the repeat findings. An area of improvement is the reporting of student accounts.

Highlighted findings are:

Page 76: Section findings on A-133 audit. Financial Aid. Direct Loan and returns of Title IV funds.

Page 77: Direct Loan requires monthly reconciliation. It is recommended that policies and procedures be developed to ensure this procedure is completed monthly.

Finding 3: Reporting changes in student's status are not reported in a timely manner.

Finding 5: Eligibility to participate in the Perkins Loan requires the cohort rate to be at least 50%. Institutions with less than 50% may lose eligibility to participate in the Perkins Loan. Kentucky State University’s default is 40%.

Finding 6: In FY16, the catalog indicated Kentucky State University is an attendance taking institution. The finding indicates attendance was not reported. It is advised to not be an attendance taking institution.

Dean Dorton reported the University is required to report prior year findings. One finding was discussed with internal controls. The Board was alerted to a ledger error in 2016 and 11 journal entries. A summary of the return of Title IV funds was presented, including findings identified, resolved, and closed.

Vendor Payment Audit: The scheduled audit plan performed included a review of the vendor payment process and verification of payments made. Ingram Quick reported the following: