Vice President for Business Affairs Gregory Rush gave the Budget Update. He reviewed the current year's budget and discussed the effect of the Governor's proposed cuts to higher education. He reported that the University had been on track to meet budget goals, in spite of lower enrollment, before Governor Bevin's proposed cuts. However, Mr. Rush stated that it would be very difficult to avoid a budget deficit without more cuts to the KSU budget if the Governor's proposed higher education budget reductions were approved by the state legislature.

A discussion ensued as to what steps were being taken to deal with potential budget cuts. Mr. Rush stated that, among other measures, President Burse has frozen all hiring and he is personally reviewing every expenditure. In response to a question regarding whether the University could draw money from its endowment to supplement the budget, Mr. Rush stated that it was unlikely such a move would be made during the remainder of the current fiscal year.

Mr. Rush stated that increased admissions could be an offset for the Governor's proposed budget cuts. A discussion was held as to how admissions could impact next year's bottom line. During the discussion, President Burse stated that his goal for Fall 2016 admissions is to bring in 600 new freshmen, not including transfer students. President Burse further stated that reaching that goal, along with goals for retention of current, non-graduating students, would significantly increase overall revenue.

President Burse also reported that Scannell & Kurtz is currently working with admissions through a program called TAG to help assist KSU in getting those 600 freshmen students. He said Scannell & Kurtz will help KSU in rebuilding its admissions infrastructure and training its employees in successful enrollment management techniques.

Regent Lysonge asked about the track record of Scannell & Kurtz. President Burse said that Scannell & Kurtz has driven enrollment increases at Western Kentucky University, Northern Kentucky University, University of Kentucky and University of Louisville and he is confident they can do the same at KSU.

Mr. Rush pointed out a correction to his Board Report. He stated that Investment Income on Statement of Revenue page is actually -$46,000 not $3,219,142. He said that this account was previously not reconciled as it should have been.

President Burse reported that the state House of Representatives may offer some relief from Governor Bevin's proposed budget cuts. He stated that he has