===== PAGE 1 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS Finance and Business Committee July 27, 2012 Regent ___，Chairperson Regent Ron Banks Regent David Guarnieri Regent Chuck Whitehead ===== PAGE 2 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS July 27, 2012 FINANCE AND BUSINESS MEETING INDEX B1 Minutes of June 4, 2012 meeting B2 Executive Summary Report B3 Fiscal 2012 Budget vs Actual B4 Fiscal 2012 Financials (unaudited) B5 Human Resource Services Report ===== PAGE 3 ===== # KENTUCKY STATE UNIVERSITY Regular Meeting of the Finance and Business Committee Board of Regents 10 am, July 27, 2012 Board Room, Academic Service Building Frankfort, Kentucky Regent ___, Presiding ## AGENDA 1. Call to Order Chairperson II. Roll Call Mrs. Lillian Graham III. Opening Remarks Chairperson IV. Approval of June 4, 2012 Minutes Chairperson V. Executive Summary Report Mrs. Alice Johnson VI. Action Items - None VII. Informational Items - 2012 Budget vs Actual - 2012 Financial Statements (unaudited) - Human Resources Services Report VIII. Discussion The quick brown fox jumps over the lazy dog. XI. Adjourn Chairperson Chairperson ===== PAGE 4 =====
KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND
To: Board of Regents Finance and Business CommitteeDate: July 27, 2012
From: Alice B. Johnson Vice President for Finance and Business Affairs
Subject: Finance and Business Committee Meeting Minutes June 4, 2012
Reason for Consideration: Action ItemEnclosures: Yes
Background: The minutes of the June 4, 2012 meeting must be approved. Recommendation: Approval of the minutes of the meeting on June 4, 2012
Initiator:Alice B. Johnson Vice President for Finance and Business Affairs
Board Action Date:July 27, 2012
Effective Date:July 27, 2012
===== PAGE 5 ===== # Kentucky State University Finance and Business and Audit Committee Joint Meeting Board of Regents Finance and Business Committee – Audit Committee 11:30a.m., June 4, 2012 Frankfort, Kentucky ## MINUTES ### I. Call to Order Regent Whitehead called the meeting to order at 11:31 a.m. on June 4, 2012. ### II. Roll Call Regent Whitehead asked for the roll call, which was recorded as follows: Regent David Guarnieri, absent Regent Chuck Whitehead, present Regent Ron Banks, present Regent Mindy Barfield, absent Regent Karen Bearden, present Regent Syamala Reddy, absent Regent Phyllis Williams, absent Regent Lavaughn Henry, present Mrs. Johnson, present A quorum was declared. ### III. Approval of Minutes Action: Motion to approve the minutes from the April 27, 2012 Finance and Business Committee and Audit Committee meeting was made by Regent Whitehead. The minutes were approved as presented. Regent Whitehead recognized Mrs. Johnson to carry the discussion forward. ### IV. Vice President's Report Fiscal 2013 Financial Plan Vice President Johnson gave an overview of the FY2013 Financial Plan. She stated that due to a deficit that had to be addressed, the Financial Plan was reexamined. She also stated that a lot of scrutiny was applied to several items in the budget in order to present to the Board a balanced budget. ===== PAGE 6 ===== Action: Motion to approve the Fiscal 2013 Financial Plan as submitted was made by Regent Henry and seconded by Regent Whitehead. The motion passed. ### V. Adjournment Motion for adjournment of the Finance and Business and Audit Committee meeting was made by Regent Whitehead. The meeting adjourned at 11:45am. Submitted by: Approved by: Chair ===== PAGE 7 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND
To: Board of Regents Finance and Business CommitteeDate: July 27, 2012
From: Alice B. Johnson Vice President for Finance and Business Affairs
Subject: Executive Summary
Reason for Consideration: Informational ItemEnclosures: Yes
Background: Recommendation:
Initiator:Alice B. Johnson Vice President for Finance and Business Affairs
Board Action Date:July 27, 2012
Effective Date:July 27, 2012
===== PAGE 8 ===== KENTUCKY STATE UNIVERSITY BOARD OF REGENTS Report to the Finance and Business Committee Alice B. Johnson Vice President for Finance and Business Affairs July 27, 2012 ===== PAGE 9 ===== # Kentucky State University Finance and Business Committee Meeting July 27, 2012 ## Fiscal 2012 Audit Fiscal 2012 audit activities began in May with planning and preliminary scheduling with Dean Dorton Allen & Ford. An update will be provided at the meeting. ## Fiscal 2012 Budget vs Actual For fiscal 2012, planned budget results were achieved meeting targeted spending goals. Please refer to item B3 for a description of preliminary, unaudited results. KSU is projected to end fiscal year operations with a $2.4 spending surplus. ## Fiscal 2012 Financial Statements (unaudited) For fiscal 2012, unaudited financials are presented in item B4 indicating a reduction in net assets of $2.5 million. This reduction reflects unaudited changes in net assets after accruals have been recorded. As stated previously, this planned reduction was anticipated and budgeted results were achieved. Future revenue increases coupled with cost reductions for fiscal 2013 are planned to replace to restore budgeted spending imbalances in the current biennium. ## Staffing Changes The following professional staff changes have occurred in the Division of Finance and Business Resignation: Director of Budget Planning and Policy, Claudine Gee, April 27, 2012 Resignation: Director of Accounting, Douglas Allen, June 11, 2012 Hiring: Data Operations/Compliance Specialist, Delandual Conwell, June 1, 2012 ===== PAGE 10 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND
To: Board of Regents\nFinance and Business CommitteeDate: July 27, 2012
From: Alice B. Johnson\nVice President for Finance and Business Affairs
Subject: Budget vs. Actual June 2012
Reason for Consideration: Informational ItemEnclosures: Yes
Background: Revenues and expenses are presented for the Educational and General Fund (E&G), Auxiliary Fund, Land Grant and Action Agenda Funds. Budget vs. Actual does not include restricted grants and contracts. The summary of operations presented below is to assist in understanding the results reflected in the budget vs. actual report as of June 2012. The state appropriates funds for Land Grant as required by the U.S. Department of Agriculture. Land Grant, Action Agenda and Auxiliary Funds are not available to the University for discretionary spending. ## Revenue - State appropriations are received in installments of 30% (July), 25% (October), 25% (January) and 20% (April) of each year. At June 2012, $24.66 million of appropriations have been received. In FY11, $486,800 represents FY12 appropriations advanced in FY11 as required by the state. Institutions were required to spend FY12 tuition and fee revenue to offset the advance in FY11. - Student Tuition and Fees has been posted for Fall 2011 and Spring 2012 enrollment. Auxiliary revenues represent housing and board for resident students enrolled for Fall 2011 and Spring 2012. Student tuition and fees revenue amounts may decrease for the Spring 2012 semester due to student withdrawals after they have enrolled and year-end adjustments. Other revenue includes athletic income, indirect cost recovery, facility rentals, interest income, state funding for Regional Stewardship and a budgeted fund balance offset. As of June 2012, $431,978 has been received for Regional Stewardship. Budget variance primarily reflects the effect of the budgeted fund balance spend in FY12. ===== PAGE 11 ===== ## Expense Salaries and benefits expenses are at 93.04% of budget. This variance is considered normal. • Supplies, Travel, Communications and Services were expended at a level appropriate for the percent of fiscal year expired. These expenses are incurred more heavily during the academic year. Services include utilities and other services used for fall semester preparation. This variance is considered normal. - Interdepartmental Costs may reflect reductions in expenses which are due to timing in recording journal entries. Fixed Costs include maintenance agreements that require payment in full at the beginning of the service agreement; therefore, these expenses are not incurred evenly over the fiscal year. This variance is considered normal. - Student Aid should be recorded consistent with Tuition and Fees. Student Aid is typically recorded as students complete the registration process and aid awarded is accepted and posted to student accounts. This variance is considered normal. • Transfers include debt service obligations and internal reallocations. Transfers are typically recorded at the beginning of the fiscal year. This variance is considered normal. ## Recommendation:
Initiator:Tao-fen Bi Budget Analyst, Budget Policy & Planning
Board Action Date:July 27, 2012
Effective Date:July 27, 2012
===== PAGE 12 =====
Approved BudgetRevised BudgetYTD Actual ActivityYTD Actual % of Revised Budget% ExpiredVarianceYTD ACTUAL BY FUND GROUP
Education & GeneralAuxiliaryLand Grant & Action Agenda
Revenues
State Appropriations25,146,80025,146,80024,660,00198.06%100.00%-1.94%18,389,06906,270,932
Student Tuition & Fees22,213,28722,213,28723,585,338106.18%100.00%6.18%23,585,33800
Auxiliaries6,516,1206,516,1206,850,087105.13%100.00%5.13%06,850,0870
Other4,778,7004,778,7001,359,73928.45%100.00%-71.55%1,359,73900
Revenues Total58,654,90758,654,90756,455,16596.25%100.00%-3.75%43,334,1466,850,0876,270,932
Expenditures
Salaries/Wages/Benefits31,334,96832,752,58530,471,89793.04%100.00%-6.96%26,473,8321,183,9662,814,099
Supplies & Other3,119,0573,039,4401,759,87757.90%100.00%-42.10%1,067,420325,639366,818
Travel1,627,0691,524,7721,211,99479.49%100.00%-20.51%1,082,183654129,157
Communications603,134494,734495,174100.09%100.00%0.09%460,57718,43516,162
Services9,491,1998,696,5167,598,68387.38%100.00%-12.62%3,825,1763,490,930282,577
Interdepartmental409,914262,468(26,996)-10.29%100.00%-110.29%95,078(183,117)61,043
Fixed Costs3,428,0884,623,1813,621,45978.33%100.00%-21.67%3,223,535185,535212,389
Student Aid4,693,9944,523,8485,105,701112.86%100.00%12.86%4,785,877319,8240
Capital1,314,371147,1841,343,430912.75%100.00%812.75%341,321361,782640,327
Expenditures Total56,021,79456,064,72851,581,21892.00%100.00%-8.00%41,354,9995,703,6484,522,572
Surplus (Deficit) before Transfers2,633,1132,590,1794,873,9471,979,1471,146,4401,748,360
Mand & Nonmandatory Transfers2,633,1132,590,1792,428,40890.08%100.00%-9.92%1,549,469859,31219,627
Surplus (Deficit)002,445,538429,678287,1271,728,733
===== PAGE 13 =====
E & G Budget vs. Operating Projection Through June 30, 2012
Original BudgetRevised BudgetJune 2012 YTD Activity Projection
Revenues
State Appropriations25,146,80025,146,80024,660,001
Student Tuition & Fees22,213,28722,213,28723,585,338
Auxiliaries6,516,1206,516,1206,850,087
Other4,778,7004,778,7001,359,739
Projected Revenues Total58,654,90758,654,90756,455,165
Expenditures
Salaries/Wages & Benefits31,334,96832,752,58530,471,897
Supplies & Other3,119,0573,039,4401,759,877
Travel1,627,0691,524,7721,211,994
Communications603,134494,734495,174
Services9,491,1998,696,5167,598,683
Interdepartmental409,914262,468(26,996)
Fixed Costs3,428,0884,623,1813,621,459
Student Aid4,693,9944,523,8485,105,701
Capital1,314,371147,1841,343,430
Projected Expenditures Total56,021,79456,064,72851,581,219
Surplus (Deficit) before Transfers2,633,1132,590,1794,873,947
Mandatory transfers2,633,1132,590,1792,428,408
Projected Surplus (Deficit)002,445,538
Noncash Expenses &Accruals
Depreciation(4,393,703)
Bad Debt Expense(400,000)
Accrued Liabilities - Compensated Abs(200,000)
Accrued Liabilities - Payable to Vendors(100,000)
Projected Change in Net Assets(2,648,165)
Budgeted Fund Balance Spending FY12
FY12 Advance Appropriation in FY11486,800
FY11 E&G and Plant Fund Balance2,200,000
Total Fund Balance Spend2,686,800
Budget vs. Actual Projection38,635
===== PAGE 14 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND
To: Board of Regents\nFinance and Business CommitteeDate: July 27, 2012
From: Alice B. Johnson\nVice President for Finance and Business Affairs
Subject: Preliminary Unaudited Financial Statements-\nJune 30, 2012
Reason for Consideration: Informational ItemEnclosures: Yes
## Background: Interim Financial Statements are included as of June 30, 2012. A brief summary explanation of certain current assets and plant items follows: 1. Cash and cash equivalents total $27.6 million. This amount includes $18.3 million that is restricted for Land Grant and Action Agenda programs and $4.1 million that is restricted for plant purposes. The remainder is current operating cash that will be disbursed for current operations during the year. 2. Accounts receivable totaling $11.4 million includes the receivables from students, grants and loans. This amount includes $6 million in student accounts receivables, and $5.4 million that is grants and other accounts receivables. 3. Current liabilities of $9.2 million consist of accounts payable and accrued payroll liabilities. Accrued compensated absences total $2.1 million and Deferred Revenue totals $2.3 million. 4. As of June 2012, net assets reflect a $2.5 million decrease primarily due to federal grants and contract revenues. The Statement of Cash Flows reflects a net decrease of $2 million at June 2012. Operations consumed $33.8 million of cash through June 2012.
Initiator:Katherine Napier\nAssociate Vice President for Business Operations
Board Action Date:July 27, 2012
Effective Date:July 27, 2012
===== PAGE 15 =====
Kentucky State University Statement of Net Assets June 30, 2012 (Unaudited)
FY 2012
ASSETS
Current assets
Cash and cash equivalents27,649,764
Accounts, grants and loans receivable, net10,647,294
Investments-
Inventory and other current assets846,364
Total current assets39,143,422
Noncurrent assets
Accounts, grants and loans receivable, net773,775
Investments11,399,403
Capital assets, net80,295,452
Total noncurrent assets92,468,630
Total assets131,612,052
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities3,547,611
Accrued compensated absences2,150,976
Deferred revenue2,293,030
Deposits192,811
Other current liabilities256,226
Bonds and capital lease obligations767,784
Total current liabilities9,208,438
Noncurrent liabilities
Bonds and capital lease obligations7,904,835
Federal grants refundable991,709
Total noncurrent liabilities8,896,544
Total liabilities18,104,982
NET ASSETS
Invested in capital assets, net of related debt71,622,833
Restricted
Nonexpendable9,642,500
Expendable5,973,507
Unrestricted26,268,230
Total net assets113,507,070
===== PAGE 16 =====
Addendum to Statement of Net Assets Components of Fund Balances - Disaggregated (Unaudited)
June 30 2011Actual YTD ActivityJune 30 2012
Invested in Capital Assets, net of related debt73,936,125(2,313,292)71,622,833
Restricted - Nonexpendable:
Endowments8,594,5131,047,9879,642,500
Expendable:
Grants & Contracts(689,996)388,134(301,862)
Endowments1,541,194(551,051)990,143
Plant Renewal & Replacement3,928,818496,7514,425,569
Capital Renewal Reserves339,656520,000859,656
5,119,673853,8335,973,506
Unrestricted:
Education & General7,167,009(1,683,993)5,483,016
E&G Plant Reserve2,500,000(2,500,000)-
Auxiliary2,604,598309,7512,914,349
Land Grant Match16,057,2971,813,56917,870,866
11,640,769(2,060,673)26,268,231
Total Net Assets115,979,215(2,472,145)113,507,070
===== PAGE 17 =====
Kentucky State University Statement of Revenues, Expenses and Changes in Net Assets (By Function) Period Ending June 30, 2012 (Unaudited)
REVENUESFY 2012
Operating Revenues
Student tuition and fees (gross)23,348,005
Less: Scholarship allowances(4,588,722)
Student tuition and fees (net of scholarships)18,759,283
Federal grants and contracts6,440,774
Federal appropriations3,419,722
State and local grants and contracts1,107,907
Nongovernmental grants and contracts74,400
Auxiliary enterprises
Residence halls3,306,895
Dining3,255,868
Bookstore125,000
Other auxiliaries100,127
Other operating revenues1,409,693
Total operating revenues37,999,669
EXPENSES
Operating expenses
Educational and general
Instruction13,719,538
Research6,119,489
Public service6,765,166
Academic support4,013,732
Student services7,146,854
Institutional support11,389,312
Operation and maintenance of plant5,470,300
Student aid10,598,918
Depreciation4,088,003
Auxiliary enterprises
Residence halls2,398,972
Dining2,842,084
Bookstore-
Other auxiliaries159,246
Depreciation314,911
Total operating expenses75,026,525
Operating income (loss)(37,026,856)
===== PAGE 18 =====
Kentucky State University Statement of Revenues, Expenses and Changes in Net Assets (By Function) Period Ending June 30, 2012 (Unaudited)
NONOPERATING REVENUES (EXPENSES)
State appropriations25,555,415
Federal Grants and Contracts7,654,779
Gifts250,118
Investment income (net of investment expense)676,399
Interest on capital asset-related debt(379,855)
Other nonoperating revenues (expenses)691,303
Net nonoperating revenues34,448,159
Income (loss) before other revenues, expenses, gains or losses(2,578,697)
Endowment Gifts106,552
Capital appropriations-
Increase (decrease) in net assets(2,472,145)
Net assets, beginning of year115,979,215
Beginning balance adjustments-
Net assets, end of year113,507,070
===== PAGE 19 =====
Kentucky State University Statement of Cash Flows Period Ending June 30, 2012 (Unaudited)
FY 2012
Cash flows from operating activities
Tuition and fees16,441,532
Grants and contracts10,665,091
Payments to suppliers(32,017,323)
Payments to employees(36,340,123)
Loans issued to students(230,989)
Collection of loans issued to students199,825
Auxiliary enterprises:
Residence halls and dining6,562,763
Bookstore125,000
Other auxiliaries100,127
Other receipts1,246,520
Net cash from operating activities(33,776,965)
Cash flows from noncapital financing activities
State appropriations25,555,415
Federal Grants and Contracts7,654,779
Gifts for other than capital purposes356,670
Student organization agency receipts191,360
Student organization agency disbursements(73,544)
Other receipts (payments)691,304
Net cash from noncapital financing activities34,375,984
Cash flows from capital financing activities
Capital appropriations-
Purchases of capital assets(1,321,838)
Proceeds from capital debt-
Principal paid on capital debt(767,783)
Interest paid on capital debt(379,855)
Net cash flows from capital financing activities(2,469,476)
Cash flows from investing activities
Interest received on investments227,955
Investment expenses(69,435)
Proceeds from sale of investments(1,106,216)
Purchases of investments769,727
Net cash flows from investing activities(177,969)
Net increase (decrease) in cash and cash equivalents(3,170,226)
Cash and cash equivalents at beginning of year29,623,196
Cash and cash equivalents at end of year27,649,764
===== PAGE 20 =====
Kentucky State University Statement of Cash Flows Period Ending June 30, 2012 (Unaudited)
Reconciliation of net operating loss to net cash from operating activities
Operating loss(37,026,856)
Adjustments to reconcile operating income to net cash from operating activities:
Depreciation expense4,402,914
Loss on disposal of capital assets-
Changes in assets and liabilities:
Receivables, net(3,021,087)
Inventory and prepaid expenses269,021
Accounts payable and accrued liabilities1,791,427
Accrued compensated absences19,957
Other Liabilities(284,270)
Deferred revenue147,023
Net cash from operating activities(33,776,965)
===== PAGE 21 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND
To: Board of Regents Finance and Business CommitteeDate: July 27, 2012
From: Alice B. Johnson Vice President for Finance and Business Affairs
Subject: Human Resources Update
Reason for Consideration: Informational ItemEnclosures: No
Background: Human Resource Services has initiated and implemented several significant projects for the University as described below: 1. Benefits open enrollment for the 2012/2013 benefit plan year was completed with multiple meetings as well as recordings of meetings posted on the Human Resources web page for employees unable to attend. 2. All changes to employee elective benefits resulting from the open enrollment were entered into the Enterprise Resource Planning (ERP) system. 3. Data collection and verification for the affirmative action plan continued. 4. Worked with Institutional Research to assign all job titles to Standard Occupational Codes (SOC) for external reporting purposes. 5. A contract was signed with an outside provider to provide employee benefit administration services for all University employees as well as providing administrative support. Services include but are not limited to: Employee call center: Employee assistance with eligibility and claims questions; • New hire enrollment; Data export report for upload to ERP; and • Monthly premium and contributions reconciliations.
Initiator:Gary Meiseles Director of Human Resource Services
Board Action Date:July 27, 2012
Effective Date:July 27, 2012