Regent Bearden inquired about the state budget's impact on the requested new Betty White Health Center nursing building. President Sias stated that no state bonded capital projects were approved for universities, including Betty White Health Center. President Sias further stated that KSU would explore other alternatives for another building for the nursing program as the university cannot wait for a new building. The nursing program is growing and the university is seeking Level 5 status to enable it to offer a doctoral program in nursing practice. Without an expanded and upgraded facility, it will be unlikely that KSU could attain this Level 5 status.

President Sias announced that an accounting firm has been selected to serve as the university's internal auditor. Mr. Mark Fern, the firm's representative has been on campus this week. President Sias informed Regent Barfield that Mr. Fern will be in contact with her soon.

President Sias informed the Board that the university is considering changes to its Kentucky Teachers' Retirement System (KTRS) sick leave credit policy for retirement purposes. KSU is considering changes that would affect employees' ability to apply unlimited sick leave time towards their retirement computation. The faculty is currently capped at using 60 days of accrued sick leave towards retirement. The current cap for faculty would not change. Staff members participating in KTRS do not currently have a cap towards sick leave credit. Participants in Kentucky Employees Retirement System (KERS) have an unlimited cap for accrued sick leave that can be used towards retirement service credit. The state statute authorizing KERS does not allow agencies to place a cap on sick leave credit.

Gary Meiseles, Director of Human Resources, was requested to comment on potential changes. Mr. Meiseles stated that these recommended changes are being considered because it is very difficult to plan or budget for the payment for a retiring employee's sick leave credit to KTRS because the university cannot predict when an eligible employee would retire. President Sias stated KSU does not have funds set aside to pay for unplanned sick leave credit payments outside of the university's operating budget. Some of these payments have been as high as $37,000 per retiree.

President Sias also noted that KSU has a significant number of employees who have had a long career with KSU. Many employees have between 20 and 45 years of service with the university.

Regent Conner asked when the proposed changes might become effective. President Sias stated that a decision on a proposed policy change would occur by the July 2012 Board of Regents meeting. Regent Conner also asked whether the university had considered a “phased-in” approach. President Sias stated that the university has considering a change to the sick leave policy for over a year, particularly due to budget concerns.