B5

To: Board of Regents Finance and Business Committee Date: May 11, 2011

From: Alice B. Johnson Vice President for Finance and Business Affairs

Subject: Proposed Revised FY 2011 Financial Plan and State Appropriations

Reason for Consideration: Informational Item Enclosures: No

Background:

The Council on Postsecondary Education reduced Kentucky State University's allocation of state appropriation for FY 2011 by $1,479,400 and replaced that amount with American Recovery and Reinvestment Act (ARRA) State Fiscal Stabilization Funds (SFSF) grant funds. Therefore, the current year, FY 2011 Financial Plan, as approved by the Board of Regents is reduced to reflect this replacement of state appropriation funding. ARRA funds have been reclassified to grant funds in conformity with Federal Requirements. Educational and General expenses in the amount of $1,479,400 will be reclassified also so that these funds can be drawn down.

In March 2011, the Governor recommended that $18,943,800 in total state postsecondary institution appropriations for FY2012 be advanced to FY2011 to meet the maintenance of effort requirement for the Federal Education Jobs funding. For KSU, $486,800 of FY2012 appropriation was advanced to FY2011. Universities are required to reserve an equal amount of FY2011 tuition revenues to replace the shortage in FY2012.

In addition an additional 2.21% of FY2012 General Fund appropriation was cut in order to help balance the state budget under HB305. In FY2012, KSU's general fund appropriation is reduced by $557,300.