===== PAGE 1 ===== ## Kentucky State University Board of Regents Meeting Finance and Business Committee April 26, 2013 Regent Lavaughn Henry, Chairperson Regent Ronald Banks Regent David Guarnieri Regent Syamala Reddy Regent Charles Whitehead Ms. Anita Lockridge, Staff ===== PAGE 2 ===== # KENTUCKY STATE UNIVERSITY Regular Meeting of the Board of Regents Finance and Business Committee April 26, 2013 10:00 a.m. ard Room – Academic Services Building Frankfort, Kentucky ## FINANCE AND BUSINESS MEETING INDEX B1 Minutes of January 25, 2013 Meeting B2 Executive Summary Information B3 Fiscal 2012 Budget versus Actual B4 Fiscal 2012 Financials (unaudited) B5 Human Resource Services Report B6 Proposed FY 2014 Financial Plan ===== PAGE 3 ===== # Finance and Business Committee April 26, 2013 10:00 a.m. Board Room – Academic Services Building Frankfort, Kentucky ## AGENDA I. Call to Order Regent Lavaughn Henry, Chairperson II. Roll Call Ms. Lillian Graham III. Opening Remarks Regent Lavaughn Henry IV. Approval of Minutes January 25, 2012 Meeting Regent Lavaughn Henry V. Executive Summary Report Ms. Anita Lockridge, Vice President Finance Administration VI. Informational Items 1. FY 2012 Budget vs. Actual 2. FY 2012 Financial Statements (unaudited) 3. Human Resource Services Report VII. Action Items: Approval of FY 2014 Financial Plan VIII. Discussion IX. Adjournment ===== PAGE 4 =====
Agenda Item Background
To:Board of Regents Finance and Business Affairs CommitteeDate: April 26, 2013
From:Ms. Anita Lockridge Vice President for Finance Administration
Subject:January 25, 2013 Committee Minutes
Reason for Consideration:ApprovalEnclosures: Yes
## Background: The minutes of the Finance and Business Affairs Committee meeting for January 25, 2013, require approval in order to become an official part of the committee records. ## Recommendation: It is recommended that the Finance Administration Affairs Committee approve the minutes of the October 26, 2012 meeting.
Approval
Initiator:Ms. Anita Lockridge Vice President for Finance Administration
Board Action Date:April 26, 2013
Effective Date:April 26, 2013
===== PAGE 5 ===== # Finance and Business Committee April 26, 2013 10:00 a.m. Board Room – Academic Services Building Frankfort, Kentucky # MINUTES ### 1. Call to Order Regent Henry called the meeting to order at 10:11 a.m. on January 25, 2013. ### II. Roll Call Regent Henry asked for the roll call, which was recorded as follows: Regent Lavaughn Henry, present Regent Ron Banks, present Regent David Guarnieri, present Regent Syamala Reddy, absent Regent Chuck Whitehead, absent Mrs. Lockridge, present A quorum was declared. ### III. Approval of Minutes Action: Motion to approve the minutes from the October 26, 2012 Finance Administration Committee meeting was made by Regent Banks and seconded by Regent Guarneri. The minutes stand approved as presented. Regent Henry recognized Mrs. Lockridge to carry the discussion forward. ### IV. Vice President's Report ## Executive Summary Vice President Lockridge gave an overview of the Executive Summary Narrative. She stated that we are monitoring the assessment of tuition and mandatory fees for Fall and Spring semester. In the Fall, tuition and fees were short about $370,000.00 from our adjusted budget. She stated that expenses for six months year to date approximated 39% of our budget. She further stated that operations will align for the reduction in revenue and that conversation has already begun ===== PAGE 6 ===== with the Cabinet. Vice President Lockridge will report back at the next Board meeting. ## Personnel Change Vice President Lockridge introduced Mr. James Persley who was recently promoted to the position of Coordinator, Collections and Cash Manager. He previously worked at Sullivan University and PNC Bank. He graduated from University of Kentucky with a BA in Business Administration in Agriculture Economics. ## NCAA Agreed-Upon Procedures Vice President Lockridge stated that Dean Dorton Allen Ford, PLLC has completed the work and has issued a draft report to management. ## Budget Vice President Lockridge stated that we are in our budget planning season. She stated that the budget will be presented at the next BOR Finance Committee meeting and also to the full Board for approval. ## Taxes and Benefits Statements Vice President Lockridge stated that employee W2's have been mailed and are also available online via employee self-service. The 1099's have been completed and also mailed and the 1098T's will be printed and mailed today. Vice President Lockridge stated that employee benefits statements will be mailed with the assistance of Neace Lukens, the University's employee benefits broker. Vice President Lockridge's PowerPoint presentation showed an example of an employee benefits statement. ## Benesolve Mr. Meiseles gave an overview of Benesolv, a subsidiary of Neace Lukens, which provides call center services that employees can contact with questions about claims, eligibility, benefit options and other service issues. BeneSolv is Kentucky State University's benefits advocate supported by a system that is accessible 24 hours a day. Copies of the Human Resource Services Newsletter were distributed to the committee members which featured an article on BeneSolv. ## Neace Lukens Vice President Lockridge stated that Neace Lukens will be on campus January 31st to give an Affordable Care Act presentation and February 14th for the Healthcare Claims Utilization Review. The President's Cabinet and EBAC committee have been invited to attend the presentations. EBAC is an acronym ===== PAGE 7 ===== for Employee Benefits Advisory Committee which is comprised of faculty and staff. KYSU.Learn.com Mrs. Logsdon gave an overview of KYSU.Learn.com which is an online professional development resource system that allows employees to take online courses to enhance their skills. ## Perkins Loan Program Vice President Lockridge gave an overview of the Perkins Loan Program at KSU after introducing Mr. Edward Samuels, Student Counselor for Perkins loans. Currently the university is not disbursing any new loans under the program. The cohort rate target is 15% by June 30 of each fiscal year. As of January 31st, the default rate was 25.9% representing twenty accounts of which all qualified for forbearance. The University will be reviewing the program to decide whether to exit the program or continue servicing the loans internally. ### V. Adjournment Motion for adjournment of the Finance and Business committee meeting was made by Regent Henry and seconded by Regent Banks. The meeting adjourned at 10:37am. Submitted by: Approved by: Anita Lockridge, Vice President for Finance and Business Affairs Lavaughn Henry, Chairperson Finance and Business Affairs Committee Approved with no corrections Approved with corrections ===== PAGE 8 ===== Finance and Business Committee April 26, 2013 10:00 a.m. Board Room – Academic Services Building Frankfort, Kentucky Agenda Item Background
To:Board of Regents Finance and BusinessDate: April 26, 2013
From:Ms. Anita Lockridge, Vice President for Finance Administration
Subject:Executive Summary
Reason for Consideration:InformationalEnclosures: Yes
Background: Recommendation:
Informational
Initiator:Ms. Anita Lockridge Vice President for Finance Administration
Board Action Date:April 26, 2013
Effective Date:April 26, 2013
===== PAGE 9 ===== KENTUCKY STATE UNIVERSITY BOARD OF REGENTS Report to the Finance and Business Committee Anita Lockridge Vice President for Finance Administration April 26, 2013 [9] ===== PAGE 10 ===== # Kentucky State University Finance and Business Committee Meeting April 26, 2013 ### Fiscal 2013 Budget vs. Actual For Fiscal 2013, planned budget results are presented in item B3 as of March 31, 2013. ## Fiscal 2013 Financial Statements (unaudited) For Fiscal 2031, unaudited comparative financials are presented in item B4 as of March 31, 2013. ## Budget Planning The Budget for FY 14 is being presented at this meeting for approval. ## Fiscal 2013 Audit Dean|Dorton|Allen|Ford began the interim audit work the week of April 15th. ## Perkins Loan Program On March 18th, the U.S. Department of Education conducted a webinar on Perkins liquidation. Based on the information that is provided to KSU, we will review our files and determine whether to remain in the program or to exit the program. As of April 11, 2013, the cohort default rate is 18.9%. ===== PAGE 11 ===== #### Finance and Business Committee April 26, 2013 10:00 a.m. Board Room – Academic Services Building Frankfort, Kentucky
Agenda Item Background
To:Board of Regents\nFinance and Business CommitteeDate:\nApril 26, 2013
From:Ms. Anita Lockridge Vice President for\nFinance Administration
Subject:Budget vs. Actual
Reason for\nConsideration:InformationalEnclosures: 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 March 2013. 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 March 2013, $18.8 million (80%) of appropriations have been received. - Student Tuition and Fees have been posted for Fall 2012 and Spring 2013 enrollment. Auxiliary revenues represent housing and board for resident students enrolled for Fall 2012 and Spring 2013. Student tuition and fees revenue amounts may decrease for the Spring 2013 semester due to student withdrawals after they have enrolled. ===== PAGE 12 ===== Other revenue includes athletic income, indirect cost recovery, facility rentals, interest income, state funding for Regional Stewardship and fund balance reserve. ## Expense • Salaries and benefits expenses are at 66.3% of the revised budget. • 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 accepts aid awards. • 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: None
Informational
Initiator:Tao- fe Bi, Budget Analyst, Budget Policy and Planning
Board Action Date:April 26, 2013
Effective Date:April 26, 2013
===== PAGE 13 ===== (This page intentionally left blank) ===== PAGE 14 =====
Approved BudgetRevised BudgetBudget after-ReductionYTD Actual ActivityYTD Actual % of Revised Budget% ExpiredVarianceYTD ACTUAL BY FUND GROUP
Education & GeneralAuxiliaryLand Grant & Action Agenda
Revenues
State Appropriations23,537,40023,537,40023,537,40018,829,92280.00%75.00%-20.00%14,842,07203,987,850
Student Tuition & Mandatory Fees25,975,15625,975,15621,108,79719,941,29794.47%75.00%-5.53%19,941,29700
Auxiliaries7,203,8607,203,8607,203,8605,870,32381.49%75.00%-18.51%05,870,3230
Other5,129,9005,129,9005,129,9001,623,82631.65%75.00%-68.35%1,623,82600
Revenues Total61,846,31661,846,31656,979,95746,265,36974.81%75.00%-25.19%36,407,1965,870,3233,987,850
Expenditures
Salaries/Wages/Benefits35,985,69336,492,43532,440,44020,818,66364.18%75.00%-35.82%17,920,242859,1232,039,297
Supplies & Other2,488,0042,580,2842,492,2241,159,71846.53%75.00%-53.47%841,87798,535219,307
Travel1,667,3431,536,8411,588,220895,92056.41%75.00%-43.59%773,089764122,067
Communications581,478820,324607,862266,24843.80%75.00%-56.20%257,8926,8711,485
Services9,367,5569,033,5428,478,3825,593,16365.97%75.00%-34.03%2,807,1802,569,029216,954
Interdepartmental383,919387,048394,4206,7281.71%75.00%-98.29%81,479(106,367)28,616
Fixed Costs2,894,9084,288,7223,133,4462,714,26986.62%75.00%-13.38%1,805,919810,99097,360
Student Aid4,890,5104,857,8774,890,3105,062,286103.52%75.00%3.52%4,844,464217,8220
Capital96,612(881,618)(904,310)584,115-64.59%75.00%-164.59%286,6190297,496
Expenditures Total58,356,02359,115,45553,120,99437,101,11062.76%75.00%-37.24%29,621,7614,456,7673,022,582
Surplus (Deficit) before Transfers3,490,2932,730,8613,858,9639,164,2586,785,4341,413,557965,268
Mandatory & Nonmandatory transfers3,490,2932,730,8643,330,8641,812,37954.41%75.00%-45.59%321,443789,031701,905
Surplus (Deficit)00528,0997,351,8806,463,991624,525263,363
===== PAGE 15 ===== # Finance and Business Committee April 26, 2013 10:00 a.m. Board Room – Academic Services Building Frankfort, Kentucky
Agenda Item Background
To:Board of Regents\nFinance and Business CommitteeDate:\nApril 26, 2013
From:Ms. Anita Lockridge, Vice President for\nFinance Administration
Subject:Preliminary Unaudited Financial\nStatements for nine months – Ending\nMarch 31, 2013
Reason for\nConsideration:InformationalEnclosures: Yes
## Background: The comparative Interim Financial Statements are included as of March 31, 2013 and March 31, 2012. A brief summary explanation of certain current assets and plant items follows: 1. Cash and cash equivalents total $26.3 million and $31.9 million for March 2013 and 2012 respectively. This amount for March 31, 2013 includes $17.8 million that is restricted for Land Grant and Action Agenda programs and $2.7 million that is restricted for plant purposes. The remainder is current operating cash that will be available for current operations during the year. 2. Accounts receivable totaling $15.1 million and $15.3 million for March 2013 and 2012, respectively, includes the receivables from students, grants and loans. As of March 31, 2013, this amount includes $8 million in student accounts receivables, and $7.1 million that is grants and other accounts receivables. There is a decrease in accounts receivable of $256,741 comparing 2013 to 2012. 3. Current liabilities for March 31, 2013 and March 31, 2012 amounts to $6.1 million and $7.4 million consisting of accounts payable and accrued payroll liabilities. Accrued compensated absences total $1.7 million and Deferred Revenue totals $1.4 million as of March 31, 2013. There is a variance of $1.3 million in current liabilities primarily due to processing of payroll related deductions. ===== PAGE 16 ===== 4. As of March 2013, net assets reflect a $944,888 increase primarily due to an increase in a gain in market value of endowment investment income, increase in net capital assets, decrease in bonds and capital lease obligations, a decrease in accounts payable and accrued liabilities. 5. Tuition and fee revenue comparison for March 2013 and 2012 represents a $2.1 million decrease. Net student tuition and fees totals $16.6 million and $18.7 million in March 2013 and 2012 respectively. 6. Auxiliary revenue comparison for March 2013 and 2012 represents a decrease of $812 thousand. 7. Operating expenses for March 2013 decreased by $4.6 million compared to operating expenses in 2012. The decrease was primarily due to one month Board approved wage increase granted in December 2011 that is not represented in March 2013 and other decreases in wages. 8. The Statement of Cash Flows reflects a net decrease of $2.4 million at March 31, 2013. Operations consumed $19.4 million and $25.8 million in March 2013 and 2012, respectively. ## Recommendation:
Informational
Initiator:Ms. Katherine Napier, Associate Vice President for Business Operations
Board Action Date:April 26, 2013
Effective Date:April 26, 2013
===== PAGE 17 =====
Kentucky State University Statement of Net Assets March 31, 2013 (Unaudited)
FY 2013FY 2012
ASSETS
Current assets
Cash and cash equivalents26,268,64631,951,176
Accounts, grants and loans receivable, net15,097,76115,354,502
Investments--
Inventory and other current assets125,97789,280
Total current assets41,492,38447,394,958
Noncurrent assets
Accounts, grants and loans receivable, net678,714794,226
Investments13,349,96011,252,023
Capital assets, net83,559,11081,161,556
Total noncurrent assets97,587,78493,207,805
Total assets139,080,168140,602,763
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities1,593,3442,535,283
Accrued compensated absences1,728,5582,081,660
Deferred revenue1,380,3321,777,290
Deposits126,640112,913
Other current liabilities203,067140,748
Bonds and capital lease obligations1,109,623764,247
Total current liabilities6,141,5647,412,141
Noncurrent liabilities
Bonds and capital lease obligations7,277,5208,474,426
Federal grants refundable991,709991,709
Total noncurrent liabilities8,269,2299,466,135
Total liabilities14,410,79316,878,276
NET ASSETS
Invested in capital assets, net of related debt75,171,96771,922,883
Restricted
Nonexpendable12,100,95711,253,589
Expendable8,278,0516,492,019
Unrestricted29,118,40034,055,996
Total net assets124,669,375123,724,487