KENTUCKY STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024

NOTE 14 MANAGEMENT IMPROVEMENT PLAN

On April 8, 2022, the Governor of the Commonwealth of Kentucky signed House Bill 250, appropriating $23,000,000 of stabilization funding in the year ended June 30, 2022, to the Council and requiring the Council to implement a Management Improvement Plan (the MIP) in cooperation with the University to address financial instability at the University due to cash shortfalls and a projected financial structural imbalance in the University's budget.

Based on the legislation, the plan requires:

  1. A comprehensive cataloging and review of university policies and procedures to ensure efficiency and compliance with state and federal law;
  2. Guidelines for salary ranges and benefits for all faculty, staff, and administrators;
  3. Mandatory board member training and development, including but not limited to financial oversight and effective committee structure;
  4. Academic program offerings, course offerings and faculty productivity guidelines;
  5. Accounting and fiscal reporting systems, collections, budget, and internal controls over expenditures and financial reporting;
  6. Student success and enrollment management strategies;
  7. Student academic progress and results, and
  8. The development of an online curriculum with the intent of offering bachelor's and master's degrees online.
  9. The Council shall provide an annual report to the Interim Joint Committee on Appropriations and Revenue detailing the financial status of the Kentucky State University by November 1, 2022, and by November 1 each year thereafter for as long as the MIP is in effect. The Kentucky State University loan repayment trust fund is hereby created as a trust fund in the State Treasury to be administered by the Council for the purpose of receiving repayments of stabilization funds.
  10. Kentucky House Bill 250 described in Note 7 of this report appropriated $5.0 million and $10.0 million to the Council to provide to the University for fiscal years ending June 30, 2023 and June 30, 2024, respectively. As a condition of receiving the funds, the University entered into a management improvement plan. The final report on the University's progress under the management improvement plan was issued in November 2025 and included three recommendations as follows:
  11. Require the creation of a financial sustainability plan.
  12. Continue quarterly fiscal monitoring.
  13. Forgive the financial sustainability loan.
  14. (69)