KENTUCKY STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 2021
NOTE 12 - RISK MANAGEMENT (CONTINUED)
During fiscal year 2021, the University started a self-insurance program for employee's health insurance. Under this plan, the University pays premiums based on estimated claims. The University pays approximately 62% of the expenses of the plan for permanent full-time employees and their families. Expenses incurred to cover claims paid by the University under the plan for year ended June 30, 2021 totaled $2,885,664. Administrative fees incurred for the year ended June 30, 2021 was $158,382. Stop loss premium paid for the year ended June 30, 2021, was $339,409.
Changes in the liability for self-insurance at June 30, 2021 are as follows:
Liability – beginning of year$ 127,213
Accruals for current year claims and changes in estimate2,885,664
Claims paid(2,796,042)
Liability – end of year$ 216,835
NOTE 13 - SCHEDULE OF EXPENSES BY PROGRAM
In the Statement of Revenues, Expenses and Changes in Net Position, operating expenses are presented by functional expense purpose. Depreciation is allocated below based on functional classification as required by Integrated Postsecondary Education Data System (IPEDS) for Fiscal Year 2021. Functional expense purpose is classified by natural classification as follows:
Compensation and BenefitsSupplies and ServicesScholarships and FellowshipsDepreciationOperations and MaintenanceTotal
Instruction$ 9,224,338$ 566,215-$ 542,178$ 678,300$ 11,011,031
Research5,366,5782,112,165-414,155518,1358,411,033
Public service5,950,9091,671,482-422,110528,0878,572,588
Academic support444,68757,691-27,82134,805565,004
Student services6,307,3651,455,866-429,909537,8458,730,985
Institutional support6,419,45615,523,719-1,215,1611,520,24724,678,583
Operation & maintenance of plant1,861,5192,797,266-257,992(4,916,777)-
Auxiliary enterprises4,946,774937,179-305,469406,3096,595,731
Student financial aid121,024379,882,365553,966693,04911,250,441
Total operating expenses$ 40,642,650$ 25,121,620$ 9,882,365$ 4,168,761$ -$ 79,815,396
NOTE 14 – CORRECTION TO BEGINNING NET POSITION
During 2021, management discovered reclassifications to beginning net position as previously reported as of June 30, 2020. Restricted nonexpendable – endowment and restricted expendable net position were previously understated. The reclassifications are summarized as follows effective July 1, 2020:
61.