The University is exposed to various risks of loss from torts; theft of, damage to, destruction of assets; business interruption; employee injuries and illnesses; natural disasters; and employee health and accident benefits. Commercial insurance coverage is purchased for claims arising from these risks. Settled claims have not exceeded this commercial coverage in any of the three preceding years. As a sovereign entity of the Commonwealth of Kentucky, the Kentucky Board of Claims handles tort claims on behalf of the University.
The Commonwealth of Kentucky operates a public entity risk pool operating as a common risk management and insurance program for its members. The University pays an annual premium to the pool for its workers' compensation insurance coverage. The pool's governing agreement specifies that the pool will be self-sustaining through member premiums and will reinsure through commercial carriers for claims in excess of specified stop loss amounts.
In the Statement of Revenues, Expenses and Changes in Net Assets, operating expenses are presented by functional expense purpose. Functional expense purpose is classified below by natural classification, such as salaries, benefits, and goods and services.
Depreciation is allocated below based on functional classification as required by IPEDS for Fiscal Year 2010. The graphs and tables below summarize operating expenses by functional purpose for the years ended June 30, 2010 and 2009:
| 2010 | ||||||
| Compensation and Benefits | Supplies and Services | Scholarships and Fellowships | Depreciation | Operations and Maintenance | Total | |
|---|---|---|---|---|---|---|
| Instruction | $ 12,221,671 | $ 1,042,606 | $ 37,645 | $ 1,021,609 | $ 1,071,077 | $ 15,394,608 |
| Research | 3,201,475 | 1,621,140 | 87,356 | 531,004 | 419,012 | 5,859,987 |
| Public service | 3,048,670 | 1,390,655 | 22,480 | 173,590 | 350,887 | 4,986,282 |
| Academic support | 2,786,332 | 432,383 | - | 536,820 | 280,926 | 4,036,461 |
| Student services | 3,831,263 | 1,852,672 | 242,091 | 510,766 | 477,828 | 6,914,620 |
| Institutional support | 6,835,680 | 5,169,701 | - | 1,362,310 | 1,003,439 | 14,371,130 |
| Operation and maintenance of plant | 2,041,268 | 2,539,678 | - | 125,738 | (4,706,684) | - |
| Auxiliary enterprises | 944,572 | 4,166,877 | - | 652,595 | 431,019 | 6,195,063 |
| Student aid | 614,351 | 168,925 | 8,423,673 | - | 672,496 | 9,879,445 |
| Total operating expenses | $ 35,525,282 | $ 18,384,637 | $ 8,813,245 | $ 4,914,432 | $ - | $ 67,637,596 |
36.