Proceeding to Operating Expenses, Chair Hatchett requested the definition of “institutional support.” Dr. Burnette, Interim Chief of Staff, provided the definitions of “institutional support” and “operations and management.”

Regent Dukes inquired why the “academic support” expense has almost doubled from 2020 to 2021. Dr. Burnette explained that COVID had a tremendous impact on the delivery of instruction and much of the expense could be related to the online hybrid delivery of instruction. Dr. Burnette suggested that this area be examined more thoroughly to see why that cost doubled. Regent Dukes asked for a follow-up on this issue.

Regent Moyer queried why institutional support increased by approximately 45%. Chair Hatchett asked Dr. Shields to define the “Auxiliary Enterprises” sub-category titled “Other.” Dr. Burnette inquired if athletic programs were included in the “Other” sub-category of Auxiliary Enterprises.

Regent Dukes requested clarification that the net loss number in the “Non-Operating Expenses” category was not actually a loss but was, in fact, a gain. Interim President Johnson clarified that it was a gain.

Regent Dukes noted a significant increase in investment income year over year and asked what precipitated the change. Dr. Burnette asked if the investment income was coming from the Foundation or the State. Dr. Shields replied that it came from both. Chair Hatchett asked where the Foundation shows up in the financial statements and whether the Foundation’s information is recorded separately since it is a separate entity. Dr. Shields replied that the Foundation was not separated out in the financial statements. Chair Hatchett asked for clarification that the Foundation was not separated out “at all.” Dr. Shields responded that Chair Hatchett was correct. Chair Hatchett asked if investment income meant operating investments and if it had nothing to do with the Foundation’s money.

Dr. Tidwell reflected that it would be a reasonable request to ask for a more detailed breakdown of what is captured in the overall group of “investment income,” as it appears that a number of things feed into this category. President Johnson agreed that this investment income category needed to be sorted out.

Chair Hatchett called for any other questions regarding the unaudited statements of revenues, expenses, and changes in net position.

Hearing no further questions, Dr. Shields proceeded to the Statement of Cash Flows, noting an increase of nearly $10 million of net cash used in operating activities. Chair Hatchett asked about the big change in the bookstore’s numbers and also asked what was represented by the category “Loans to Employees.” Dr. Shields asked Ms. Raglin if she knew of any type of loans available to employees and she advised that she was not aware of any. Chair Hatchett again requested clarification regarding the bookstore’s numbers. Dr. Shields replied that he would further look into those numbers. Chair Hatchett asked if anyone present had a perspective on bonded indebtedness.

Chair Hatchett also asked about the category “Proceeds From Sales and Maturities of Investments” and inquired if that included mostly maturities and not sales.

Regent Moyer asked how KSU went from this statement of cash flow to needing $23 million in one year. Dr. Shields replied that the $23 million calculation came from CPE and Mr. Greg Rush, so he wasn’t sure how that came about; however, he noted that a number of things were taken into consideration. Regent Moyer asked if the liabilities from an accumulation of years should have shown up on the audited balance sheet and further commented that there would be a continuing question of how KSU arrived at its current situation.