Greg Rush, Senior Fellow for the Council on Postsecondary Education, then joined the discussion and reported that KSU’s budget shortfall was the result of a culmination of issues, primarily carrying expenses forward that were not paid in prior years. He also stated that the University had not been reimbursing the state for capital construction projects and the asset preservation funds were not properly separated out in the budget. He reported that he is working with the current CFO and is hopeful that the shortfall will not be as much as expected.
Mr. Powell then stated that HB 250 requires CPE to approve any KSU expenditure over $5,000 and CPE has adopted a policy for this process. CPE requests that KSU provide a description of the expenditure, the budget and funding source, when the payment is due, and how it is being paid. CPE is also requiring that contracts and personnel obligations be approved by the Board to ensure that the Board is taking a look at all funding obligations.
He reported that HB 250 appropriated incentive funds which will be disbursed to KSU provided that KSU meets certain goals and benchmarks which will be part of the Management and Improvement Plan. He said that CPE wants to work with KSU in the creation of these benchmarks to ensure that KSU meets the expectations and is able to receive the funds.
Regent Fletcher requested current financial information in order for the Board to fulfill its fiduciary duty. President Stamps stated that there is current financial information available on the website and she will provide the current financial information as requested. Mr. Rush stated that he plans to work with CFO Shields to create a financial reporting format.
Regent Dukes inquired if an audit on internal controls has been performed. Mr. Powell stated that he would provide a copy of CPE's financial analysis which contains some information about KSU's internal controls. Regent Dukes also requested a copy of prior audits.
Regent Fields asked how the Board would take action on items that need approval in between meetings. President Stamps stated that the Board can hold special called meetings and Chair Patton would take that into consideration.
Lisa Lang, General Counsel, provided an overview of the documentation required for the Regents. She stated that an annual Open Records and Open Meetings training is required by statute and the Regents are required to sign that they have received this information. Additional forms are confidentiality, acceptable use, and conflict of interest.
Attorney Lang also gave a broad overview of the items in the Board Orientation binder and stated that President Stamps will provide a more comprehensive orientation at a future meeting.
Chair Patton encouraged all Regents to review the Gold Book and familiarize themselves with the Board's bylaws.