information is collected, an outside facilitator will lead a discussion and assist with a plan of action.
Regent Patton asked which factors were utilized to determine that KSU needed the Management and Improvement Plan in areas other than finance when it appears that all of the other areas were functioning appropriately according to the SACSCOC documentation he has read. Regent Farris responded that everything is on the table when facing a $23 million problem. All areas need to be looked at from a different perspective and the Board needs to make sure that all areas are efficient and effective and that all programs are doing what they need to do and are revenue bearing. Dr. Thompson stated that an excessive amount of spending and debt occurred in the three years after SACSCOC review which necessitated the Management and Improvement Plan.
Mr. Greg Rush, KSU Finance Consultant, presented the agenda for the budget work session which includes sources of university revenue, a proposed budget structure, the five-year planning process, and budget balancing options for consideration. The sources of revenue include operations, endowments, auxiliaries, capital, and federal funding.
Mr. Rush stated that the main sources of revenue for KSU include state appropriations, indirect costs, tuition and fees, endowments, asset preservation fees, auxiliaries, and federal funding.
When developing the proposed budget structure, many of the revenue sources will be broken down into separate budgets for proper accounting and also so the Board will be able to see the separate line items when approving the budget. Mr. Rush stated that one of the challenges moving forward will be replenishing the asset preservation fund, as the asset preservation fees had been collected in the past but had not been properly accounted for.
The five-year budget planning process has multiple parts, including revenue and expenditure forecasts for each budget area, a planning calendar, integration with the ongoing risk assessment process, completion of initial forecasts, and budgetary updates each fall. Mr. Rush stated that the planning calendar will be a discussion item at the March 2022 Board of Regents meeting. When developing this planning process, there was a focus on potential growth in residential enrollment due to additional beds, the financial viability of students and collection of balances, replenishing the fund balance and reserve, and exploring additional revenue sources, developing long-term and ongoing facility renewal plan with funding needs, increasing dining rates, and restructuring the free book program.
Mr. Rush pointed out that despite these budgetary challenges, KSU has had a lot of positive things occur over the past three to four years, primarily the historically high graduation and retention rates. The challenge will be how to maintain these results while relying on the resources available to the University.
All in all, Mr. Rush asserted that the entire University budget will need to be restructured and funding must be protected and preserved wherever possible to support student success. He stated there will have to be reductions in staff as personnel is a large portion
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