...[T]he annual budget, actual expenditures for Facilities and Infrastructure totaled $5,237,225.00 as of April 30, 2022. The $3.3 million for Sodexo is by and large for new services, and it is unclear where the savings have been gained from last fiscal year. We are not aware of any significant changes in expenses for Facilities and Infrastructure. There will be some savings from contracts canceled for services currently provided in these areas, but certainly not to this magnitude.

Leaving this issue aside, there is a fair amount of budget uncertainty in general to give pause on such a large expenditure. On June 3, 2022, the Board approved a $36,821,600 annual budget for FY 22/23, including $5,500,000 projected Facilities and Infrastructure expenditures, as noted above. The agenda items stated that the unit alignment is only a recommendation based on current year operations. The budget includes a $7 million reduction. Final alignment will be based off the President's final review and decision for each department. To date, we have not seen this reconciliation, nor have we seen a revised budget based on actual student and mandatory fee collections, which make up 40.74% of the approved budget.

We are extremely pleased that the Board approved the contract for outside accounting assistance. As you know, CPE is providing incentive funding in the amount of $500,000 for this purpose. As part of the justification for the services, KSU staff states that the University “lacks the competencies to prepare monthly bank reconciliations and forecasts on cash flows, budget executions, and key performance indices.” While we fully expect the contractor to quickly provide Dr. Burnette with the assistance he so desperately needs, with the current deficit in capacity, ANY new significant expenditure is questionable.

As for the negotiated agreement, Sodexo is proposing to bring in a significant number of staff, with 11 leadership positions that include a full-time HR manager for their 42 employees and a “Unit Controller,” who will ensure compliance with financial policies and procedures. More justification should be provided for this need. In addition, the presentation materials and agenda items state that the costs will be based on actual services provided that are preapproved by KSU and that the exact first-year cost will depend on the services actually rendered by Sodexo. However,

The Sodexo contract is necessary to address the Declaration of Emergency recognized by the KSU Board of Regents and the deplorable conditions that our students and staff continue to work and study through. This contract allows us to gain the institutional controls necessary to manage costs and leverage resources caused by a deferred maintenance plan.

To our knowledge, the 2023 budget is $41 million. This is what Dr. Shields shared with the Board and legislative committees on numerous occasions.

The poor conditions of KSU's custodial, grounds, and maintenance operations reflect the need for an overhaul of the management processes, procedures, and practices so that they can align with the purposes and objectives of the management improvement plan. Moreover, they reflect the need for financing support to normalize expenses to the budget over the current and following fiscal years.

This issue has been addressed in the Sodexo PSC and Management Agreement.