Finance Committee meeting of the WKU Board of Regents to review meeting agenda; recommend acceptance of the 1992-1993 Annual Financial Report; fund balance allocations; recommend revision of 1993-94 combined budgets; review quarterly financial statement; budget priorities; funding request to Council on Higher Education; and resolution authorizing the refunding of WKU consolidated edcuational building revenue bonds, series H & J

WKU Board of Regents

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Finance Committee Meeting

Finance Committee meeting of the WKU Board of Regents to review of Fourth Quarterly Financial Statement for 1992-93; Recommend adoption of a resolution authorizing application for a Rural Electrification Administration Distance Learning grant to establish a second interactive classroom at the Glasgow campus and a second associated originating classroom on the Bowling Green campus; and recommend approval of the consolidation of travel services and to award a contract for travel services

MINUTESFINANCE COMMITTEEOF THE BOARD OF REGENTSWESTERN KENTUCKY UNIVERSITYJuly 23, 1993Required statutory notice having been given, the Finance Committee of the WesternKentucky University Board of Regents met at     a.m. in the Regents Conference Room of the WetherbyAdministration Building.  The meeting was called to order at     a.m. by Chairman Earl Fischer.  Othercommittee members present were Mr. Gray, and Mrs. Loafman.  Mr. Mudge and Mr. Preston wereabsent.8.2.1 - Review of Fourth Quarterly Financial Statementfor 1992-93The Finance Committee reviewed the Fourth Quarterly Financial Statement for 1992-93 andfound it to be in good order.  It was noted that the audit is not complete, and the quarterly financialstatement does not reflect the final figures but will be very close.  He felt it was a monumentalaccomplishment by the University that it came in at a 91% level of the budgeted expenditures.  Dr. James Ramsey, Vice President for Finance and Administration, summarized the financialstatements for committee members, noting that it was premature at the present time to make anystatements as to how the final audited numbers will come out.  Dr. Ramsey felt the final auditedfinancial statements will indicate the fund balance of the University will, in fact, increase. Mr. Fischer commented that the Finance Committee se s that the departments across campusare doing responsibility accounting with a good reaction to that with a lot of footnotes throughout thebudget.  At the same time, the Finance Committee ses the Administration doing a tremendous job ofmaking the format and summary readable so that individuals and budget units can see where they fitinto the budget picture, and so that the Finance Committee of the Board of Regents can pick up thedocument and it's not such an infertile document that t ey can track and follow it.Note: A copy of the quarterly report for the periodending June 30, 1993 is filed in the Board'sofficial records.The second item to be reviewed by the Finance Committee follows:8.2.2 - Recommendation for adoption of a resolutionauthorizing application for a Rural Electrification AdministrationDistanceLearning grant to establish a second inter-active classroom at the Glasgow campus anda second associated originating classroom on the Bowling Green campusRECOMMENDATION:President Meredith recommends the adoption of a resolutionauthorizing application for a Rural Electrification DistanceLearning Grant toestablish a second interactive classroom atthe Glasgow Campus and a secondassociated originating class-room on the Bowling Green campus.Background:The Rural Electrification Administration has initiated a Distance Learning and Medical Link grant program which will support up to 80%of the cost of establishing interactivetelevision facilities.  The next applicationdeadline is July 14th.The program assigns high priority to a number of factors including the degree of rurality, delivery of medical training (e.g. Western's Nursing programin Glasgow) and experience in distance learning.  The need for an additionaloriginating classroom on the main campus is anticipated in the near future. Furthermore, establishment of an additional classroom at Glasgow would facilitatethe expansion of course offerings there as well as the Nursing program.  Thefacilities proposed in the grant application arecongruent with existing plans fordevelopment of the communications network to the ext nded campus locations(video, data and voice).  It is estimated that the total grant budget will be$180-200,000 with up to $40,000 in matching funds. President Meredith stated that the ith the approval f the Finance Committee, Mr. Fischermoved adoption of the above resolution.  The motion was seconded by Mr. Gray and carried unanimously. 8.2.3 - Recommendation for approval of the consolidation of travelservices and to award a contract for travel servicesRecommendation:President Thomas C. Meredith recommends that the Board f Regents approve the consolidation of all university travel activities under oneorganizational unit to be located in the Department of Accounts and Fiscal Servicesand that a contract be awarded to Quality Travel for all university airline tickets,hotel reservations, and other travel related busines .Background:Travel functions and responsibilities have been segregated among three different organizational units on campus.  It has been determined thatefficiencies can be realized by consolidating these functions in Accounts and FiscalServices.  In addition, it has been determined through analysis of the travelfunctions at other universities, University of Alabama at Birmingham and SamfordUniversity, that significant travel savings can be realized and revenues generatedfrom the award of a travel contract to one vendor and that a travel coordinator canprovide valuable services to units  across campus.  In addition, agencies are willingto pay a commission to the university for these servic s.The university developed a Request for Proposal.  Bsed upon the professional evaluation of the staff, Quality Travel has been determined to havesubmitted the best bid.  Quality has agreed to a commission payment to theuniversity of 65 percent of commission they receive for all airline reservations. Quality will install a computer system in the Wetherby Administration Buildingwhich will allow the coordinator on-line access to their reservation system.  Qualitywill also provide training to the coordinator so that the travel coordinator will beable to schedule travel reservations and provide oth r travel services to departmentson campus.The Finance reviewed and approved the recommendatio related to University travel services. On a motion by Mr. Fischer, and seconded by          Mrs. Loafman the recommendation was unanimously approved.

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Finance Committee meeting to authorize additional funds to be directed into instruction, research and libraries; review of First Quarter Financial Statement; approval of the Revised Budget for the First Quarter Financial Report; recommendation to accept 1993-94 Annual Financial Report; and budget priorities

FINANCE COMMITTEE OF THE BOARD OF REGENTSOctober 28, 1994Required statutory notice having been given, a meeting of the Finance Committeeof the Board of Regents was called to order at 9 a.m., with the following members of theCommittee present: Mr. Burns E. Mercer, ChairMr. Howard GrayMrs. Peggy LoafmanMr. Cornelius E. MartinMr. Raymond B. PrestonIn addition, all other members of the Board namely, Mr. Earl Fischer, Mrs.Kristen Bale, Mr. Robert Evans, Ms. Joy Gramling, Dr. Ray Mendel, and Mr. FredMudge.Also attending were President Thomas C. Meredith, Mrs. Liz Esters, StaffAssistant to the President and Secretary to the Board of Regents; Dr. James Ramsey, VicePresident for Finance and Administration; Dr. Robert Haynes, Vice President forAcademic Affairs; Mr. Robert Rutledge, III, Vice President for InstitutionalAdvancement, and Dr. Jerry Wilder, Vice President for Student Affairs.! Recommendation for approval of a resolution authorizingadditional funds to be directed into instruction, research,and librariesChairman Mercer asked Mrs. Peggy Loafman for a report on the Special BudgetCommittee of the Board which she chaired.  Mrs. Loafman thanked the individuals whoserved on the Committee and reported that the Committee met twice, had considerablediscussion, shared a lot of information, and asked numerous questions.  The  Committeepassed the following resolution which she presented to the Finance Committee in theform of a motion for adoption by the Finance Committee.  Mrs. Loafman's motion wasseconded by Mr. Martin and passed unanimously.WHEREAS, over the past five years some increase has occurred in instructional spending; andWHEREAS, we would expect that amount to be higher inasmuch as the institution is now on a sounder fiscal footing than it was prior to 1988; andWHEREAS, the Special Budget Committee of the Board of  Regents, after reviewing information supplied by President Meredith and information supplied by Regent Mendel, b ievesthat additional funds need to be directed  into instruction, research,and libraries.  NOW THEREFORE BE IT RESOLVED, that specific and measurable goals and timetables need to be established withinPCS categories  in order that we can measure the benefits ofspending dollars in those categories, all in keeping with WesternXXI and "Moving to a New Level While Keeping Old Traditions,"as finally adopted; and BE IT FURTHER RESOLVED, that President Meredith develop an Operational Plan which coordinates Western'  movetoward quality, Western XXI, and "Moving to a New Level WhileKeeping Old Traditions" and that while priorities established bythe Board will guide the budget development process for 1995-96,the Operational Plan will be incorporated into the budgetdevelopment process for 1996-97 and beyond.Chairman Mercer thanked the Committee for a job well done.! Review of First Quarter Financial Statement for 1994-95Dr. Cecile Garmon, Assistant Vice President for Finance andAdministration discussed the financial statement for he first quarter 1994-95 andindicated that the format for presenting this information to the Board was alteredfrom previous reports to:  ! add a final column which lists the percent realized for the sameperiod of time in 1993-94 as appears in the preceding column for1994-95.  This information was requested in order to makecomparisons from year to year.! add in the Revised Budget column a line "Prior Year C ryForward Grants and Contracts" which explains the increase inthe Revised Budget for that area.  This information waspreviously merged into the total for Grants and Contracts with-out specific identification.The above item was information and required no action by the Committee.   Secretary's Note: A copy of the report is filed in the Board's official files.! Recommendation for approval of the Revised Budget for theFirst Quarter Financial Report for 1994-95Motion for approval of the revised budget as presented was made by Mr. Preston, seconded by Mrs. Loafman and carried.! Recommendation for acceptance of the 1993-94 AnnualFinancial Report Board members were each provided a copy of the 1993-94 AnnualFinancial Report and the audit reports from Baird, Kurtz and Dobson.   A copy isfiled in the Board's official files.Dr. James Ramsey, Vice President for Finance and Administration,presented the 1993-94 Annual Financial Report  f  consideration andrecommended the acceptance of the report.  He indicated that the financialstatements for the year ended June 30, 1994, are strong; revenues exceededexpenditures; an increase in the fund balance was experi nced, and a clean audit itbrought forward to the Board.State law, federal requirements and prudence requir an independentreview of the financial statements,  Ms. Sherrie Stokes, of Baird, Kurtz andDobson summarized the information required and included in the annual financialreport.   Ms. Stokes noted that the independent report is requir d for two mainreasons:  (1) if the institution receives more than $100,000 in federal financialawards per year, a report on the financial statement as well as addition proceduresis required; also (2) the Commonwealth of Kentucky requires the report on thefinancial statement for the HB 622 which outlines the procurement procedures atthe institutional level.A clean opinion was issued that the financial statements fairly present theUniversity's financial position for the fiscal year ended June 30, 1994.  Responses to the Management Letter Recommendations have beenaddressed by the University staff, and a copy of the response from Vice PresidentRamsey to President Meredith regarding each issue follows:WESTERN KENTUCKY UNIVERSITYOffice of the Vice Presidentfor Finance and Administration July 16, 2009MEMORANDUMTO: Dr. Thomas C. Meredith, PresidentFROM: James R. RamseyVice President for Finance and AdministrationWe are extremely pleased with the results of the audit of the financial statementsof Western Kentucky University for the year ended June 30, 1994, as prepared by theindependent certified public accounting firm of Baird, Kurtz & Dobson (BKD).  Webelieve that the financial statement of WKU continues to reflect an improved financialpicture for WKU as evidenced by:1) revenues that exceeded expectations; 2) expenditures that were within budget expectations; a d3) an increase in the unrestricted fund balance. As part of the audit of the financial statements, BKD has included  fourrecommendations in the Management Letter to you and the Board of Regents.  Also, asrequired by the Single Audit Act and OMB Circular A-133, BKD has prepared variousletters that address the federal audit requirements for federally funded programs.  TheIndependent Accountant's Report on Compliance with Specific Requirements Applicableto Major Federal Award Programs, provides several findings for your attention.  Itshould be noted that BKD indicated that based upon their audit procedures, thesefindings represent immaterial instances of noncompliance with the requirement of OMBCircular A-133.In an effort to respond to the recommendations and findings of BKD, we haveprepared the attached analysis that addresses each of the management recom-mendationsmade to you and the Board.  We have also responded to ach of their findings pertainingto federal programs.  We believe that we have addressed each recommendation andfindings.  If you or any member of the Board has any questions, feel free to contact us.JRR:ttcAttachmentAnnual Financial ReportMANAGEMENT LETTER RECOMMENDATIONS:1. Refund checks from Vendors:  BKD noted several insta ces in which refundchecks were not remitted to the Commonwealth for up to two or three monthsafter the date of receipt.  It was recommended that these items should follow theproper channels in a timely manner so that the payment voucher can be promptlyprepared to remit the funds back to the Commonwealth.Response:For those checks held in the Department of Purchasing, no delays were reportedafter October 1993.  This recommendation was made in the 1992-93 AnnualReport that was communicated to the Board of Regents and to departmentsOctober 1993.  Purchasing put in place procedures to correct delays.  Noviolations by this department occurred after they wre made aware of thisproblem in the prior year audit.Two other departments on campus were cited for delays. These two departmentshave indicated that they will promptly submit to Frankfort refund checks--onepaying voucher in accordance with state regulations.  2. HB 622 reporting:  BKD noted that the University is required to file a report ofsingle source and emergency purchases made during the fiscal year--90 daysfollowing the fiscal  year.  This was not done for the fiscal year 1992-93.Response:We employed a new Director of Purchasing during this period, and thisindividual was unaware that this report was required to be filed in Frankfort. The Director of Purchasing has indicated that given this knowledge, the reportwill be filed in a timely fashion in the future.3. Investments:  BKD noted that the rate of return on investments held by theTrustee appeared to be less than expected.  BKD recommended the Universitymanagement investigate the reasons for this variance, and BKD recommends thatspecific investment guidelines be prepared and discussed with the trustee.Response:University management has had detailed discussions with the trust manager atthe bank.  University management has also had detailed discussions with thePresident of the bank concerning the rate of return on the portfolio for the mostrecent year.  The University Internal Auditor is currently evaluating theperformance of the bank.Money managers are normally evaluated over a period of time, such as 5 to 10years. According to information provided by the bank, the bank's performance onthe accounts held in trust under the bond indenture averaged 9.8% for the last 10years, 7.3% for the last 5 years, and 3.3% for the current year.  University management has drafted a detailed set of investment guidelines to bediscussed with the bank.  These guidelines have been reviewed by professionalportfolio managers with the Commonwealth of Kentucky.  They have providedinformation and suggested changes. The Bank is currently assigning a new portfolio manager to the University'saccounts and at the appropriate time these guidelines will be discussed with thisindividual.4. Accrued Sick Pay and Salary Benefits:  BKD had noted that GASB Statement#16 suggests that the liability for sick pay benefits and other salary relatedbenefits applicable to either sick pay or vacation days be recorded.  Given theJune 30, 1994, effective date of this new GABS requir ment, the current liabilityfor Western Kentucky University is considered immaterial.  The Universityintends to designate a portion of its four million dollar reserve to cover thisliability.   SCHEDULE OF FINDINGS AND QUESTIONED COSTSFINDING NO. 1: ADMINISTRATIONPROGRAM:Perkins LoanRESPONSE: The two students in question were done in the early 80'sprior to formalized procedures being adopted.  Efforts arebeing made to comply with counseling requirements ofPerkins  Regulations.FINDING NO. 2: ADMINISTRATIONPROGRAM:Federal Work StudyRESPONSE: The Athletic Trainer has been advised of not acceptingvolunteer services from any paid employee.  This practicehas ceased in that area.FINDING NO. 3: ALLOWABLE EXPENDITURESPROGRAM:Student Financial AidRESPONSE: The Department of Student Financial Assistance mailsaward notifications to the student.  It is the responsibility ofthe Department of Student Financial Assistance to properlynotify students of all federal awards.  Award notificationsare generated by the automated system and mailed to thestudent within a week of the award.  The system indicatedthat an award notice was generated, however, there was nota copy in the student's file.  The Department will make everyeffort to ensure proper notification to all students in thefuture.FINDING NO. 4: ALLOWABLE EXPENDITURESPROGRAM:Pell 93-94RESPONSE: The Department makes effort to file all reports, requ sts andcorrections in a timely manner.  The correction form hadbeen completed and ready to mail.  The delay was the resultof an ice storm that closed the University for four days.FINDING NO. 5: REPORTINGPROGRAM:Research and Development Coal Bulk AnalysisGrant No. FG2293PC9321RESPONSE: This is a first year grant and through oversight the reportwas submitted in March.  Efforts will be made to file on amore timely basis.FINDING NO. 6: REPORTINGPROGRAM:Upward BoundGrant No. PO47A20461RESPONSE: There were some difficulties in acquiring some of theinformation needed to complete the report causing a del y. The Department of Education was notified and theUniversity was granted an extension by phone.FINDING NO. 7: ELIGIBILITYPROGRAM:Student Financial AidRESPONSE: The Department computed the cost of attendance based on aprojected tuition increase.  When the actual tuition increasewas calculated, the Department failed to adjust the cost forgraduate students.  The Department will take everyprecaution to ensure that allcost calculations are correct.Ms. Stokes noted that the Corrective Action Plan will be filed with the U.S. Department of Education and with the State.  All points noted in the financialpackage have been addressed and follow-up will be don in future audits todetermine the status of the corrections.Following a period of discussion, a motion for acceptance of the 1993-94Financial Report was made by Mrs. Loafman, seconded by Mr. Gray and carried.! President Thomas C. Meredith recommends the following fundbalance allocations:AcademicInstructional equipment $  300,000Ivan Wilson Auditoria seats 40,000President's Special Grant Fund 75,000Journalism remodeling 75,000Consumer and Family Sciences (disposals) 4,275Teacher Education (testing materials) 2,600Psychology (laser jet color printer) 5,320Education Technology (projection panels) 15,200Graduate Studies (Faculty Research Fund) 40,000Academic Advising (Advisers' Handbook) 4,200Debt service on faculty computers 94,000Upgrade faculty computers 40,000Interactive Television (matching funds) 100,000Student AffairsAdmissions (printer) 800Financial Assistance (computer) 5,300Institutional AdvancementMajor Gift Campaign and Marketing Plan 350,000InstitutionalPotter landscaping 25,000Vans (3) (faculty, staff, and student travel) 60,000Tennis courts (renovation and redirection) 40,000Restroom and concession facility (ADA) 50,000WAB (relocation to WAB) 100,000Former President's Home (prepare for new tenants) 40,000Facilities Management (equipment)     150,000Total * $1,616,695*Note:The total of  $1,616,695 does not represent the total fund balance available.  There is approximately one million dollars still available.  Arecommendation will be presented to you on that amount at the Januarymeeting.  More information is needed on a few additional items beforea recommendation can be made.  More definitive information has beenrequested regarding the need to replace fume hoods in Ogden and torecon-struct the replacement air system.  This situation will be veryexpensive to correct, and the balance of the fund balance should bereserved until these unknown costs are received.  In addition to all of the above, a four million dollar institutional reservewill be maintained. *Dr. James Ramsey, Vice President for Finance and  Administration, andPresident Thomas C. Meredith led a lengthy discussion on the fund balance andthe recommended allocations.  * Chairman Mercer noted the recommendation does not reflect an increasein the reserve for next year and expessed an interest in seeing the Universitycontinue to increase the reserve by the same percent as the percent ofrevenue increase for next year and keep the same percent that is currentlyshown in order to not deplete the reserve on a percentage basis.   Dr. CecileGarmon indicated that it would take approximately $200,000 to stay at the samepercentage as 1992-93.  The Committee felt that this possibility of increasing the reserve should befurther explored at the January meeting.Motion for approval of the fund balance allocations was made byMrs. Loafman, seconded by Mr. Preston, and carried.! President Thomas C. Meredith recommends the followingitems as budget priorities for 1995-96:1. Resolution from the Special Budget Committee calls foran increase in funds directed into instruction, research,andlibraries;2. Enhance faculty and staff salaries;3. Enhance student retention;4. Enhance minority student recruitment;5. Fund "Moving to a New Level..."The last item on the agenda for the Finance Committee was arecommended budget priorities for 1995-96.  Following a lengthy discussionregarding the recommended priorities, no action was taken by the FinanceCommittee on this item; rather it was referred to the Board as a whole.With no further business to come before the Committee, motion foradjournment was made by Mr. Gray and seconded by Mrs. Loafman.  The meetingadjourned at approximately 10:20 a.m.

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Finance Committee Meeting

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