Approval Minutes Approval of June 11, 2015, Meeting Minutes

Transcription

1 J. Finance, Technology, and Human Resources Committee *1:00 p.m. (CT), September 18, 2015 Room 133 Building H Southcentral Kentucky Community and Technical College Bowling Green, Kentucky Call to Order Page Roll Call Approval Minutes Approval of June 11, 2015, Meeting Minutes **Action: Ratification of Personnel Actions Action: KCTCS Biennial Budget Request Action: KCTCS Interim Project Approval Request: Pikeville Technology Center Information: GASB 68 Implications Update: KCTCS Quarterly Financial Report Update: Supplier Diversity Report Update: Office of Audit Services Report Update: Technology Solutions Report Update: BuildSmart Status Report Next Meeting December 3, 2015 Adjournment *Start time will be upon conclusion of the preceding event. ** All items listed with two asterisks (**) are considered to be routine by the Board and will be approved by one motion. An item may be removed from the consent agenda at the request of a regent. Agenda items removed from the consent agenda will be discussed in their normal sequence at the full Board of Regents meeting. Consent agenda items will be discussed separately during committee meetings of the Board of Regents. 121

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3 MINUTES KCTCS Board of Regents Finance, Technology, and Human Resources Committee June 11, 2015 Committee Members Present: Ms. Doris C. Thomas, Committee Chair Mr. Robert G. Cooper, Committee Vice-Chair Ms. Betsy E. Flynn Mr. Shawn S. Payne Board Members Absent: Mr. Ebenezer Yankey Mr. Porter G. Peeples, Sr. Ms. Marcia L. Roth DRAFT CALL TO ORDER APPROVAL OF MINUTES Committee Chair Thomas called to order the meeting of the Kentucky Community and Technical College System Board of Regents Finance, Technology, and Human Resources Committee at 12:21 p.m. (CT) on June 11, The meeting was held in Room 210 of the Technology Center at Hopkinsville Community College. The press was notified of the meeting on June 3, Hon. J. Campbell Cantrill, KCTCS General Counsel, served as parliamentarian. There being a quorum present, the meeting began with the approval of minutes. Chair Thomas called for a motion to approve the minutes of the March 12, 2015, meeting of the Finance, Technology, and Human Resources Committee. MOTION: Ms. Roth moved and Mr. Payne seconded that the minutes of the March 12, 2015, KCTCS Board of Regents Finance, Technology, and Human Resources Committee be approved. VOTE: The motion was approved unanimously. ADDITIONS OR CHANGES TO THE AGENDA ACTION: RATIFICATION OF PERSONNEL ACTIONS There were no additions or changes to the agenda. RECOMMENDATION: That the KCTCS Board of Regents ratify the personnel actions listed in the agenda materials. Chair Thomas called on KCTCS President Jay K. Box to present the item. KCTCS Vice President Wendell Followell assisted with the presentation. It was noted that the personnel actions presented were in accordance with reporting guidelines and policies adopted by the KCTCS Board of Regents. President Box asked the committee to review the revised agenda item distributed at the meeting (Attachment A). The Personnel Actions list was revised to include the appointment of two new college presidents: Dr. Devin Stephenson appointed as the President and Chief Executive Officer of Big Sandy Community and Technical College, effective June 1, 2015, and Dr. Scott Williams appointed as the President and Chief Executive Officer of Owensboro Community and Technical College, effective June 1, The 123

4 DRAFT Administrative Appointments and Promotions with Tenure names were revised to include Maysville Community and Technical College and Somerset Community College. Chair Thomas called for a motion. MOTION: Ms. Flynn moved and Mr. Cooper seconded that the Finance, Technology, and Human Resources Committee recommend that the KCTCS Board of Regents ratify the revised personnel actions as presented at the meeting. VOTE: The motion was approved unanimously. ACTION: KCTCS SALARY SCHEDULE RECOMMENDATION: That the KCTCS Board of Regents approve the KCTCS Salary Schedule (Attachment B), which includes salary ranges for regular full-time faculty and staff. Funding for the salary schedule must be approved by the KCTCS Board of Regents within the KCTCS annual budget. Chair Thomas called on President Box to present the item. Vice President Followell assisted with the presentation. The proposed KCTCS Salary Schedule has been designed in consideration of benchmark pricing, internal equity, and academic rank. The KCTCS Board of Regents last revised the KCTCS Salary Schedule in June The salary schedule reflects monthly salaries to accommodate the period of assignment in months for regular full-time faculty and staff. Faculty assignments range from 10 to 12 months. Staff assignments range from 9 to 12 months. It was noted that KCTCS is in the process of conducting a systemwide compensation and classification study. The results and recommendations will be shared with the Board when the study is completed in fiscal year Chair Thomas called for a motion. MOTION: Mr. Cooper moved and Mr. Peeples seconded that the Finance, Technology, and Human Resources Committee recommend that the KCTCS Board of Regents approve the KCTCS Salary Schedule (Attachment B), which includes salary ranges for regular full-time faculty and staff. Funding for the salary schedule must be approved by the KCTCS Board of Regents within the KCTCS annual budget. VOTE: The motion was approved unanimously. ACTION: KCTCS SALARY INCREASE RECOMMENDATION: That the KCTCS Board of Regents approve a 1.0 percent or $1,000 (whichever is greater) recurring salary increase in for each regular full-time KCTCS faculty and staff employed 124

5 before April 1, 2015, and who earns at least the Fully Met Job Requirements (M) rating in the KCTCS performance evaluation system. DRAFT Chair Thomas called on President Box to present the item. Vice President Followell assisted with the presentation. The recurring salary increase will be funded using recurring funding available to KCTCS in The KCTCS President s Leadership Team supports the increase. The salary increase will be provided to only those employees who earn at least the Fully Met Job Requirements (M) rating in the KCTCS performance evaluation system. The proposed balanced budget for each KCTCS college, the systemwide operations and support programs, the Fire Commission, and the Kentucky Board of Emergency Medical Services (KBEMS) have been developed anticipating funding this increase. KCTCS faculty and staff need to be fully committed to the future of KCTCS. This recurring salary increase is an indication of the KCTCS commitment to its faculty and staff and recognition of their commitment. For KCTCS employees at or below $100,000, the $1,000 recurring increase will have a greater economic impact, and it will help move them closer to the market level within their salary band. Chair Thomas called for questions and discussion. During the discussion, it was noted that the committee would like to provide a greater salary increase, but given the current constraints, a 1.0 percent or $1,000 recurring increase is all that can be accommodated in the budget proposal. The committee expressed its appreciation for the hard work from the KCTCS faculty and staff. Chair Thomas called for a motion. MOTION: Ms. Flynn moved and Mr. Peeples seconded that the Finance, Technology, and Human Resources Committee recommend that the KCTCS Board of Regents approve a 1.0 percent or $1,000 (whichever is greater) recurring salary increase in for each regular full-time KCTCS faculty and staff employed before April 1, 2015, and who earns at least the Fully Met Job Requirements (M) rating in the KCTCS performance evaluation system. VOTE: The motion was approved unanimously. 125

6 DRAFT ACTION: KCTCS ANNUAL BUDGET RECOMMENDATION: That the KCTCS Board of Regents adopt the budget resolution (Attachment C) regarding the Annual Budget for the Kentucky Community and Technical College System. This budget and its provisions will be effective July 1, 2015, through June 30, Chair Thomas called on President Box to present the item. Vice President Followell assisted with the presentation. The annual budget directs the use of financial resources available to KCTCS to help achieve the mission and vision of KCTCS. This budget places emphasis and the highest priority on students and the effective and efficient use of available resources. The KCTCS budget will fund a salary increase in for faculty and staff. It will fund fixed cost increases in current employee benefits programs and fund the cost of faculty promotions. It will fund fixed cost increases in utilities and facility insurance and will maintain a nonrecurring budget reserve for each college, the systemwide operations and support programs, the Fire Commission, and the Kentucky Board of Emergency Medical Services (KBEMS). The KCTCS President s Leadership Team supports this recommended budget. The proposed resolution (Attachment C) provides for adequate fiscal control and oversight by the KCTCS Board of Regents consistent with common practice within postsecondary education institutions. At the same time, the resolution provides a reasonable amount of discretion to the KCTCS President and establishes limits and thresholds that the President cannot exceed without the expressed consent of the Board. The proposed budget and its provisions will be effective for the fiscal year beginning July 1, 2015, and ending June 30, The operating budget authorizations approved by the Board total $888,114,300 for the fiscal year beginning July 1, 2015 and ending June 30, Of this amount, $554,528,700 are unrestricted current funds; and $333,585,600 are restricted funds from sources such as federal, state, private gifts, grants, contracts, or appropriations. In addition, the Board approved capital budget authorizations totaling $310,524,000 from agency funds and state funds, contingent upon receipt and availability of those funds for KCTCS for the fiscal year. Chair Thomas called for a motion. MOTION: Ms. Roth moved and Mr. Peeples seconded that the Finance, Technology, and Human Resources Committee recommend that the KCTCS Board of Regents adopt the budget resolution (Attachment C) regarding the Annual Budget for the Kentucky 126

7 Community and Technical College System. This budget and its provisions will be effective July 1, 2015, through June 30, VOTE: The motion was approved unanimously. DRAFT UPDATE: KCTCS QUARTERLY FINANCIAL REPORT Chair Thomas called on President Box to present the item. Vice President Followell assisted with the presentation. It was reported that information for the third quarter of fiscal year , which ended March 31, 2015, was derived from the KCTCS Administrative Financial System. The Statement of Revenues and Expenditures reflects the actual program and operational expenditures compared to the fiscal year budget approved by the KCTCS Board of Regents on June 13, The Annual Budget Adoption Resolution (adopted by the Board of Regents at its June meeting annually) states, The KCTCS Quarterly Financial Report shall contain sections that reflect the KCTCS July 1 opening budget, amendments to the opening budget, and expenditures to date. (Attachment D), the Statement of Revenues and Expenditures, is designed to fulfill this requirement. Total revenues of $709 million reflect 77 percent of the budgeted revenue and appropriated funds. Current fund expenditures and budget reserve through the fiscal year total $650 million, 70 percent of the expenditures budgeted for the year. As of the end of the third quarter, KCTCS has received 92 percent of budgeted tuition revenue; and 84 percent of the total budgeted financial aid has been received and expended. A total of 100 percent of the nonrecurring budget reserve from prior year funds is in place. The Statement of Net Assets presented reflects the overall financial position of the System and includes assets, liabilities, and net assets as of March 31, The Statement of Net Position (Attachment E), although not specifically required in the Board s Annual Budget Adoption Resolution, has also been included in the Quarterly Financial Report to give the Board a periodic snapshot of the KCTCS financial position using the most common accounting-based schedule. UPDATE: FACILITIES MANAGEMENT AND SUSTAINABILITY STATUS REPORT Chair Thomas called on President Box to present the item. Vice President Followell assisted with the presentation. The current report includes updates on KCTCS capital construction projects including the BuildSmart projects, property management, sustainability initiatives, energy management, and facilities utilization. The information on property management activities includes property acquisitions and leases, insurance settlements, asset audits, and surplus property disposition. 127

8 DRAFT UPDATE: RESOURCE DEVELOPMENT REPORT A summary of the Environmental Health and Safety Site Assessment was also included as part of this report. Each college was assessed and the report outlined the process and corrective actions to date. Chair Thomas called on President Box to present the item. Vice President Timothy Burcham assisted with the presentation. The report provides an update on the private giving and sponsored projects, grants, and contracts. Private gift income by donor purpose and source for the System and the donor source by college for each KCTCS college are presented in this report. The largest private gifts received during the reporting period are also featured in the report. Sponsored Projects, Grants, and Contract funds are stated by source and purpose for the System Office in total; and total awards to each KCTCS college are included in the report. The top five grants and contracts received during the reporting period are highlighted. The period for the report is July 1, 2014, through April 30, NEXT MEETING ADJOURNMENT The next regularly scheduled Finance, Technology, and Human Resources Committee meeting is September 17, 2015, at Southcentral Kentucky Community and Technical College, Bowling Green, Kentucky. Ms. Roth moved and Ms. Flynn seconded that the Finance, Technology, and Human Resources Committee adjourn. VOTE: The motion was approved unanimously. The Finance, Technology, and Human Resources Committee meeting adjourned at 2:50 p.m. (CT). 09/17/15 Date Approved by the Finance, Technology, and Human Resources Committee Betsy E. Flynn Committee Chair 128

9 129 Attachment A

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13 DRAFT Attachment B PROPOSED KCTCS Salary Schedule* Funding for the salary schedule must be approved annually by the Board of Regents. Faculty (Monthly**) Rank Minimum*** Market Maximum Instructor $3,521 $4,399 $5,279 Assistant Professor $3,960 $5,015 $6,071 Associate Professor $4,572 $5,867 $7,162 Professor $5,416 $7,041 $8,665 Staff (Monthly**) Band Minimum*** Market Maximum 1 $1,389 $1,703 $2,016 2 $1,523 $1,874 $2,223 3 $1,675 $2,066 $2,459 4 $1,846 $2,286 $2,725 5 $2,042 $2,536 $3,031 6 $2,263 $2,821 $3,379 7 $2,515 $3,147 $3,780 8 $2,803 $3,522 $4,239 9 $3,135 $3,951 $4, $3,513 $4,444 $5, $3,950 $5,013 $6, $4,454 $5,671 $6, $5,035 $6,434 $7, $5,707 $7,317 $8, $6,487 $8,349 $10, $7,393 $9,547 $11, $8,452 $10,950 $13, $9,687 $12,593 $15,498 *Applies to regular, full-time positions only. **Faculty and staff annual salaries are based on the period (number of months) of assignment. Faculty assignments range from 10 to 12 months; staff assignments range from 9 to 12 months. ***For existing employees, a rating of at least the Fully Met Job Requirements (M) in the KCTCS performance evaluation system is required to receive a annual salary increase. 133

14 DRAFT Attachment C Kentucky Community and Technical College System Board of Regents Annual Budget Adoption Resolution Be it Resolved, that upon due consideration and upon recommendation of the Kentucky Community and Technical College System (KCTCS) President, the following operating budget authorizations totaling $888,114,300 are approved for KCTCS for the fiscal year beginning July 1, 2015, and ending June 30, Of this amount, $554,528,700 are unrestricted current funds; and $333,585,600 are restricted funds from sources such as federal, state, private gifts, grants, contracts, or appropriations. Be it Resolved, that upon due consideration and upon recommendation of the KCTCS President, the capital budget authorization totaling $310,524,000 from bond funds and agency funds is approved, contingent upon receipt and availability of those funds for KCTCS for fiscal year beginning July 1, 2015, and ending June 30, In the event current fund revenues now estimated should not be realized, the KCTCS President shall take appropriate action to reduce budget authorizations to amounts sufficient to ensure that expenditures do not exceed available revenues. The KCTCS President shall report to the Board in advance any major deviations from the approved operating budget. In the event actual annual revenues exceed estimated revenues, the KCTCS President may authorize an increase in the unrestricted current funds expenditure budget up to 2.0 percent of the Board s authorized expenditure level. Increases greater than 2.0 percent of the authorized expenditure budget must have prior approval of the Board. The KCTCS Quarterly Financial Report shall contain sections that reflect the KCTCS July 1 opening budget, amendments to the opening budget, and expenditures to date. This report shall provide the necessary detail for amending the budget as permitted by this resolution. The purchase of any item of equipment greater than $200,000 must have prior approval of the Board of Regents and must be contained in the Biennial Legislative Appropriations Act in accordance with KRS Chapter 45. A capital construction project with a scope greater than $600,000 must have the prior approval of both the KCTCS Board of Regents and the Commonwealth Capital Projects and Bond Oversight Committee, pursuant to KRS 45. Equipment and capital construction projects with scopes greater than these amounts shall be reported as part of the KCTCS Quarterly Financial Report. 134

15 DRAFT All units and individuals within KCTCS incurring financial obligations of KCTCS funds resulting from this authorization shall observe and adhere to applicable laws, regulations, and policies of the Commonwealth of Kentucky and the KCTCS Board of Regents, which govern the expenditure and disbursement of funds. Heads of the various budget units shall not authorize nor incur financial obligation in excess of the budget authorization for that budgetary unit. This budget and its provisions will be effective July 1, 2015, through June 30, ADOPTED, this twelfth day of June Porter G. Peeples, Sr., Chair KCTCS Board of Regents Betsy E. Flynn, Secretary KCTCS Board of Regents Jay K. Box, Ed.D. KCTCS President 135

16 DRAFT Attachment D Kentucky Community and Technical College System Statement of Revenues and Expenditures (in thousands) PRIOR YEAR ORIGINAL REALIZED REALIZED % BUDGET TO DATE % REVENUES General Fund State Appropriations $ 153, $ 190,162 $ 152, Tuition and Charges 224, , , Noncredit Tuition 2, ,904 3, Investment Income 1, ,150 1, Governmental Grants and Contracts 31, ,470 31, Sales and Services 17, ,672 25, Other , Budget Reserve (Nonrecurring) 21, ,151 21, Total General Fund 452, , , Restricted Funds 250, , , Total Revenues and Appropriated Fund Balances $ 702, $ 924,118 $ 708, EXPENDITURES BY PROGRAM Instruction $ 167, $ 260,333 $ 159, Public Service 29, ,196 28, Academic Support 28, ,287 31, Student Services 45, ,790 43, Institutional Support 65, ,582 69, Student Financial Aid 226, , , Operations & Maintenance 55, ,553 76, Total Expenditures by Program 617, , , Budget Reserve (Nonrecurring) 21, ,151 21, Total Expenditures and Budget Reserve $ 638, $ 924,118 $ 649, Revenues in Excess of Expenditures $ 63,734 $ 58,

17 DRAFT Attachment E KENTUCKY COMMUNITY AND TECHNICAL COLLEGE SYSTEM Statement of Net Position As of March 31 - Comparative (in thousands) ASSETS Current Assets Cash and cash equivalents $ 256,479 $ 265,474 Loans, accounts and gifts receivable, net 33,099 31,440 Other current assets 1, Total current assets 290, ,595 Noncurrent Assets Restricted cash and cash equivalents 19,146 18,827 Loans and other receivables 5,708 4,510 Endowment investments 50,233 46,571 Prepaid OPEB 0 10,586 Other long-term investments 17,012 16,166 Capital assets, net 595, ,766 Total noncurrent assets 687, ,426 Total assets 978, ,021 LIABILITIES Current Liabilities Accounts payable and accrued expenses 3,895 3,010 Employee withholdings and deposits 16,583 16,546 Compensated absences - current 1,593 1,200 Unearned revenue 22,887 22,228 Leases payable - current portion 2,468 2,097 Total current liabilities 47,426 45,081 Noncurrent Liabilities Leases payable - noncurrent portion 17,819 14,229 Compensated absences - noncurrent 14,350 10,800 Other long-term obligations 1,301 1,301 Total noncurrent liabilities 33,470 26,330 Total liabilities 80,896 71,411 NET POSITION Net Investment in capital 575, ,440 Restricted 108, ,651 Unrestricted 213, ,519 Total net assets $ 897,525 $ 921,

18 138 DRAFT

19 ACTION RATIFICATION OF Agenda Item J-1 PERSONNEL ACTIONS September 18, 2015 Recommendation That the KCTCS Board of Regents ratify the personnel actions listed in the agenda materials. Rationale The KCTCS President routinely administers personnel actions using the authority delegated to him by the Board of Regents, March The Board reviews and ratifies these actions at each regularly scheduled Board meeting. Since personnel actions occur regularly throughout the year, those personnel actions are allowed to take place, subject to Board of Regents ratification at the next Board meeting. The format of this agenda item has been used for the past few years to provide the Board basic information for its action, without providing unnecessary detailed data. o Individual personnel actions (certain administrative appointments and retirements, faculty promotions with tenure, and deaths). o Summary personnel actions (academic appointments, administrative appointments, reappointments, leaves of absence, retirements, resignations, non-renewal of appointments, and faculty promotions without tenure). Background Kentucky Revised Statute gives governing boards exclusive control of employment, tenure, and official relations of employees. 139

20 Personnel Actions Presented to the KCTCS Board of Regents September 18, 2015 I. Individual Personnel Actions A. Administrative Appointments No action to report. B. Administrative Retirements System Office Chlopan, Richard R., Chief Information Officer, 06/01/2015 Roberts, Douglas M., System Director of Budget and Financial Planning, 07/01/2015 C. Promotions No action to report. D. Special Leaves with pay longer than 90 days No action to report. E. Deaths Somerset Community College Hamm, Margo, Professor/Associate Dean, 05/05/2015 II. Summary Personnel Actions A. Academic Appointments Accounting, 1 Adult Education, 1 Agriculture, 1 Art, 1 Business Administration Systems, 1 Business, Information Technology, 1 Communications, 1 Cosmetology, 2 Criminal Justice, 2 Criminal Justice, Human Services, and Social Work, 1 Culinary Arts, 1 Dental Assisting/Dental Hygiene, 1 Developmental Reading, 1 B. Administrative Appointments Acting Chief Academic Officer, 1 Admissions Advisor, 1 Associate Dean, 4 Chief Academic Officer Interim, 1 Chief Institutional Advancement Officer, 1 Chief Institutional Officer, 1 Chief Student Affairs Officer, Developmental Studies, 1 Education, 1 English, 2 Equine Studies, 1 History, 1 Human Services, 1 Industrial Technologies, 1 Medical Assisting, 1 Nursing, 7 Practical Nursing, 1 Radiography, 1 Sonography, 2 Welding, 1 Dean of Allied Health, 1 Dean of Academics, 1 Dean of Administrative Services, 1 Dean of Institutional Effectiveness, 1 Dean of Student Affairs, 1 Dean of Community Workforce Economic Development, 1

21 Director of Counseling Services, 1 Director of Knowledge Management, 1 Division Chair, 6 C. Reappointments Accounting, 1 Administrative Office Technology, 1 Adult Education, 6 Advanced Integrated Technology, 5 Agriculture, 1 Allied Health, 8 Anatomy & Physiology, 4 Applied Process Technology, 2 Art, 3 Associate Degree Nursing, 14 Auto Body Repair, 1 Automotive Program, 3 Automotive Technology, 5 Aviation, 5 Biology, 22 Bluegrass and Traditional Music, 3 Business, 2 Business Administration, 4 CAD/Surveying, 1 Carpentry, 1 Certified Nurse Aide, 1 Challenger Center, 1 Chemistry, 1 Cinematic Arts, 1 Civil Engineering Technology, 1 Clinical Laboratory Technician, 2 Coal Academy, 1 Communications, 8 Communications/Humanities, 9 Computer, 1 Computer & Information Technologies, 1 Computer Aided Drafting, 1 Computer Aided Drafting and Design, 1 Computer and Information, 2 Computer Information, 2 Computer Information Systems, 4 Computer Information Technology, 5 Computerized Manufacturing & Machining, 3 Construction Technology, 1 Cosmetology, 6 Criminal Justice, 3 Culinary Arts, 4 Diesel, 2 Dental Hygiene, 5 Developmental Studies, 2 Diesel Mechanics, 1 Early Childhood Education, 2 Education, 1 Electrical Engineering, 1 Electrical Technology, 1 Electricity, 3 Electricity/Electronics Technology, 3 Electronics Technology, 1 Engineering Technology, 1 English, 14 English/Communications, 1 Program Facilitator, 1 Provost, 1 Web Services Manager, 1 English/Writing, 1 Equine Studies, 1 Fine Arts, 2 First Year Experience, 2 FRAME Program, 1 Geology, 2 Health Information Technologies, 3 Health Sciences, 2 Healthcare Facilities Management, 1 Heavy Equipment, 1 High School Math Initiative, 1 History, 8 Honda Automotive Program, 2 Human Services, 1 HVAC, 1 Industrial Automation/Maintenance, 2 Industrial Maintenance Technology, 2 Industrial Maintenance, 5 Industrial Technologies, 5 Information Management and Design, 1 Institutional Effectiveness, 1 Interdisciplinary Early Childhood Education, 1 Law Enforcement, 1 Learning Center, 1 Learning Resource Center, 1 Librarian II, 1 Librarian III, 1 Librarian IV, 2 Library, 2 Machine Tool, 1 Maintenance Technology, 1 Mathematics, 24 Medical Assistance, 1 Medical Assisting, 1 Medical Information Technology, 2 Medical Lab Tech, 1 Mining, 1 Natural Science/Math, 10 Non Division, 1 Nurse Aide, 1 Nursing, 50 Occupational Therapy Assistant, 2 Office System Technology, 2 Oral Communications, 3 Paralegal Technology, 1 Paramedic, 3 Paramedic Program, 1 Paramedic Technology, 1 Pharmacy Technology, 4 Philosophy, 2 Physical Therapist Assistant, 4 Physics, 1 Plumbing, 1 Practical Nursing, 4 Practical Nursing/Nurse Aide, 1 Psychology, 7 141

22 Radiography, 3 Reading/QEP, 1 Respiratory, 1 Respiratory Care, 5 Social Science, 2 Sociology, 3 Student Services, 3 Student Support Services, 2 Surgical Technology, 5 Technology and Related Science, 2 Theater Arts, 1 Toyota Automotive Program, 1 Transitional Education, 2 Transitional English, 2 Transitional Math, 3 Transitional Reading, 2 Veterinary Technology, 2 Visual Arts, 1 Visual Communications, 1 Welding, 7 Welding Technology, 2 Workforce Solutions, 1 D. Terminal Reappointments Faculty, 5 E. Leaves of Absence Medical Leave, 2 F. Non-Administrative Retirements Faculty, 23 Staff, 15 G. Resignations Faculty, 31 H. Non-Renewal of Appointment Faculty,

23 ACTION KCTCS BIENNIAL BUDGET Agenda Item J-2 BUDGET REQUEST September 18, 2015 Recommendation The KCTCS Board of Regents approve the biennial budget requests, operating and capital, for KCTCS to be submitted to the Council on Postsecondary Education (CPE). Statutorily, KCTCS must submit its requests, operating and capital, by November 15, The KCTCS operating and capital requests will be developed in cooperation with the CPE guidelines. Operating Funds Request The biennial budget request for operating funds for KCTCS per the guidelines developed by CPE is as follows: Base Appropriation* $190,162,300 $190,162,300 $199,798,000 Tuition Stabilization** 1,750,000 1,750,000 Performance Funding*** 9,635,700 9,635,700 Workforce Development Trust**** 5,000,000 5,000,000 Total** *** $190,162,300 $206,548,000 $216,183,700 * Base Appropriation for includes Performance Funding awarded on a nonrecurring basis in with the understanding that if performance measures are achieved, funding will become recurring to the base appropriation in the following year. ** Tuition Stabilization is proposed as an offset for help keep tuition at affordable rates. *** Performance F unding for credential production, final details to be determined. **** CPE anticipates inclusion of a request of $5.0 million in bond funds earmarked for KCTCS within the request for Bucks for Brains. The funds would be used to establish a Workforce Endowment with KCTCS to provide a dollar for dollar match. *****Total reflects anticipated achievement of all performance funding measures, allocation of tuition stabilization and workforce endowment funds. Capital Funds Request The biennial budget request for capital funding for the biennia is summarized in Attachment A and detailed in the supplemental document, Biennial Capital Budget Request Capital Budget Request $708,927,

24 Rationale The KCTCS President has worked with the CPE President and the university presidents to develop a biennial budget operating funds request approach that: Recognizes the economic situation facing the Commonwealth of Kentucky in the biennium. Recognizes the need for an additional general fund appropriation for each institution of postsecondary education. Provides opportunity for the institutions and the CPE to cooperatively seek additional funding. The KCTCS President has worked with the 16 KCTCS college presidents and the CPE President and staff to develop a biennial capital budget request that fully meets KCTCS s capital needs for the biennia. The proposed KCTCS biennial capital budget request is based on the KCTCS Six-Year Capital Plan [compiled from project information submitted by the 16 KCTCS college presidents through a Strategic Needs Analysis (SNA) submitted pursuant to statute to the Legislative Capital Planning Advisory Board.] The KCTCS capital budget request: The summary is ordered by project priority for the Bond/General Funds projects and in alphabetical order for the Other Funds projects. Encompasses new construction, maintenance, renovation and expansion of existing facilities, capital equipment, and information technology equipment. Recognizes the importance of maintaining the existing physical plant in a condition that enables the colleges to provide quality educational programs and services. Emphasizes new construction projects that expand instructional capacity and new construction projects that are continuations of initiatives begun in previous biennia. Consists of 60 projects, resulting in a KCTCS capital budget request of approximately $709 million. Background The KCTCS Board of Regents has an opportunity to present a biennial budget request to be considered by the Council on Postsecondary Education, the Governor, and the Kentucky General Assembly in developing the appropriations to institutions of postsecondary education. The recommended biennial operating and capital budget request was developed by the KCTCS President working with the CPE President, the university presidents, and the KCTCS President s Leadership Team. 144

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29 ACTION KCTCS INTERIM PROJECT APPROVAL Agenda Item J-3 REQUEST: PIKEVILLE TECHNOLOGY CENTER September 18, 2015 Recommendation The KCTCS Board of Regents approve the construction of the Technology Center to be located on the Pikeville Campus of the Big Sandy Community and Technical College. Rationale KRS (7) requires that an unbudgeted capital construction project with a scope greater than $600,000 be approved by the KCTCS Board of Regents and submitted on to the Kentucky Council of Postsecondary Education for approval. The scope of the Pikeville Technology Center will be $4,500,000. This project will be funded with $3,278,000 of grant funds and $1,222,000 matching agency funds. Background KCTCS has applied for federal grant funding from the Appalachian Regional Commission, the Housing and Urban Development Community Development Block Grant, and the Economic Development Administration for the construction of a technology center. These federal grant funds combined with Big Sandy Community and Technical College funds comprise $4.5 million. KCTCS proposes to construct an approximate 15,000 square foot technology center with classroom space, lab space, and a high-bay training area to house a telecommunications training program. The facility will be located at Big Sandy Community and Technical College Pikeville Campus. The training curriculum presently being planned would lead to certifications in telecommunication installation and maintenance with options to continue into a degreed program of study. Training will also be available to upgrade existing employee skill sets. Big Sandy Community and Technical College will work with industry leaders to ensure that employer needs are met in the curriculum, as well as meeting the standards and certification requirements for the Electronics Technicians Association International. Course work will include, but is not limited to, basic electricity; cable splicing; fiber optics; copper; pole climbing; and customer service training. Industry demand for technicians experienced in telecommunications is expected to continue to increase, particularly in the region, as a major dark fiber construction project is underway serving eastern Kentucky and eventually the entire state. 149

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31 INFORMATION: Agenda Item J-4 GOVERNMENTAL ACCOUNTING STANDARDS BOARD September 17, 2015 The Governmental Accounting Standards Board (GASB) issued statement 68, Accounting and Financial Reporting for Pensions effective for fiscal years beginning after June 15, Therefore, KCTCS financial statements must include the accrued actuarial pension liability for Kentucky Employees Retirement System (KERS) and Kentucky Teachers' Retirement System (KTRS) and the additional components associated with recording the pension liability. For informational purposes, (Attachment A) is included in your packet to illustrate the presentation and effect that GASB 68 will have on June 30, 2015, financial statements and its financial statements hereafter. Background The primary objective of GASB s Statement 68 is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided to other entities. Statement 68 results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions. Statement 68 is intended to provide decision-useful information, supporting assessments of accountability and create additional transparency. 151

32 Attachment A KENTUCKY COMMUNITY AND TECHNICAL COLLEGE SYSTEM Statement of Net Position (unaudited) As of June - Comparative (in thousands) ASSETS Current Assets Cash and cash equivalents $ 190,254 $ 210,543 Loans, accounts and gifts receivable, net 27,279 25,105 Deferred outflows - KERS 11,722 0 Deferred outflows - KTRS 6,668 0 Other current assets 4,694 2,732 Total current assets 240, ,380 Noncurrent Assets Restricted cash and cash equivalents 26,690 15,224 Loans and other receivables 6,209 4,529 Endowment investments 51,423 49,474 Prepaid OPEB 0 1,679 Other long-term investments 16,880 16,634 Capital assets, net 604, ,298 Total noncurrent assets 705, ,838 Total assets 946, ,218 LIABILITIES Current Liabilities Accounts payable and accrued expenses 10,631 6,236 Employee withholdings and deposits 16,231 16,305 Compensated absences - current 1,214 1,594 Unearned revenue 9,631 27,982 Deferred inflows - KERS 2,247 0 Deferred inflows - KTRS 15,439 0 Leases payable - current portion 3,034 3,153 Total current liabilities 58,427 55,270 Noncurrent Liabilities Leases payable - noncurrent portion 24,252 17,490 Compensated absences - noncurrent 10,928 14,349 Net pension liability - KERS 174,855 0 Net pension liability - KTRS 209,139 0 Other long-term obligations 846 1,301 Total noncurrent liabilities 420,020 33,140 Total liabilities 478,447 88,410 NET POSITION Net Investment in capital 577, ,655 Restricted 107,610 93,808 Unrestricted (216,952) 164,345 Total net assets $ 467,953 $ 842,

33 UPDATE: Agenda Item J-5 KCTCS QUARTERLY FINANCIAL REPORT September 18, 2015 The financial statements depict activity through the fourth quarter of fiscal year ; the quarter ending June 30, Information for these statements was derived from the KCTCS Administrative Financial System. The Statement of Revenues and Expenses (Attachment A) reflects actual program and operational expenditures compared to the budget approved by the KCTCS Board of Regents, June 13, This report reflects total revenues of $826 million, 89 percent of the budgeted revenue and appropriated funds. The Statement of Revenues and Expenses also reflects current fund expenses and budget reserve of $837 million, 91 percent of the expenses budgeted for the year. The Statement of Net Assets (Attachment B) reflects the overall financial position of the System and includes assets, liabilities, and net position. Background The Annual Budget Adoption Resolution (adopted by the Board of Regents at its annual June meeting) states, The KCTCS Quarterly Financial Report shall contain sections that reflect the KCTCS July 1 operating budget, amendments to the operating budget, and expenditures to date. Attachment A, the Statement of Current Funds Revenues and Expenses, is designed to fulfill this requirement. Attachment B, the Statement of Net Position (Balance Sheet), although not specifically required in the Board s Annual Budget Adoption Resolution, has also been included in the Quarterly Financial Report to give the Board a periodic snapshot of the KCTCS financial position using the most common accounting-based schedule. 153

34 154 Attachment A

35 Attachment B KENTUCKY COMMUNITY AND TECHNICAL COLLEGE SYSTEM Statement of Net Position (unaudited) As of June - Comparative (in thousands) ASSETS Current Assets Cash and cash equivalents $ 190,254 $ 210,543 Loans, accounts and gifts receivable, net 27,279 25,105 Deferred outflows - KERS 11,722 0 Deferred outflows - KTRS 6,668 0 Other current assets 4,694 2,732 Total current assets 240, ,380 Noncurrent Assets Restricted cash and cash equivalents 26,690 15,224 Loans and other receivables 6,209 4,529 Endowment investments 51,423 49,474 Prepaid OPEB 0 1,679 Other long-term investments 16,880 16,634 Capital assets, net 604, ,298 Total noncurrent assets 705, ,838 Total assets 946, ,218 LIABILITIES Current Liabilities Accounts payable and accrued expenses 10,631 6,236 Employee withholdings and deposits 16,231 16,305 Compensated absences - current 1,214 1,594 Unearned revenue 9,631 27,982 Deferred inflows - KERS 2,247 0 Deferred inflows - KTRS 15,439 0 Leases payable - current portion 3,034 3,153 Total current liabilities 58,427 55,270 Noncurrent Liabilities Leases payable - noncurrent portion 24,252 17,490 Compensated absences - noncurrent 10,928 14,349 Net pension liability - KERS 174,855 0 Net pension liability - KTRS 209,139 0 Other long-term obligations 846 1,301 Total noncurrent liabilities 420,020 33,140 Total liabilities 478,447 88,410 NET POSITION Net Investment in capital 577, ,655 Restricted 107,610 93,808 Unrestricted (216,952) 164,345 Total net assets $ 467,953 $ 842,

36 156

37 UPDATE: Agenda Item J-6 SUPPLIER DIVERSITY REPORT September 18, 2015 KCTCS defines diverse suppliers as those businesses owned by ethnic minorities, women, veterans, or the physically challenged. Fiscal Year (FY) 2015 data (July through June) are reported in Attachment A. The data indicate for FY 2015 that KCTCS has spent $4.1 million (7.8 percent) of a total $52.2 million in impactable discretionary spend with diverse suppliers. In terms of business conducted, the percentage spent with diverse suppliers as compared to the total spend was slightly higher in FY2015 (13.0%) compared to FY 2014 (12.5%). However, due largely to reductions in the KCTCS operating budget, $1.4 million less was spent with diverse suppliers in FY2015 as compared to FY2014; a 1.4 percent decline. In terms of dollars spent with all suppliers, FY 2015 reflects an overall decline in impactable spend of $8.2 million, or a 13.5 percent decline ($60.4-$52.2 million). This decline in total spend is also reflective of continued tight budgetary constraints of flat state support and less tuition revenue per the decline in enrollment. KCTCS staff continue to work on diverse supplier matching with registering diverse suppliers through the KCTCS supplier diversity registration portal and analyzing supplier data to ensure the integrity and consistency of the data for reporting. Improvements continue to be employed with the KCTCS supplier diversity registration portal working internally with System Office Technology Solutions staff. On October 1, 2015, KCTCS will hold its third annual Supplier Diversity Fair. The event will be held at the Pritchard Community Center in Elizabethtown. The event is free for diverse suppliers and allows them to meet face-to-face with representatives from all 16 KCTCS colleges, as well as, decision-making personnel from the System Office. More than 300 guests and over 100 exhibitors are expected to attend this event. Buyers and officials from other organizations such as the Kentucky Finance and Administration Cabinet, the U.S. Small Business Administration (SBA), the University of Kentucky, Commerce-Lexington, Lexington-Fayette Urban County Government, are also expected to be in attendance to discuss business opportunities. The event includes not only the opportunity for diverse businesses to showcase their business, but also breakout sessions to assist diverse suppliers to grow their business, i.e., Business Opportunities with KCTCS. Conference calls, college visits, outreach programs, and other informational assistance to support the KCTCS Supplier Diversity Initiative continue. Staff continue to actively participate in events and trade shows, including local chambers of commerce and professional trade organizations such as: Commerce Lexington Spring Opportunity Exchange. Lexington Fayette Urban County Government s training session for small/minority suppliers. Kentucky Public Procurement Association Reverse Trade Show. Kentucky Procurement Technical Assistance Center Small Business Expo. Gov Pro Conference sponsored by the Kentucky Small Business Development Center. 157

38 Bluegrass Minority Business Expo. Background The Finance, Technology, and Human Resources Committee has asked to be updated periodically regarding the KCTCS Supplier Diversity Initiative. The most recent report was made at the March 13, 2015, Board of Regents meeting. 158

39 159 Attachment A

40 160

41 UPDATE: Agenda Item J-7 OFFICE OF AUDIT SERVICES September 18, 2015 The KCTCS Office of Audit Services provides this semi-annual report as a means to inform the Board of Regents of activities within the System and to seek input as to any activities which the Board wishes the Office to review. Background Audit Services conducts internal audits of KCTCS colleges and system-level departments, as well as, special reviews requested by KCTCS management. Audit Services also provides services, which include consulting with management, providing input during the development and implementation phases of financial policies and procedures, training and assisting employees with policies and procedures, and assisting the KCTCS external auditors by reducing the level of their scope of work through normal internal audit activities or other requested activities. Additionally, Audit Services ensures that KCTCS has formal written standards of internal controls and procedures designed to protect KCTCS assets from loss or misuse. STANDARD AUDIT REVIEWS: Madisonville Community College A review of Madisonville Community College was performed for the period September May Two formal recommendations for improvement were recommended and have been addressed by college management. Blackboard Student Services In conjunction with KCTCS vendor management, a review of Blackboard Student Services is currently underway and will evaluate recorded calls for accuracy and metric verification based on service level agreements. We will also review chats/tickets for quality, accuracy, and timeliness of response. Environmental Health and Safety Compliance Initial compliance reviews of environmental health and safety regulations were conducted by Facilities Support Services personnel at each of the colleges and deficiencies were observed and reported to the colleges for correction. Audit Services has performed follow-up reviews at four colleges, thus far, to verify that the reported deficiencies were addressed. We noted some deficiencies that still have not been corrected at each college and these findings have been communicated to both the college and Facilities Support Services personnel for corrective action. These reviews will be on-going and generally performed during the course of our normal college reviews. 161

42 AUDIT REVIEWS FROM CHANGE IN LEADERSHIP: Big Sandy Community and Technical College With the June, 2015, retirement of Dr. George Edwards and the appointment of Dr. G. Devin Stephenson as the new President of Big Sandy Community and Technical College, a review was performed to evaluate its internal controls and operations. Three recommendations for improvement were presented and appropriately addressed by management. Maysville Community and Technical College With the January, 2015, retirement of Dr. Ed Story and appointment of Dr. Stephen Vacik as President of Maysville Community and Technical College, a review was performed to evaluate its internal controls and operations. Ten recommendations for improvement were presented and appropriate corrective action has been taken by management. In addition, a recommendation was made to the KCTCS Human Resources Director to revise and provide system-wide guidelines regarding employee overload assignments. A revised overload policy has been drafted and is undergoing review and approval by KCTCS management. SPECIAL REVIEWS: Student Financial Aid Audit Services is currently working with Student Financial Aid (SFA) and Technology Solutions on an on-going basis to: Assist in development and testing of exception reports for SFA. Conduct parallel analysis of data validity of the exception reports (to review the same time period of testing and then compare the errors discovered with what the exception reports uncovered). Assist SFA in developing proper documentation protocol when exception reports (once in use) uncover errors and they are corrected during the course of normal business (what kind of documentation is needed to provide to an auditor to demonstrate an error was found and corrected prior to it being discovered during the audit). Assist SFA in working with external auditors to verify and document that the exception reports being created are considered valid internal controls; that documentation protocols (created in the above line) are valid; and that any errors discovered and corrected during a given aid year using the exception reports would not be considered a finding on a future audit. Redirect focus to other areas as risk assessment dictates. 162

43 Jefferson Community and Technical College Human Resources Follow-up KCTCS external auditors, Dean Dorton Allen Ford (DDAF), conducted a review of Human Resources/Payroll at Jefferson Community and Technical College in 2014 and issued recommendations in the areas of adjunct faculty hiring, full-time employee hiring, temporary employee wages, and employee overload assignment authorization. Audit Services performed a follow-up review this year to ascertain if the college had implemented the improvements and procedures recommended by DDAF. Significant progress has been made in formalizing procedures in these areas; however, six additional recommendations for improvements have been presented to the college for implementation. Review of Grants Associated with Terminated Employees Three System Office employees were terminated in 2015 as a result of violating human resources policies. Part of their responsibilities included oversight of four grants - two Perkins, one CPE, and one non-governmental. To ensure that grant requirements were fully complied with and no misuse of grant funds occurred, Audit Services reviewed all grant activity linked to the three individuals and found no improper transactions. ASSISTANCE TO THE EXTERNAL AUDITOR: Assistance is provided each year to our external auditors, DDAF, during the course of their audit of the KCTCS financial statements to reduce the scope of their field work and minimize audit fees paid by KCTCS. Also, in connection with the federally-required A-133 audit of grants and contracts awarded to Audit Services, compliance testing of grants and contracts selected by DDAF is also performed. RISK ASSESSMENT: To develop our annual audit plan, Audit Services conducts a risk assessment of all significant KCTCS units. Each unit is assigned a relative risk rating (on a scale of 1-5 with 1-low, 3- medium, and 5-high) for the following risk areas: Control Risk Quality and stability of internal control environment Operational Risk Complexity and diversity of operations Financial Risk Impact of errors, omissions, and losses Regulatory Risk Level of regulatory concerns Based upon this evaluation, the highest relative risk units within KCTCS for fiscal year 2015 are: 1. Student Financial Aid (3.0 medium risk) 2. Federal and State Grants and Contracts (2.8 medium risk) 3. Human Resources/Organizational Development (2.6 medium risk) No KCTCS units are deemed to have a high risk rating. 163

44 164

45 Agenda Item J-8 UPDATE: TECHNOLOGY SOLUTIONS REPORT September 18, 2015 Next Generation Kentucky Information Highway (KentuckyWired) High speed internet has become a utility and not a luxury in the eyes of globally competing businesses. If you do not have this basic utility, you are not competing on a level playing field. Kentucky is currently ranked 46th in the United States. Technology Solutions staff have been working closely with leaders in state government, higher education, and private investors on the planning of a 3,000 mile state wide fiber optic network in Kentucky. All KCTCS locations are considered community anchor institutions and will be connected to this network by fall 2018 if construction goes as planned. When the network is live, KCTCS institutions will have access to network speeds of times greater than currently possible for the same price as current broadband access. Overall, the project is estimated to cost between $250 million to $350 million and will be supported by approximately $30 million in state bond and $15 to $20 million in federal grants. The remainder of the funding will come from private investment. Online Security Awareness According to a leading research firm, the Ponemon Institute, the number one leading cause of data security breaches in 2014 resulted from non-malicious employee error (39%). Recognizing this critical risk, Technology Solutions staff continue awareness efforts to inform students, faculty, and staff about operating securely online. These efforts have included a monthly newsletter, Security Sense; access to security training modules on a learning platform, Atomic Learning; and an entire section in the online Training and Learning Center dedicated to security. In addition to the initiatives above, Technology Solutions staff use a tool that scans laptops and servers for sensitive data such as social security numbers, credit card numbers, and passwords. The software then notifies the computer user so that they can delete this information from their laptops or store it in an encrypted area. Travel and Expense Module Implementation In June Technology Solutions and Business Services staff implemented the Travel and Expense module within PeopleSoft Financials system. This new module will allow for complete online entry and processing of travel and non-travel reimbursements. It includes workflow approvals, direct deposit of reimbursement, the ability to add backup documentation online, and automated employee validation incorporating changes from the Human Capital Management system. The new module also allows for easy viewing of the current status of a given request from initial submission all the way through to payment. Training and Learning Center Last summer, the System Office Technology Solutions department conducted a survey to determine technological needs across the system. The survey results indicated the need for training resources as one of the top priorities. In response to that need, Technology Solutions implemented a strategy to develop and expand the Training and Learning Center (TLC). The 165

46 TLC is a one stop source for all technology related training needs. It includes information, resources, guides, and tutorials for products such as PeopleSoft, Skype, SharePoint Online, OneDrive, and others that systems staff and faculty use every day. The TLC will continually be evolving as content is added and new systems are implemented. Background Technology Solutions presents an update at each quarterly KCTCS Board of Regents meeting. The update at the March Board of Regents meeting is an annual report. 166

47 UPDATE: Agenda Item J-9 BUILDSMART STATUS REPORT September 18, 2015 At the September 2015 meeting, KCTCS President Jay K. Box will provide an update on the status of the 16 KCTCS BuildSmart projects. The attached report (Attachment A) entitled STATUS of BUILDSMART INITIATIVES provides information about the status of the funding for each project. Background The 2014 Regular Session of the General Assembly enacted House Bill 235 (the Biennial Budget Bill ) which provided for $194,000,000 of KCTCS Agency Fund Capital Projects referred to as the KCTCS BuildSmart Investment for Kentucky Competitiveness. The KCTCS BuildSmart initiative is a public-private partnership and investment initiative that will provide a total of $194 million in funding for the top capital project at each of the 16 KCTCS colleges. The benefits of the KCTCS BuildSmart Investment are significant for students, communities, and the Commonwealth. KCTCS students across Kentucky will benefit from having additional state-of-the art facilities that will further enhance their individual educational experiences and that of their fellow students. Local communities and the Commonwealth of Kentucky will benefit from the enhanced economic and workforce development that will result from these new and renovated facilities throughout the Commonwealth. Funding for the KCTCS BuildSmart initiative is to consist of $145,500,000 in authorized agency bonds and $48,500,000 from private and other funds raised by the KCTCS colleges. The agency bonds will be issued by the Kentucky State Property and Buildings Commission on behalf of KCTCS. Agency bond debt service is to be paid from revenue collected from a mandatory student fee of $4 per credit hour for all KCTCS students in and an $8 per credit hour mandatory student fee for all KCTCS students beginning in and continuing thereafter until the agency bond debt service is fully paid. At the December 2014 Board meeting, the KCTCS Board of Regents adopted three resolutions required to facilitate the capital project financings in support of the KCTCS BuildSmart Investment: the KCTCS Reimbursement Resolution, the KCTCS Mandatory Fee Resolution, and the KCTCS Authorizing Resolution.. More detailed information on each project and the one state funded project will be provided in the semi-annual KCTCS Facilities Management and Sustainability Status Report to be presented at the December 4, 2015, Board of Regents meeting. 167

48 168 Attachment A