KSU needs $23M to avoid ‘tremendous chaos.’ A bill to provide funding makes progress
A bill that would give Kentucky State University $23 million to cover its budget shortfall passed out of the House Committee on Appropriations and Revenue Tuesday.
HB 250 outlines requirements for the funds, including the Council on Postsecondary Education overseeing use of the money and a repayment plan. The university and CPE also will create a management improvement plan, to be submitted to the legislature by Nov. 1, with financial reports regularly given to the legislature over the next several years.
KSU is the only public historically Black university in the state, and is also a land grant university. Rep. James Tipton, the sponsor of the bill, said it is needed to protect the future of the university.
“The most important reason, I think, is we need to do this for the students who are currently students of KSU and we need to do this for the future students of KSU,” Tipton said. “Because without this, there’s going to be tremendous uncertainty. There’s going to be tremendous disruption. There’s going to be tremendous chaos.”
KSU previously has said it does not have the funds to operate beyond April, and the $23 million would be used to balance its budget for the current fiscal year. Additionally, KSU will need to cut $7 million from next year’s budget, said Aaron Thompson, president of CPE.
The $23 million is a loan to the university, which could be forgivable in the future, Tipton said.
Several representatives raised questions about how KSU reached a $23 million shortfall. Thompson pointed to areas of financial mismanagement under previous leadership, but also said the university had invested in necessary infrastructure in recent years.
Thompson said that addressing KSU’s finances “is not an easy lift,” and will take several years.
“If I told you that we can do everything that I think we should do in three years, I think I would be lying to you if I thought we could do everything,” Thompson said. “But I’ll tell you this: We can get them back in way that they’re able to grow and continuously improve without other intervention, as far as getting stable.”
KSU was placed under state oversight last year, with CPE conducting an investigation into the management and finances of the university. Former president M. Christopher Brown II resigned last summer, along with the former CFO Douglas Allen. Since then, concerns have been raised about Brown’s financial management at KSU.
At a CPE meeting in November, the new CFO Greg Rush said the university previously had an “overall lack of budgetary control, pretty much top to bottom,” including overspending in the president’s office by $850,000 one year.
CPE also found that the university would frequently not pay vendors and had significant debts to pay off. In CPE’s report, some KSU staff members were “told to ‘not answer their phones’ when vendors called.”
KSU is currently conducting a search for a new president, with the goal of naming the hire later this spring.