National Institute on Aging

Auditor Details Financial Shortcomings at Kentucky State University

Mike Harmon, auditor for the Commonwealth of Kentucky, has released a report on the financial situation at historically Black Kentucky State University. The news is not good.

The examination report contained 20 significant findings including $3.34 million in federal grant funds being at risk, $2.7 million withdrawn from internal endowed funds to supplement cash balances, undocumented credit card transactions, wasteful spending on extravagant bonuses and benefits, and crippling budget and procurement failures, all occurring in a chaotic accounting environment that lacked effective safeguards and responsible management and board oversight.

“This is not the first time this office has conducted a special examination of Kentucky State University. In 2000, a report by former Auditor Ed Hatchett detailed 16 findings addressing university financial controls,” said Harmon. “Many of the issues identified in that report still appear to be problems within the university.”

Harmon added that “the big question now is, what’s next for KSU? Our examination makes numerous recommendations for the university to address areas of concern identified in the report. Ultimately, changes within the university will need to be made and carried out by KSU’s next president, KSU Board, university administrators, and to a certain extent the General Assembly. The many problems found in our examination did not happen overnight, and frankly they will not be solved overnight. What is clear is that past practices at KSU detailed in our exam report must come to an end.”

Auditor Harmon’s office is referring the examination to the U.S. Attorney’s Office for the Eastern District of Kentucky, the Kentucky Office of the Attorney General, the U.S. Department of Treasury, and the U.S. Department of Education.


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