K-State Supports Release of Audit

MANHATTAN, Kan. - The Kansas Board of Regents released its recent review/audit of Kansas State University today, Friday, June 19, and the decision to do so was greeted positively by new K-State President Kirk Schulz.

 

"We agree with the regents that it is the correct decision to release this report in a spirit of openness and transparency," Schulz said. "Our new administration is working to rebuild the confidence of our alums and constituents. Getting this information out into the open should help with that."

 

Schulz emphasized that his administration is moving ahead with a new leadership team in place and transparent policies to prevent problems in the future.

 

"There is nothing we can do about the past. However, steps have been taken to ensure these situations do not happen again," Schulz said. "We are moving forward and making sure we are running our programs in a responsible way."

 

Nelson Galle, former chair of the Kansas Board of Regents, said he supports the release of the exit review, which covers the president's office, the KSU Foundation, K-State Alumni Association and the athletics department.

 

"A complete exit audit of the K-State entities that are not audited by the state is an excellent idea when there is a change in presidents," Galle said. "This audit was authorized and begun last fall by the Kansas Board of Regents. This was done so candidates for the presidency of K-State could be assured there would be few surprises after they were hired. I support the release and full disclosure of the audit results not only for use by our new president and his new team but for the benefit of the entire K-State family."

 

Prior to beginning the search for a new athletics director, Schulz made sure he was comfortable with athletics department oversight and processes. K-State's Intercollegiate Athletics Corporation adopted a new governance structure on May 6, 2009, as a result of a process that started months ago. Athletics staff and their audit firm started discussing ways to comply with strengthened Internal Revenue Service -- commonly referred to as 990 -- requirements late in 2008.

 

Members of the athletic governance board include John Currie, athletics director; Pat Bosco, vice president of student life; Bruce Shubert, vice president for administration and finance; Michael Holen, dean of the College of Education and Big 12 faculty athletics representative; Ruth Dyer, interim provost; and Charles Reagan, deputy to the president and chief of staff.

 

Currie said, like Schulz, he also supports an open and transparent university and athletics department.

 

"Dr. Schulz and I support the regents' decision to release this information," Currie said. "It's important to me that the athletics department, as an integral part of this university, operates as transparently as possible. We must be open and transparent if we are to maintain the trust of our donors and fans who, obviously, have been discouraged by recent events. But I am extremely excited about the future; we have great coaches and staff ready and willing to do the hard work that it takes to be successful."

 

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FAQ

 

* Why was an exit review done? A Kansas Board of Regents policy requires an exit review/analysis when there is a change in a university's CEO leadership and involving the CEO's handling of certain non-state funded accounts. The analysis was required because of Jon Wefald's retirement and was not undertaken because of any actions involving the athletics department.

 

* Who requested? The Kansas Board of Regents.

 

* Who conducted? The Kansas City office of Grant Thornton LLP, an auditing, management consulting, corporate finance, risk management and information technology firm.

 

* How much did it cost? $126,000 paid to Grant Thornton LLP.

 

* Who paid for it? The Kansas State University Foundation.

 

* What is covered by the exit review? It includes K-State entities that are not audited by the state: the president's office, the KSU Foundation, K-State Alumni Association and the athletics department.

 

* Does the university anticipate making any additional changes?

President Kirk Schulz and Athletics Director John Currie intend to review the exit analysis as soon as possible. After they see the details, they will analyze what actions need to be taken.

 

* Is the athletic department in the red right now; if so, by how much?

Athletics is nearing the end of a very tight budget year. At this point it is not clear whether or not athletics will break even this year. Like many units, the athletics department owns some restricted endowments which were invested by the KSU Foundation in a pool. With the poor performance of the stock market, many of these funds have lost money.

 

* Will there be further follow-up investigations to see if anything else was missed by the audit?

The new administration is considering follow-up reviews, in addition to new policies to ensure strong financial controls.

 

* Regarding the future of the athletic department: the declining economy slowed down the Wildcat Victory campaign ? will this slow it down further?

The entire economic climate has caused us to move forward cautiously and we are working to rebuild the trust and support of the entire K-State fan base.

 

* Will the Olathe Innovation Campus be filling the position vacated by Bob Krause?

Not at this time; there is a "soft" hiring freeze in effect due to budget cuts from the state.

 

* Was there any kind of buyout for Bob Krause?

No.

* Where can I find more information regarding the audit?

www.kansasregents.org

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Timeline

 

May 12, 2008 Jon Wefald announces retirement

 

May 20, 2008 Presidential search starts with regents naming Nelson Galle to chair the search committee

 

July 2, 2008 Search committee selected:  The six search committee members representing K-State faculty, staff and administration are: Fred Fairchild, president of K-State Faculty Senate and professor of grain science and industry; Mohammad Hosni, department head and professor of mechanical and nuclear engineering; Chris Sorensen, University Distinguished Professor of physics; Kathy Greene, director, Educational and Personal Development and director, Education Support Services and McNair Scholars Program; Virginia Moxley, dean and professor, College of Human Ecology; and Jennyfer Owensby, president, K-State Classified Senate.

 

The three members representing K-State students are: Careem Gladney, president of Alpha Phi Alpha and member and scholarship chair of Mortar Board senior honorary; Jonathan McLelland, K-State at Salina campus student body president; and Lydia Peele, K-State student body president, Board of Regents' Student Advisory Committee chair, Board of Regents' Admissions Task Force member, and member of Mortar Board senior honorary.

 

The four members representing alumni/foundation are: Lee Harris, president and chief operating officer, Cohen-Esrey Real Estate Services LLC; Lee Borck, Innovative Livestock Service Inc.; Jackie Hartman, professor of management, Colorado State University; and Randall Rathbun, Partner, Depew, Gillen, Rathbun & McInteer.

 

The two members representing the Manhattan community are: Dennis Mullin, president, Steel & Pipe Supply Company; and Jan Marks, CEO, Varney & Associates, CPAs LLC.

 

The two members representing the Kansas Board of Regents are: Jarold Boettcher, regent; and Reginald L. Robinson, president and CEO.

 

July 31, 2008 Regents select a search firm, Academic Search Inc.

 

August 2008 Regents select Grant Thornton LLP, an auditing, management consulting, corporate finance, risk management and information technology firm, to conduct the exit review.

 

Feb. 11, 2009 Kirk Schulz accepts post as next president of K-State to begin June 15.

 

May 18, 2009 John Currie accepts post as athletic director to begin June 8.

 

June 8, 2009 John Currie begins appointment as athletic director.

 

June 15, 2009 Kirk Schulz officially begins tenure as president of K-State.

 

June 19, 2009 Regents release the exit analysis.