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Herald-Leader
December 5, 2003
EKU tuition will increase for spring
KENTUCKIANS TO PAY $100 MORE AS REGENTS BRACE FOR CUTS
Bracing for a state budget cut of up to $4.5 million, Eastern Kentucky University's
Board of Regents yesterday imposed an unusual, one-time $100 tuition surcharge
on in-state students.
The charge will be $200 for out-of-state students, and pro-rated for part-time
students. It will be applied to spring semester tuition payments.
"Reaching this decision truly has been an agonizing process," EKU
President Joanne Glasser said. "It comes only after we have continued to
tighten our belts as much as possible without seriously compromising quality."
The increase is expected to bring in $1.2 million. Along with $2.5 million
already set aside in a contingency fund, the money would enable EKU to withstand
a 7 percent cut in state funding.
The move comes a few weeks after Western Kentucky University raised tuition
$200 for spring.
EKU has already cut $6 million from its budget, and administrators said further
cuts would damage academics.
"It is relatively unusual for there to be midyear increases, but the institutions
are caught between a rock and a hard place," said Tom Layzell, president
of the Council on Postsecondary Education. "They're trying to provide sufficient
revenues to meet anticipated budget issues, as well as provide revenues for
quality instruction."
EKU students appeared to understand the need for more money.
"Eastern is still really cheaply priced," said Gina Recker of Cincinnati,
who said she pays less than she would as an in-state student in Ohio.
The plan to address the anticipated shortfall was developed by the school's
Budget Advisory Council, which included representatives of the administration,
faculty, staff and students.
EKU is taking other steps to try to bring in more revenue. Dustan McCoy, chairman
of the Eastern Kentucky University Foundation, told the board that a new investment
manager has been hired for the university's portfolio, replacing three firms.
EKU also recently hired J. Barton Meyer, a veteran fund-raiser, as vice president
for university advancement.
Asked whether he was satisfied with EKU's recent fund-raising efforts, board
of regents chairman Fred Rice said: "No. We really haven't had a permanent
head of that department for some time. For the last few years, it has not been
productive."
The board also raised fees for students applying to EKU, from $25 to $30 for
undergraduates. Applications to graduate school, formerly free, will now cost
$30.
Parking violations will cost more, too. An analysis showed that EKU's fines,
unchanged since 1990, were the lowest among Kentucky universities and some out-of-state
peers. Those changes are expected to bring in an additional $100,000.
The board, meeting in Lexington, also extended Glasser's contract for two years
but did not raise her pay.
Rice noted that the presidents of many similar-size universities are paid more
than Glasser. "We don't want to see that continue, and we will address
that in the very near future," he said. "We feel she has done an outstanding
job."
EKU's in-state tuition and fees totaled $1,629 this fall for undergraduates,
a 9.5 percent increase over last year. Out-of-state tuition and fees totaled
$2,541 for residents of counties near the Kentucky border, and $4,425 for others.
Enrollment increased 4.6 percent this fall to 15,756 students.
Yesterday, some students said the increase would strain their finances further.
Julie Norckauer of Vandalia, Ohio, who leaves her car at home because she can't
afford out-of-state insurance rates, said she would try to change her state
of residency, but it would not be easy.
Brian Pears of Tompkinsville uses financial aid and an on-campus job to pay
for school.
"I think it will definitely make it harder for me as a student,"
he said. "I don't guess I'm angry about it, but it makes it a more difficult
situation."
The $200 increase at WKU, approved Oct. 31, means undergraduates there will
pay $2,025. That increase is permanent, but the school plans to cap the possible
tuition boost for 2004-05 at 10 percent.
The University of Kentucky is not planning any midyear tuition increases, spokeswoman
Mary Margaret Colliver said.
The Courier-Journal
December 5, 2003
Official: U of L limited audit
Scope of Shumaker study was restricted, auditor says
The University of Louisville and its foundation interfered with a university
audit of the school's former president by limiting the scope of the audit, the
state auditor has concluded.
A letter sent Wednesday from Auditor Ed Hatchett to UofL President James R.
Ramsey doesn't say who interfered in the audit of the travel and entertainment
expenditures of John Shumaker, Ramsey's predecessor.
But in an interview yesterday Hatchett said UofL's internal auditors told his
office that Ramsey, UofL Foundation Chairman Malcolm Chancey and an unidentified
foundation lawyer told the internal auditors that their review of Shumaker's
spending should be limited to credit card transactions and expense reimbursements.
Hatchett called that a violation of professional auditing standards.
"The internal auditors' work was thorough and professional in those areas
they examined, but the scope of their examination was too narrow to enable them
to assure the university community and the taxpayers that we know the whole
story of John Shumaker's spending practices," Hatchett said.
The state reviewed the university audit after questions arose about Shumaker's
spending practices at UofL and the University of Tennessee, where he was president
after leaving UofL. Shumaker resigned from UT in August amid an investigation
of his use of the UT airplane and credit card.
The Tennessee state auditor also reviewed Shumaker's spending, as did Connecticut
officials, where Shumaker also was a university president.
In telephone interviews yesterday, Ramsey and Chancey said Hatchett's characterization
of interference is wrong. Ramsey said the audit's scope was limited to transactions
that Shumaker had direct control over.
"I do take extreme exception to any statement that there was any intent
to limit the scope," Ramsey said by phone from California. "It comes
down to: Are we talking about Dr. Shumaker or are we talking about a broader-based
audit" of the university?
Hatchett's letter, released yesterday, said the UofL audit of Shumaker's credit
card expenditures and reimbursements left out possible charges by Shumaker or
his office on a university procurement card or in cases where the university
directly billed companies for travel or entertainment. It also excluded spending
on Amelia Place, the foundation-owned president's home, and personal service
contracts Shumaker may have requested, the letter said.
HATCHETT, WHO leaves office Jan. 6, said he would launch an investigation
of those four areas — including expenses paid by the foundation. He said
he expected cooperation from UofL and the foundation, and that state law gives
him authority to investigate universities and related entities.
Ramsey said the university would cooperate, and had offered to do so prior
to the letter. He said he also would ask university and independent auditors
to review spending in those areas even though Shumaker didn't have a procurement
card and didn't directly handle personal service contracts.
But Chancey said he believes Hatchett can't audit foundation spending because
the foundation is a private entity. Chancey said the foundation voluntarily
allowed UofL auditors to review Shumaker's credit card spending and expense
reimbursements.
"He has no more right to those records as anyone until this thing is settled
in the courts," Chancey said.
In a lawsuit against the foundation brought by The Courier-Journal, a Kentucky
Court of Appeals panel ruled last month that the foundation is a public entity
subject to the state's Open Records Act. Mike Risley, a foundation lawyer, said
last month the foundation would ask the Kentucky Supreme Court to review the
case. Chancey said the foundation board planned to meet next week to decide
on the appeal.
MEANTIME, Shumaker told The Courier-Journal yesterday through a lawyer
that on April 29, 2002, Hatchett — a UofL law school graduate — came
to his office and solicited a campaign contribution.
Hatchett told Shumaker that he would like the contribution for his upcoming
bid for attorney general because Shumaker was a "leader in the community"
and that his support would be important, according to Ann Oldfather, a Louisville
lawyer who delivered Shumaker's statement. "John listened to him and then
declined," Oldfather said. Shumaker already had accepted the UT presidency
by April 2002.
Hatchett acknowledged meeting with Shumaker, but said he spoke generally about
his plans to run for attorney general. Hatchett, who lost in the Democratic
primary in May, said he didn't specifically ask for a contribution during that
meeting, but asked Shumaker to consider giving one in the future.
Even though the auditor has the authority to review state universities, Hatchett
said he thought it proper to ask for Shumaker's support because Shumaker had
announced his departure from UofL and the two men were on good terms. "I
want to assert that conversation was completely separate from my work since
that time," Hatchett said.
Shumaker was UofL's president from July 1995 to June 2002, when he left to
become UT president. He resigned there in August amid questions about his use
of the UT plane and credit card, and after revelations that he had accepted
a $10,000 payment from Hyundai Motor Corp. in 1995 or 1996 while he was president
of Central Connecticut State University or shortly after he left the school.
A UT AUDIT found about $32,000 in questionable spending by Shumaker.
A Tennessee state audit said he may have violated the law by obstructing a probe
of his spending at UT.
An audit by the Connecticut State University System found Shumaker, while CCSU
president in 1995, went to South Korea for a conference but didn't get there
until after the event was over. That audit also said Shumaker spent three days
vacationing in another county, partially paid for by the university.
Amid those inquiries, UofL launched an internal audit of Shumaker's travel
and entertainment spending between January 1999 and June 2002.
That audit, released in September, reported the spending was appropriate and
documented. But it found that Shumaker placed nearly $36,000 in personal charges
on the UofL Foundation credit card, and failed to repay $2,000.
Hatchett's letter yesterday said his office confirmed that UofL auditors reviewed
all of Shumaker's credit card and reimbursed expenditures. But he said he disagreed
with their finding that the spending was appropriate, and called it "misleading"
because the review was limited to certain expenditures. "Their work is
not as thorough as the work that was undertaken either in Connecticut or Tennessee,
and my job is to make sure it is that thorough and to reassure the taxpayers
and reassure the UofL community," Hatchett said in the interview.
His letter said the UofL auditors' reports and working papers "revealed
weak university controls in several respects"—some of which had already
been noted by UofL auditors. They included a lack of an approval procedure for
Shumaker's travel and entertainment spending, a lack of written policies for
Shumaker's use of the foundation credit card, and reimbursement of travel and
meals at cost.
The letter also said that the $36,000 in personal expenses Shumaker put on
the foundation credit card was 10 percent of all charges examined by UofL. More
than $62,000 of Shumaker's reimbursements weren't supported by original receipts—34
percent of the total reimbursements by the foundation, the letter said.
Hatchett noted in the letter that Shumaker gave UofL trustees quarterly expense
reports, but they were informational only. He recommended that UofL trustees
approve or disapprove the expenditures on those reports.
RAMSEY, WHO has given up his foundation credit card, said he would forward
the recommendation to UofL trustees.
But Junior Bridgeman, the UofL trustees chairman, said he doesn't know whether
the trustees will go that far. "You have to trust the person who is president,"
Bridgeman said after a news conference. "If you don't trust him, you've
got the wrong president."
Hatchett's recommendations also include:
- That the quarterly reports of presidential expenditures include a statement
that original receipts are on file for all items in the reports.
- That quarterly reports including spending on Amelia Place.
- That UofL enforce its policy of requiring original receipts prior to reimbursements.
- That UofL develop travel and reimbursement policies for the president, and
address use of frequent-flier miles.
Ramsey said most of the recommendations are being implemented. But he said
Amelia Place is owned by the UofL Foundation, and that Hatchett would have to
discuss those expenditures with the foundation.
Bridgeman yesterday praised Ramsey, saying he has "clearly established
an open and honest administration of which, I think, we all are proud."
Asked if Hatchett's analysis of the internal audit was unfair, Bridgeman said
the letter "makes it seems as if you're hiding something." He said,
"When you look at 100 percent of the items related to Dr. Shumaker and
they don't turn up anything, ... I don't know why you continue to go looking."
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