Program Review and Investigations Committee


Minutes of the<MeetNo1> 4th Meeting

of the 2002 Interim


<MeetMDY1> September 12, 2002


The<MeetNo2> 4th meeting of the Program Review and Investigations Committee was held on<Day> Thursday,<MeetMDY2> September 12, 2002, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Gippy Graham, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Gippy Graham, Chair; Senator Katie Stine, Co-Chair; Senators Charlie Borders, Brett Guthrie, Ernie Harris, Paul Herron Jr, Vernie McGaha, Dan Seum, and Johnny Ray Turner; Representatives Adrian Arnold, Sheldon Baugh, Dwight Butler, Jack Coleman, Charlie Hoffman, Ruth Ann Palumbo, and Dottie Sims.


Guests:  Sue Hodges-Moore, Interim President, Council on Postsecondary Education; Sherron Jackson, Acting Vice President, Finance, Council on Postsecondary Education; Bill Swinford, Senior Associate, Public Affairs, Council on Postsecondary Education; William Wilson, Chairman, Kentucky State University Board of Regents; Paul E. Bibbins Jr., Ph.D., Interim President, Kentucky State University; William D. Pennell, Chief Financial Officer, Kentucky State University; Hinfred McDuffie, University Advancement, Kentucky State University; Dr. Terry Magel, Academic Affairs, Kentucky State University; Mary Ellen Wiederwohl, Director, Division of Legislative & Public Relations, Education Professional Standards Board; Marilyn Troupe, Director, Division of Educator Preparation and Internship, Education Professional Standards Board.


LRC Staff:  Greg Hager, Ph.D., Acting Committee Staff Administrator, Lowell Atchley, Judy Fritz, Tom Hewlett, Alice Hobson, Joseph Hood, Margaret Hurst, CPA, Dan Jacovitch, Erin McNees, Stacie Otto, Cindy Upton, CPA, and Susan Spoonamore, Committee Assistant.


Minutes of the August 13, 2002 were approved by voice vote upon motion made by Rep. Baugh and seconded by Sen. Stine.


Chairman Graham stated that staff had been requested to monitor and work with the appropriate agencies in solving the problems at Kentucky State University, and that staff would be presenting a background review.  He also stated that a full report would be coming at a later time.   


Tom Hewlett of the Program Review staff presented a background overview of Kentucky State University. Mr. Hewlett discussed Kentucky State University’s early history, stating that the Normal School for Colored People was established in 1886, and that the name was changed to Kentucky State University in 1973 at which time it gained university status. He said that in 1981, the U.S. Office of Civil Rights (OCR) found that vestiges of segregation remained in Kentucky higher education, and in May of 1999, the Commonwealth entered into an agreement with OCR to resolve the remaining issues.  Per the agreement, the Council on Postsecondary Education and KSU were to have developed a plan to renovate Carver, Hathaway and Young Halls by December 31, 1999, at an estimated cost of $12.5 million dollars, and KSU was to implement communication and diversity training programs. The agreement also contained language that Kentucky State University, the University of Kentucky, the University of Louisville, and the Council on Postsecondary Education were to work collaboratively to strengthen KSU’s education program and that the Governor was to ensure that Kentucky State University’s Board of Regents was of the highest caliber. Mr. Hewlett explained that the agreement would expire on December 31, 2002, at which time the parties would determine if all the commitments had been implemented. He said that in 1997 KSU’s mission emphasized:  (a) special needs of government employees and state government in general, (b) degrees oriented toward career opportunities, (c) Master’s degree program in public administration and, (d) the historic role in education of African Americans, with the expansion of pertinent library material encouraged.  He pointed out that KSU currently emphasizes:  1) its status as a liberal studies institution, 2) the lowest student-faculty ratio among state universities in Kentucky, 3) the most culturally diverse student body and faculty of all state universities, 4) the aquaculture program as an area of distinction, and 5) its land grant role in association with the U.S. Department of Agriculture. Mr. Hewlett stated that the enrollment figures for KSU over the past 20 years showed that KSU was mainly an undergraduate institution, and in looking at the 2001 figure, it showed that approximately 47% were first time in-state freshmen. For the fall semester, figures showed that Kentucky State had the lowest in-state population among regional schools. He also stated that according to the 2001 data obtained for KSU, 41% of students were local first-time freshmen from Franklin and surrounding counties. Mr. Hewlett stated that KSU conferred 207 Baccalaureate degrees in 2001,  62 Associate degrees, and 29 Master degrees. He also stated that for 2001, KSU’s expenditures exceeded its revenue for a shortfall of approximately $1.7 million dollars. For the year 2000, the shortfall was approximately $1.3 million dollars.  Mr. Hewlett stated that the current areas of concerns for staff were the ongoing investigations by the United States Department of Education and the Federal Bureau of Investigations, and the expiration of the Federal Office of Civil Rights Enhancement Program at the end of this year. He said that another area of concern was the low pass rate for the Teacher Preparation Programs. 


Rep. Coleman stated that most of his questions would center around the financial expenditures of KSU, especially the audits that had been conducted in the past by PriceWaterhouseCoopers, Crowe Chizek, and the Auditor’s Office citing the same problems over and over again. He wanted to know if KSU had used the Operations Financial Manual that had been prepared for them by the Auditor’s Office, and if so, how had it been used.  In his opinion, KSU had not complied with the audits, nor accepted the help that had been offered by the Council on Postsecondary Education, the University of Kentucky, and  the University of Louisville.


Rep. Baugh asked why the Teacher Preparation Program was failing when there was an enhancement agreement with UK, U of L and CPE to work collaboratively to strengthen KSU’s education program, along with the fact that KSU has the lowest student-faculty ratio of any school.   Mr. Hewlett stated that at this point he did not think he could comment on the question.


Rep. Baugh asked if other schools who collaborated with each other had a problem with low passing rates.  Mr. Hewlett stated that they had not. 


Rep. Palumbo asked if the pass rate was 33% or 36%.  Mr. Hewlett stated that he thought it was 36%, but would check to see.


Sue Hodges-Moore, Interim President for the Council on Postsecondary Education (CPE), stated that the Council’s statutory responsibilities were to review, revise and approve the mission statements of the universities, and it had final authority to determine the compliance of institutions with the academic services and research missions.

She said it was the understanding of CPE that the Kentucky State University Board of Regents had approved a preliminary revised mission statement in February 1999, but there was no record of a final mission statement being adopted, nor was there any record where the Council had seen that mission statement or had been asked to approve it. She said that  CPE maintained the position that there had not been any substantive changes to KSU’s mission over the last 10 years.


Ms. Moore stated that the Council had the authority to approve academic programs in the public institutions, and at its discretion, the Council could eliminate programs and revise programs. She stated that the Educational Professional Standards Board (EPSB) had the authority and responsibility to set standards, approve, and evaluate college university and school district programs for the preparation of teachers and other school personnel. The Council works with EPSB on teacher education programs in Kentucky, and the Council serves as an ex officio voting member of the 17-member standards board.  She also said that the Council had conducted a productivity  review in 2000,  and it identified teacher education programs as an area in need of attention. Ms. Moore stated that for the past 24 months, the Council and staff had been involved in issues regarding KSU’s teacher education program. She said that the Council had identified sources, arranged meetings, hosted seminars to strengthen KSU’s teacher preparation program, had monitored the PRAXIS scores through the Council’s Committee on Equal Opportunity by requesting regular presentations and written reports from KSU representatives on their efforts to address the deficiencies in the programs, and had expressed concern in public meetings and in writing to KSU’s President and Board Chairman about PRAXIS scores.


She said that the role of the Council in evaluating and responding to findings and reviews and investigations and other inquiries was to: establish a public agenda for the system; establish accountability so CPE could measure the progress towards reformed goals and the goals set by the Council, which is measured at the system level and at the individual institution level to develop annual budget recommendations; approve institutional missions; and approve academic programs. She said that the Council did not approve operating budgets or allocate internally human financial or fiscal resources to the institutions, hire or fire faculty staff or administration, or handle student matters. She said the Council did not operate the institution.


She also said that the oversight of the various reviews and investigations at KSU rests with the Board of Regents, which is responsible for the stewardship of the University. She stated that the Council did require the universities and the Kentucky Community Technical College System to submit audited financial statements for  review by the Council for compliance with the financial reporting guidelines. The Council also receives financial reports on the trust funds that are administered and the Council makes sure they are in compliance with the Council’s guidelines. The Council is not responsible for the day-to- day financial management of the institution. Council staff do inquire, informally, when they become aware of these types of investigations. The Council has been in regular contact with the staff, administration, and board members regarding the recent reviews and investigations at KSU.


She said that the Council had contacted national experts to help KSU with effective governance in academic program areas and in personnel evaluation. In August 2000, when the Governor appointed four new board members at KSU, Council staff sponsored a special orientation and training session for the entire Board. The training was conducted by the Association of Governing Boards (AGB), which included topics such as regents’ roles and responsibilities, statutory duties of boards, university budgeting and financial management, and postsecondary education reform. In addition to the AGB staff, the Council also asked State Budget Director Jim Ramsey, State Auditor Ed Hatchett, and the Council’s legal counsel to make presentations.


She stated that the Council and the Committee on Equal Opportunities also recommended that a comprehensive assessment take place of KSU’s programs and the use and adequacy of resources.  The assessment was to be a partnership between the CPE and the KSU Board.  KSU approved the requested proposal and a RFP was submitted.  The RFP sought to secure the services of professionals to complete the assessment.


She stated that the Governor had created the Institute for Effective Governance, which was jointly managed by the Council and the Prichard Committee for Academic Excellence. The institute would provide education and training programs for governing boards of Kentucky’s universities and the Kentucky Community and Technical College System.  She said that a conference would be held in September to focus on board members’ understanding of institution finance and budget issues as well as broader issues of board relationships to the council, to its president and other constituencies.


In closing, Ms. Moore stated that the Council had confidence that the KSU board would do whatever was necessary to help KSU reach its fullest potential. She said that the Council was committed to helping in any way that it could during this critical period. 


Sen. Borders stated that the 36% pass rate should improve or else close Kentucky State University. He also stated that he did not hold Kentucky State University any more accountable than he did any other school, but receiving an inferior education was not fair to the students attending KSU. He said that if the universities could not do the job or refused to make the necessary adjustments for significant improvement, then the Council needed to recommend closure. The audit problems of the past were totally unacceptable, and KSU should never have been allowed to get in that position.   


Rep. Hoffman stated that he felt that Kentucky State University was a very integral part of the Kentucky college system. He asked how many times leadership had changed at Kentucky State University.


Sherron Jackson, Acting Vice President, Finance, Council on Postsecondary Education, stated that there had been four leadership changes. 


Rep. Hoffman asked if the problems being experienced by KSU were unique to Kentucky State University or were they the result of a changing society, and if so, should the University’s mission statement be changed to reflect the changes. 


Mr. Jackson  stated that KSU was unique in that it was a historically black institution. He stated that the issues facing KSU stemmed from being able to bring into the fold the individuals with the knowledge and experience that allowed institutions to move into the larger arena of postsecondary education. Many of the Historically Black Colleges and Universities (HBCU) have made the transition. He said that the University was making great strides moving into the mainstream of postsecondary education and dealing with issues that all HBCUs have to deal with. He also said that Kentucky State University was unique in that it had to compete for experienced individuals, particularly African-Americans, with the kind of experience that was needed to work through the environment. KSU had to compete with the University of Kentucky and the University of Louisville and other traditionally white institutions who were trying to hire those same people. He stated that what had been seen at Kentucky State University was not the prevalent things you see at other prominent HBCUs, particularly in the public arena, however, the implications seen at KSU had been experienced by other HBCUs. The Board that the Governor had appointed for KSU were working through those issues very well. He said that there had been some improvements at KSU, and compared to other HBCUs, KSU was doing quite well. 


Ms. Moore stated that the comprehensive assessment would include academic programs, the quality of the programs, and whether the program mix at KSU was appropriate for meeting the needs of the Commonwealth. 


Rep. Hoffman stated that the Committee wanted to find out what the problems were in order to get KSU back on the right track. 


Rep. Coleman asked what CPE had been doing with the information gathered from the qualified audits and deficit spending reports. 


Mr. Jackson stated that CPE reviewed financial audits that were received from all institutions. As related to KSU, he said that when CPE became aware of the issues related to financial problems, CPE very quietly worked with the presidents of the other institutions to identify individuals at those institutions that CPE could recommend to KSU to speak with in order to deal with some of the internal workings.  CPE did not want to intrude and place staff on the campus in terms of the day-to-day operation, but rather identify resources for the institution that they could rely on in order to deal with the things that they have to deal with on a day-to-day basis. 


Rep. Coleman asked how many qualified audits had CPE received from other universities. Mr. Jackson stated that KSU was the only university that had received qualified audits. 


Rep. Coleman asked how many qualified audits had CPE received for KSU. Mr. Jackson stated just the ones that had been mentioned earlier. 


Rep. Coleman asked if KSU had ever contacted any of the individuals recommended by CPE for help in dealing with their internal problems. Mr. Jackson stated that none of the individuals recommended had been contacted by KSU. 


Rep. Coleman asked for CPE’s view on the land grant issue.


Mr. Jackson stated that in 1984, Kentucky built into its formula funding process recurring funds for the land grant program at Kentucky State University. He said that CPE was asked to do an analysis of the growth of those funds up through the 2000-02 biennium, and it was determined that there was a gap of approximately one-half million dollars between the required match by USDA and what was in the base of KSU. CPE recommended to the Governor and to the General Assembly that those funds be appropriated in the budget. The 2002-03 Executive Spending plan included $487,000 dollars to meet what was required in terms of the match for the land grant program at KSU for this fiscal year. CPE believed that the required match with the additional funding would be there for the University to meet its match. 


Rep. Coleman asked if the University was in the position of losing the land grant program. Mr. Jackson stated that to the knowledge of CPE, the University was not in threat of losing the land grant program, however, if the appropriate match was not made then the University would lose land grant funds in proportion to the amount that was not matched. 


Rep. Coleman stated that CPE may need to be given more authority and oversight to take serious action with universities whose audits showed a continuing problem.


Chairman Graham introduced William Wilson, Chairman of the Kentucky State University Board of Regents, Paul E. Bibbins Jr., Ph.D., Interim President of Kentucky State University and William D. Pennell, Chief Finance Officer, Kentucky State University. 


Mr. Wilson stated the Board of Regents was in the process of appointing a new university president, and that the Board had appointed Dr. Paul Bibbins as Interim President. He stated that KSU was clearly the most diverse university in the Commonwealth, and it was Kentucky’s only small liberal arts university, which enjoyed the smallest faculty student ratio. He stated that the Board of Regents was made up of citizens who volunteered their time and energy to higher education. He also stated that five of the sitting  Regents had either attended or graduated from KSU; three had been or were Secretaries of the Governor’s Cabinet; two had successful businesses; two were attorneys, and he served as Senior Executive of Kentucky Educational Television. He stated that over the past few years the Board had to make some hard and difficult decisions, and that as a result of those decisions, the Board had been able to bring accountability to its financial administrative management. He said that in the last eighteen months, KSU had been through three audits resulting in a new Chief Financial Officer, new University Controller, a new Internal Auditor, new Budget Director, a Vice President of Advancement (fundraising for KSU), and a new Director of Human Resources. He also said that the Board was committed to making changes, no matter how difficult.


Dr. Bibbens stated that he had served as Professor of Biology, Chairperson of the Division of Mathematics and Sciences, and Dean of the College of Arts and Sciences at Kentucky State University prior to assuming the role of Interim President. He stated that he was committed in pursuing excellence at Kentucky State University. 


Rep. Coleman asked how many scholarships were given in-state, and could scholarships be awarded to out-of-state or international students. Dr. Bibbens stated that KSU tried to accommodate as many students as possible, in-state, out-of-state, and internationally. 


Rep. Coleman asked if other regents had been invited to the meeting. Mr. Wilson stated that they had not been personally invited, but some of the regents were in the audience. 


Rep. Coleman stated that in the past there had been approximately $300,000 in band scholarships, and this year it went up to approximately $600,000. He asked where the money was coming from in order to cover the scholarships. Dr. Bibbins stated that $300,000 was in the budget, but $600,000 had been promised. He stated that KSU had been looking at capturing other monies from the university to apply to these students. 


Rep. Coleman asked if other scholarship money from other departments had been used to cover the band scholarships. Dr. Bibbins stated that was correct, monies had been reallocated.


Rep. Coleman asked for someone to explain Title III funding.


Hinfred McDuffie, University Advancement, Kentucky State University, stated that 70% of the Title III programs were academic programs. He stated that KSU had programs ranging from academic, math sciences department, arts and sciences department, library, teacher education, nursing programs, and so on. He also stated that for the current year, $1.9 million dollars had been funded for Title III activities. 


Rep. Coleman asked if the funding was broken down by department, and then adopted by the Board of Regents. 


Mr. McDuffie explained that the process was similar to an application process.  He said that the entire university had an opportunity to submit proposed activities, which were then reviewed by the division heads for determination of which ones would continue through the process.  He said that after the proposals were developed, they were reviewed again by the division heads/vice presidents, and those that were selected were then developed for application submission. From that point, it proceeded into the budgeting process of KSU’s federal grant programs and was approved as a part of the budget for the university by the Board of Regents. 


Rep. Coleman stated that KSU, as a land grant university, had among the highest funding per student. He said he was concerned that a high percentage of funds were going towards salaries and operating expenses as opposed to hands-on student equipment and supplies. He asked if the funds were categorized, and adopted by the Board of Regents. Mr. McDuffie stated that the budget for Title III funds was part of the budget document that was forwarded to the Board.


Sen. Seum stated that it was obvious that KSU had the highest funding, but the worst outcome. He said he was concerned about the kids at KSU, and he also stated that he thought KSU should be turned over to the University of Kentucky as a department or a school of agriculture, and then the students would become University of Kentucky students. He said that may have been a cold and hard statement, but he was concerned about the students expecting the best and ending up with the worst. He asked how long Dr. Bibbins had been at Kentucky State University. Dr. Bibbins responded that he had been at Kentucky State since 1988, which would be 14 years.


Sen. Seum asked what the longevity of the Board of Regents was.  He also asked if the Board had changed recently or was it looking for new people.  Mr. Wilson stated that he was one of the four that had been recently appointed by the Governor. He said that since that time, there had been two new appointments, and every year there was a new student representative.


Rep. Palumbo stated that she thought there was a very real need for Kentucky State University.  She asked if it was accurate to say that the students who took the test for a second time were more likely to pass it.  Dr. Bibbins stated that was true. 


Dr. Terry Magel,  Interim Vice President for Academic Affairs of Kentucky State University, explained that the pass rates could be confusing. He stated that the 58% pass rate for the year 2000, and the 36% pass rate for the subsequent year represented pass rates for students who had taken the test at a specific time and that they were within a student cohort group. He explained that there was no limitation to the number of times that a student could take the test, and each time that a student repeated the test, it would be attributed back to that particular cohort group. He said that the cohort groups were continually improving as the students were retaking the test. He stated that KSU had addressed the issue by conducting annual workshops for students who had taken the test and failed. He also stated that KSU had made another policy change that before a student could do student teaching, they had to pass the PRAXIS II exam. He stated that those changes would dramatically increase the 2003 pass rate for the cohort group.


Rep. Palumbo asked for clarification on the number of changes in leadership at Kentucky State University within the last 10 years. She asked if it was three or four changes in leadership. Mr. Jackson stated that the answer should have been only three changes within the last ten years. 


Rep.  Palumbo asked if the mission statement had been adopted, and was it on record with CPE.  Ms. Moore stated that the Council had approved a mission statement in 1994, which had been in response to the HERC Commission, and that was the mission statement that still stood.   She said it was her understanding that a new mission statement had been discussed internally at Kentucky State, but it had not been formally presented to the Council. 


Rep.  Palumbo asked for someone to address the issue regarding the new mission statement. Mr. Wilson stated that the Board would be taking the new mission statement under consideration at their upcoming retreat.


Rep. Coleman  stated that the enhancement agreement said that KSU, UK, U of L, and CPE were to work collaboratively to strengthen KSU’s education program.  He asked what collaboration had been used. Mr. Magel stated that he was not aware of any collaboration, and that was definitely a mistake on the part of the University. 


Mary Ellen Wiederwohl from the Council of the Education Professional Standards Board  (EPSB) made comments pertaining to the teachers program at Kentucky State University.  She explained that EPSB was the state agency charged with creating teacher preparation programs and issuing the certificates. She said that the Standards Board had the authority to approve preparation programs and to discontinue approval of programs when they were not performing. She said that KSU had previously been on probation with the Board, and the Board was now again in discussion with KSU.  She also said that in response to the April 2002 report that had been mentioned earlier, the Standards Board had ordered an emergency review of two programs on Kentucky State’s campus: the elementary education program, which had a 33% pass rate and was the largest program in their department of education; and the physical education program, which had a 25% pass rate.  She stated that the emergency review had been conducted in June by a team from the  Board of Examiners, who  were trained individuals who conducted the accreditation process, as well as staff,  and a report had been presented to the Board of Examiners at its June meeting indicating the response from the Board of Regents at KSU. She also stated the KSU had been given an opportunity to present a response.  She said that the response, and staff’s and the Board of Examiners’ recommendations would be going to the Educational Professional Standards Board at its September 23rd meeting. She stated that the recommendation would be to discontinue the two programs next year if they did not score at 50% or above. She also stated that the Standards Board wanted the institution  to succeed, and they had invested quite a bit of time and energy on behalf of the Commonwealth to see that happen. 


Marilyn Troupe, the Director of Educator Preparation for the Standards Board stated that KSU had been put on probation in 1997 because students were not being well prepared and there was not enough faculty at the time.  She stated that the faculty had not been properly involved in research or professional development, nor had the students been meeting the required standards. She said KSU had experienced problems with the Chair of the Education Department, which became a major issue after KSU was put on probation.  She stated that KSU went through several people before Dr. Paul Woods was hired. She said that Dr. Woods hired new faculty for the Department, and when EPSB came back in, the department  was in better shape. She said that a major concern had been the lack of computer labs, software, and hardware in the teacher preparation programs. She said it was essential that the students had a working knowledge of technology because public schools were requiring that educators have that knowledge. She stated that EPSB still had concerns, and that KSU had been  requested to report to EPSB over the next two years regarding their resources for the teacher preparation program. When the Title II report came out in April and the Board passed the policy for an emergency review, then the Standards Board did take a team onto the KSU campus. She said that they were able to interview a large number of students who happened to be training for PRAXIS, and it was after those interviews that they knew something had to be done.  She stated that it was imperative that the students be prepared to deal with the KERA initiatives that P12 schools deal with, and the accountabilities that teachers are  being held to.


Ms. Wiederwohl added that over the years of working with KSU, the same issues regarding leadership had arisen over and over again: who was in charge?  Who was behind the wheel and was the person behind the wheel even awake?  She stated that because KSU had an interim president and an interim dean on campus, the Board was concerned on how accountable they would be to the decisions that the Board would make in September or when the next report came out in the spring. She also stated that the reports received from KSU had been incoherent and inconsistent —KSU needed stability.


She said that another area of concern was the admission of students in the teacher education program who had not met the admission requirements. Those individuals were allowed to take the entire course pattern all the way up to student teaching, and in some cases KSU even let them student teach.  She stated that by KSU’s own choice, their admission requirement at the time had been a 21 of the ACT.  She said that some students had scored in the teens, 16 and 17, and even with taking test preparations, it was virtually impossible to improve more than two to three points on the ACT.


She stated that it was possible for students to retake the PRAXIS and their scores for certification improve.  She said that in 1998, Title II of the Higher Education Act included a provision that three years after the initial report, the Standards Board was to go back and take a look at the cohort to see where they were. She stated that it was unfair for students to be failing at the time of graduation, and still not be prepared to take a job as a teacher. As to the intended 100% pass rate that was mentioned earlier by KSU officials, she said that if it became KSU policy that a person could not student teach without having passed the PRAXIS scores, then yes there would be a 100% pass rate. She said that could cause CPE to become interested in Kentucky State for productivity issues because it would cut down on the number of people who were graduating from the program. She stated that the PRAXIS test was really not that much different than other standardized tests. She said it was very similar to the test taking pattern encountered on the ACT or the SAT.


She also said that on September 23rd, the Standards Board would be making a preliminary decision about what to do with Kentucky State, and would be setting in place an action plan for them to adhere to. She stated that the Standards Board would also be rolling out the fall teacher report card, called the Kentucky Educator Preparation Report Card. She stated Kentucky State University scored the lowest of all the Kentucky institutions in a survey of student teachers, new teachers and their supervising teachers; people who work with them through the student teaching experience, as well as resource teachers during their internship year and principals; and people who had an opportunity to witness the new teachers either in their final training phase or in their first year on the job, and Kentucky State University scored the lowest of all of our Kentucky institutions. That survey included both the students saying that they didn’t feel like they were well prepared to address the issues of the classroom, and their supervisors saying they were not well prepared to address the issues they confronted in the classroom. 


Sen. McGaha stated that until the problems of the pass ratio on PRAXIS were identified, as well as the financial problems, then it would be hard to address the issues. He stated that he didn’t envy Mr. Wilson or the other Regents, but that they were charged with a very critical job at this juncture. He stated that everyone wanted to see KSU succeed, but it would involve accurate record keeping and students being adequately prepared for jobs. He said that a 33% pass rate on the PRAXIS was a shame.  He said that if the teachers were responsible for the problem, then they needed to be fired, or if it was administrators, then they needed to be fired, or if it was students then that level needed to be raised. He asked KSU to not tire, to not falter and to not fail in their quest to get things resolved.


Mr. Wilson said that they would accept that challenge. He agreed that the problems must be identified, the problems addressed, and then move the University forward. He said they were committed to doing something about the problems and were going to do it in an organized fashion. 


Sen. McGaha asked who was responsible for the budget and financial issues.   Mr. Wilson stated that the Board would be looking for a president that would help in that endeavor.  He said that the policy making board monitored those activities. He also said that objectives needed to be set and the necessary resources identified, and that the Board would be monitoring the activities along with the finances to make sure that the proper resources were allocated toward the things that were needed in order to make sure that KSU wasn’t sitting here again next year or next month.


Sen. McGaha asked if Mr. Wilson along with the other regents were accepting responsibility to stop the spin cycle.  Mr. Wilson stated that they were.


Dr. Bibbins stated that even though he and Dr. Magel were in interim positions, they were willing to do whatever needed to be done on order to move the university forward with education.  He stated that they would not be sitting still.


Sen. Borders stated that if  Morehead University or UK or U of L ever had these same kind of problems, they would be held to the same standards as that of Kentucky State University. He stated that he would like to be a little careful on the admission scores, personally he would take a chance on someone with a 16 or 17 on a ACT test. He said that once students are admitted then it should be determined if they were going to make it.  He said they should not spend four years in a program and then not be able to pass.  He also said that if things were not working right, then the Committee would be the first to tell KSU to close the doors, but if it was working then the Committee would also stand with KSU. 


Mr. Wilson stated that they were not interested in any type of excuse, nor were they talking about history,  just present performance.


Ms. Wiederwohl stated that the Standards Board had come to the same conclusion  regarding the entrance scores. She said the Board had become more concerned with outputs rather than inputs and that was why they were now looking at PRAXIS scores.  She stated that the Board had repealed the state-mandated admission requirements and had given to the institutions a mandate requiring them to evaluate academic proficiency, as well as dispositions for the profession and admission. She said that KSU was still not adhering to the mandate and they still had not put into place a continuous assessment device that would accurately measure where a student was, or the student’s capacity to do university level course work, or their capacity to ultimately finish the program and perform as a quality teacher in the school system.


Sen. Guthrie stated that he thought the most important thing in the state was education, and the most important public policy issue was the growing achievement gap in education. He said it could be seen in gender, in race and economic status. He stated that he thought it was vitally important that KSU have a top-notch education program to address those issues.


Rep. Coleman stated that there had been many state agencies, institutions, educators, people, and legislators begging to help Kentucky State, and they were all turned away repeatedly. He said that in order for KSU to succeed, there would have to be an openness with the Board of Regents, with the faculty, and with the foundation, but most importantly, there would have to be accountability. He stated that Kentucky State University should be the flagship of the country, not just the state. He also stated that he hoped today would be a new day for Kentucky State University.


Mr. Pennell stated that he wanted to summarize what had been done in regard to financial accountability. He said that the problems had been identified and that the University had called upon PriceWaterhouse Coopers to give them a comprehensive assessment of the problems. He said that as a result of the information obtained from the assessment, KSU had entered into a Memorandum of Understanding with the State Auditor to help institute internal controls, policies and procedures. It was during that process in February 2000 that the embezzlement came to light and within 15 days it had been solved. He said the perpetrators had been arrested and convicted and KSU had recovered all but the $10,000 insurance deductible. He said he was brought in at the August 2000 board meeting and presented to the Board a financial action plan on how to address the problems. He said that it took a reallocation of about a million and two hundred thousand dollars to upgrade the student information system, human resources system, and the financial reporting systems. He also stated that KSU now had people with qualifications to take care of the finances. He said that with those three pieces and with the management in place now, KSU was now accountable and would take care of the resources.


Chairman Graham stated that he wanted the representatives from Kentucky State Community to know that the session today had been intended to be helpful. He said that the university was an integral part of the community and he did care about the university.  He said he was encouraged that from this time forward KSU could move on.  He said that the Committee was here to be supportive and helpful and of course expected good accountability and good results.


Perry Nutt, LRC Staff Economist, presented a short summary on the Kentucky Enterprise Zone Program study proposal (a copy of which may be found in the LRC Library file). He stated that the overall goal of the study would be to determine how effective the program had been.  He said that staff would focus on identifying the changes that had taken place in each zone, and identify what costs had been incurred.  He also said that staff would concentrate on four objectives: (1) Describe the types and utilization of state and local tax incentives that have been taken in each of Kentucky’s ten enterprise zones,  (2) Determine the economic changes that had taken place in each of the ten enterprise zones,  (3) Identify the amount and type of monitoring activities that were taking place, and ascertain whether additional efforts could be made; and (4) Identify other approaches to economic development and examine the experience of other states to identify what modifications had been made to enterprise zone programs to improve their performance. 


Rep. Palumbo stated that she would like to include in the study proposal the following questions: (1) Describe the  types and utilization of state and local tax incentives by zone as well as collectively.  (2) Provide a breakdown of new business that have joined the zones since the establishment of the zones versus existing businesses, and break that down into new jobs provided.  (3) Also, estimate what the state fiscal impact would be if the enterprise zones were reauthorized or not reauthorized.  (4)  Be very specific in what actions surrounding states have taken – have they expanded or are they not expanding?  (5) Examine other problem areas that may exist with giving tax breaks.  She stated that one such example would be a supply store giving tax breaks to a contractor who was building a home within the Enterprise Zone,  and because the contractor was a good customer, the supply store continued to give the contractor a tax break on another home that was being constructed outsize the zone.


Sen. Stine stated that two of the points that Rep. Palumbo made were the same points that she wanted to make. She asked staff to look specifically at the states bordering Kentucky since they were the states that Kentucky competed with for development. She also asked what would be the fiscal impact if they were not reauthorized. 


Mr. Nutt stated that he would include those issues in the study proposal.


The Enterprise Zone study proposal, along with the additional requests, was approved by voice vote upon motion made by Sen. Borders and seconded by Rep. Palumbo.


Mike Clark, Ph.D., LRC Staff Economist, summarized the study proposal for Medical Malpractice Insurance Premium Costs in Kentucky ( a copy of  the study proposal can be found in the LRC Library file).  Dr. Clark  stated that the purpose of the study was to examine medical malpractice premium rates for providers in Kentucky; to determine whether such rates influenced the costs of providing health care to state employees and Medicaid recipients specifically, and Kentucky residents in general; and whether access to providers was affected. It would also cover the experiences of other states with tort reform and various legislative changes adopted as a means of limiting premium rate increases. 


Sen. Stine asked if staff would be examining the experiences in Kentucky to determine whether or not it justified an increase in premiums. Dr. Clark stated that it would be a part of the analysis.


Rep. Baugh asked if the hearing conducted by the Department of Insurance a couple of months ago contained any helpful information, and if any hearings were held on practices that might cater just to Medicaid patients primarily. Dr. Clark stated that some of the information was helpful in identifying some of the issues, but he did not think there were any hearings related to Medicaid patients only. 


Rep. Baugh asked why staff would specifically be researching state employees and Medicaid recipients. Dr. Clark stated one particular concern would be the effect that Medicaid recipients were having if access was being restricted. Staff was also interested in knowing if hospitals were finding it difficult to get  providers, as was the case at the Charleston Medical Center. He said that the Medical Center indicated that medical malpractice premium increases were making it difficult to find certain specialists, and therefore their patients were having to travel further to receive treatment. He said that could be happening in Kentucky particularly, in the rural areas, and the Medicaid population may be affected. 


Rep. Baugh stated that anecdotally some providers enjoyed having a practice that consisted primarily of Medicaid patients because they got a guaranteed payment from the state. When the economy starts to suffer, then people lose their health insurance, sometimes people are unemployed, and they may or may not pay their providers, whereas Medicaid is pretty much a guaranteed market. It would seem that would not affect the study. Dr. Clark stated that could be true, but at this point he did not know and would not know until the research was completed.


The Medical Malpractice Insurance Premium Costs study proposal was approved by voice vote upon motion of Sen. Harris and seconded by Rep. Arnold. 


Chairman Graham stated that two committee members had approached him about moving up the Campaign Finance study to November. He explained that the SEEK report scheduled to be presented in November would be a complex issue and would require several hours.


Sen. Stine stated that she would like to hear the SEEK report as well as the Campaign Finance report at the November meeting.


Chairman Graham asked if members would be willing to have a morning session devoted to the SEEK report and then come back in the afternoon to hear the Campaign Finance report. 


The presentations of the SEEK report and the Campaign Finance report at the November 14th meeting were approved upon motion made by Rep. Palumbo and seconded by Sen. Stine.


Sen. Herron asked what studies would be presented at the December meeting. 


Chairman Graham stated that the Enterprise Zones report would be presented at the December meeting. 


Rep. Sims asked that the Committee keep in mind that a couple of the members would be attending an education summit in November. 


Meeting was adjourned at 1:00 p.m.