xt780g3gxs1d https://nyx.uky.edu/dips/xt780g3gxs1d/data/mets.xml Lexington, Kentucky University of Kentucky 20050920 minutes English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 2005-09-sep20. text Minutes of the University of Kentucky Board of Trustees, 2005-09-sep20. 2005 2011 true xt780g3gxs1d section xt780g3gxs1d 

MINUTES
Meeting of the Board of Trustees University of Kentucky
1:00 P.M.
September 20,2005 18th Floor Patterson Office Tower
Minutes
Accompanying items:
President's Report and Action Items
PR 1             President's Report to the Trustees
PR 2             Personnel Actions
PR 3             Naming of Building (Robert Strauss Behavioral Research Building)
PR 4             Quantitative Waiver for Submission of Requests for New Academic
Programs
Academic Affairs Committee Report
AACR 1        Candidates for Degrees Finance Committee Report
FCR 1           Anonymous Gift for Cardiovascular Imaging Research
FCR2           The Albert G. and Lorraine N. Clay Charitable Lead Trust
FCR 3           UK Health Care Leadership Team Gifts and Pledges
FCR 4           Kentucky Hospital Research and Education Foundation Gift and Pledge
FCR 5           Kentucky Pharmacists Education Research Foundation Gift and Pledge
FCR 6           Janet H. Koller Estate Gift
FCR 7           Gifts and Pledges to the College of Nursing Millennium Fund
FCR 8           Ruth J. Suotham Estate Gift
FCR 9           Gifts to the Kevin Heidrich /Team 7 Endowment for ALS Patient Services
FCR 10         The Abercrombie Foundation Pledge
FCR 11         D. Ray Ball Pledge
FCR 12         Steve Canfield Pledge
FCR 13         Givens Real Property Partnership Limited Pledge
FCR 14         Lennie House Pledge
FCR 15         Ramsey Farm Pledge
FCR 16         Chris Sullivan Pledge
FCR 17         Jude Thompson Gift and Pledge
FCR 18         S.Craig Welch Pledge
FCR 19         Anonymous Pledge to the Capital Projects Gift Fund
FCR 20         Report of Leases


 
FCR21         Approval of Lease
FCR 22         Acceptance of Audit Report and the Report on Compliance and on Internal Control for the University of Kentucky for 2004-05
FCR 23         Adoption of University of Kentucky Debt Policy
FCR 24         A Resolution of the Board of Trustees of the University of Kentucky
Approving a Trust Agreement Dated as of November 1, 2005 between the University of Kentucky and the Trustee Named Therein, Providing for the Authorization, Issuance, and Sale from Time to Time of General Receipts Obligations of the University of Kentucky, Providing for the Payment of such Obligations, and the Securing of Such Payment, and Authorizing Other Matters Related Thereto
FCR 25         Resolution of the Board of Trustees of the University of Kentucky ("State Agency") Approving a Financing/Lease Agreement among the State Agency, the Kentucky Asset/Liability Commission, and the Finance and Administration Cabinet of the Commonwealth of Kentucky for the Purpose of Providing Financing for an Authorized Project
FCR 26         Consent to Modification of Listed External Trusts
FCR 27         Construct Biological/Pharmaceutical Complex, Phase I and Upgrade/Modify Coldstream Research Campus Facilities
FCR 28         IRIS Project Phase II
FCR 29         Disposition of Property
FCR 30         2005-06 Budget Revisions
FCR 31         Patent Assignment Report
FCR 32         Capital Construction Report


 
Minutes of the Meeting of the Board of Trustees of the University of Kentucky, Tuesday, September 20, 2005.
The Board of Trustees of the University of Kentucky met at 1:00 p.m. (Lexington time) on Tuesday, September 20, 2005, in the Board Room on the 181 Floor of Patterson Office Tower.
A.        Meeting Opened
Mr. James Hardymon, Chair, called the meeting to order at 1:05 p.m. and asked Ms. Barbara Jones, General Counsel, to administer the oath of office to three Trustees who have not had the oath before at a public hearing like this.
B.         Oath of Office
Barbara Jones, General Counsel, administered the Oath of Office to the following members:
Penelope Brown, appointed by Governor Ernie Fletcher to replace Elaine Wilson, for a term ending June 30, 2011.
Dermontti Dawson, appointed by Governor Ernie Fletcher to replace Alice Sparks, for a term ending June 30, 2011.
Rebecca Ellingsworth, who will serve as Student Trustee for the 2005-06 academic year. The new members received a round of applause.
C.         Roll Call
The following members of the Board of Trustees answered the call of the roll: Mira Ball, Stephen Branscum, Penny Brown, Dermontti Dawson, Jeff Dembo, Marianne Smith Edge, Rebecca A. Ellingsworth, Ann Haney, James Hardymon (Chair), Pamela May, Billy Joe Miles, Roy Moore, Phillip Patton, Steven Reed, Frank Shoop, Myra Leigh Tobin, JoEtta Wickliffe, Billy Wilcoxson, Russ Williams, and Barbara Young. The university administration was represented by President Lee T. Todd, Jr., Interim Provost Scott Smith, Executive Vice President for Finance and Administration Frank Butler, Executive Vice President for Health Affairs Michael Karpf, Executive Vice President for Research Wendy Baldwin, and General Counsel Barbara W. Jones.
Members of the various news media were also in attendance. A quorum being present, the Chair declared the meeting officially open for the conduct of business at 1:08 p.m.


 
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D.        Nominating Committee Report
Mr. Hardymon asked Ms. Tobin to take the chairs seat and receive the report from the Nominating Committee.
Ms. Tobin called on Mr. Frank Shoop, Chair of the Nominating Committee, to give his report.
Mr. Shoop reported that the Nominating Committee met that morning to consider the nomination of officers of the Board and the members of the Executive Committee. The Nominating Committee submitted the following nominations for officers:
Chair                        James Hardymon
Vice Chair                 JoEtta Wickliffe
Secretary                   Pamela May
Assistant Secretary     Barbara Jones
Mr. Shoop moved that the slate of officers be approved. Mr. Patton seconded the motion.
Ms. Tobin stated that there was a motion and a second. She asked if there were any nominations from the floor.
Mr. Patton moved that the nominations cease.
Ms. Tobin said that there were no nominations from the floor. She repeated the slate of nominations from the Nominating Committee and called for a vote. The motion carried unanimously. Ms. Tobin asked Mr. Hardymon to take over the chair's seat and Pam May to take the secretary's seat.
Mr. Hardymon thanked the Board for their support. He said it had been an interesting year, and he hoped the next year will be even more interesting. He has enjoyed working with the Board, and he is proud of the committees' work. He said he liked his association with the university staff and Ms. Wickliffe, particularly, for her support as vice chair. He welcomed Ms. May in her new role as secretary.
Mr. Shoop continued his report. On behalf of the Nominating Committee, he submitted the following nominations for members of the Executive Committee:
James Hardymon, Chair JoEtta Wickliffe Roy Moore Steve Reed Billy Wilcoxson Pam May, ex officio


 
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He moved approval of the slate of nominations for the Executive Committee.
Mr. Hardymon asked for a second to the motion or for any nominations from the floor. Mr. Branscum seconded Mr. Shoop's motion. Ms. Haney moved that the nominations cease. Mr. Hardymon repeated the slate of nominations for the Executive Committee and called for a vote. The motion carried unanimously.
E.        Consent Items
Mr. Hardymon noted the consent items on the agenda. He asked if there were any questions or comments about the consent items. Ms. Smith Edge moved approval. Her motion, seconded by Mr. Reed, carried without dissent. The consent items follow:
Minutes - June 14, 2005
Minutes of Retreat - August 21-22, 2005
Minutes of Special Called Meeting - September 7, 2005
Minutes of Special Called Meeting - September 8, 2005
PR 2       Personnel Actions
AACR 1 Candidates for Degrees
FCR 1    Anonymous Gift for Cardiovascular Imaging
FCR 2    The Albert G. and Lorraine N. Clay Charitable Lead Trust
FCR 3    UK Health Care Leadership Team Gifts and Pledges
FCR 4    Kentucky Hospital Research and Education Foundation Gift and Pledge
FCR 5    Kentucky Pharmacists Education Research Foundation Gift and Pledge
FCR 6   Janet H. Koller Estate Gift
FCR 7    Gifts and Pledges to the College of Nursing Millennium Fund
FCR 8    Ruth J. Suotham Estate Gift
FCR 9    Gifts to the Kevin Heidrich/Team 7 endowment for ALS Patient Services
FCR 10 The Abercrombie Foundation Pledge
FCR 11 D.Ray Ball Pledge
FCR 12 Steve Canfield Pledge
FCR 13 Givens Real Property Partnership Limited Pledge
FCR 14 Lennie House Pledge
FCR 15 Ramsey Farm Pledge
FCR 16 Chris Sullivan Pledge
FCR 17 Jude Thompson Gift and Pledge
FCR 18 S. Craig Welch Pledge
FCR 19 Anonymous Pledge to the Capital Projects Gift Fund
FCR 20 Report of Leases
Mr. Hardymon asked for a motion for approval of the consent items. Ms. Smith Edge moved approval. Mr. Branscum seconded the motion.
President Todd called attention to AACR 1 on the consent agenda and referred to line three and four of the recommendation. Based on Governing Regulations changes at the last


 
meeting, it should read, "upon certification by the registrar and approval by the elected faculty of the University Senate."
Mr. Hardymon asked for any further comments. He called for a vote on the consent items, including the amendment to AACR 1. The motion carried without consent. (See consent items at the end of the Minutes.)
F.         Schedule of Meetings for the Board of Trustees for 2006
Mr. Hardymon noted that the schedule of meetings for the Board of Trustees for 2006 were in the Board packet. He said that the dates were discussed at the retreat, and the Board gave general approval at that time. This is an information item and does not need action.
G.        President's Report to the Trustees (PR 1)
President Todd called attention to the following items in PR 1:
A record $274 million in grants and contracts have been received in fiscal year 2005-06. This is the third year the university has received over $200 million. This is really a testament to the faculty and staff. President Todd said that he is extremely proud of this accomplishment.
The College of Medicine departments rank among NIH's Top 20. This ranking includes the basic sciences as well as the clinical departments and is quite an achievement.
Nearly $5 million in grant funds for homeland security research campus wide. Congressman Hal Rogers brought to Kentucky a virtual homeland security laboratory. There were 11 grants given out last year. The University of Kentucky received approximately $5 million of those grants and is working jointly with other universities in the state.
The Chellgren Center for Undergraduate Excellence is a collaborative effort. With the assistance of Paul Chellgren and the state's Bucks for Brains program, the university was able to endow a position to keep its focus on undergraduate education. As UK tries to achieve the Top 20 research goal, it will still focus on the undergraduate population.
The television program 60 Minutes aired a 12-minute feature regarding UK's Parkinson's disease researchers and patients who participated in the clinical trial of the drug GDNF. This has received some good coverage. Leslie Stahl, CBS correspondent, was on campus to film the 12-minute feature.
President Todd said that PR 1 contains some great information about the faculty and staff achievements. He encouraged the Board to look at those achievements.


 
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H.        The Dream and the Challenge, Strategic Plan Progress Report
President Todd gave the annual update on the Strategic Plan. He called attention to the report on the university's success that had been given to the members of the Board. The report allows the administration to measure the goals and objectives that were planned approximately three years ago. The next round of strategic goals and objectives will be set in the spring 2006. He thanked Dr. Connie Ray and her staff for putting the data together.
President Todd reviewed the following goals in the report and elaborated on the slides:
Goal I             Reach for National Prominence
Goal II           Attract and Graduate Outstanding Students
Goal III          Attract, Develop, and Retain a Distinguished Faculty
Goal IV          Discover, Share, and Apply New Knowledge
Goal V           Nurture Diversity of Thought, Culture, Gender and Ethnicity
Goal VI          Elevate the Quality of Life for Kentuckians
He praised Dr. Karpf and his staff for increasing the clinical income. They have made significant increases by more than doubling the projected percent of increase, and this has been tremendous.
President Todd said that another goal was to increase the market value of the university's endowment to $500 million. The report shows that it has been increased to $538 million; however, an updated number as of this meeting indicated that it is $555 million. The administration and staff have really done a great job in achieving this goal. He praised Mike Richey, Associate Vice President for Development and Chief Development Officer, who has followed in Mr. Terry Mobley's footsteps in helping to achieve this goal. Under Mr. Mobley's guidance, Mr. Richey has really brought some enthusiasm to that area. President Todd said that he believes that at the end of last month the university was at $811 million toward its billion-dollar campaign. Mr. Richey had set a goal of $150 million by the end of this calendar year, and he feels that goal will be met.
President Todd said that it is difficult to increase the university's ACT scores when taking the freshman class enrollment from 3,000 to 4,000. He said that he is extremely proud of the fact that the university has maintained its ACT range. He anticipates that the scores will increase next year. He noted that 26 percent of the freshman class had ACT scores of 28 or above. That represents 77 more students in this year's freshman class with that standing than there were in last year's class. He pointed out that 30 percent of the freshman class had a high school GPA of 3.8 or above, and that represents 115 more freshman this year with that grade point average. He said that he is very proud of the quality of the freshman class. This is a testament to the recruiting efforts and a statement to the scholarships that have been awarded. President Todd noted that the disappointing number was that the university is down significantly in African-American freshman.


 
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President Todd said the graduate and professional enrollment goals were 7,500. The university is at 7,252. Some of that impact is because of 9-11 and the decreased number of incoming international students.
The university's undergraduate enrollment goal is 18,707. It is now at 18, 500. It has been necessary to watch the size of the freshman class because of budget constraints and the inability to add faculty. The administration did not feel that it could continue to grow the freshman class any faster; therefore, the numbers have been held back. There was, however, an increase this year.
The recent CPE meeting released information showing that the overall population for Kentucky increased only 1.5 percent this past year, which is not enough to get toward the 2020 goal. A lot of that increase was in the Kentucky Community and Technical College System (KCTCS), and UK probably had the largest increase for undergraduates in the state of Kentucky this last year.
President Todd said that the university wants to increase the retention rate for undergraduate students. The goal was to increase the first- to second-year retention rate to 83 percent. While it appears that the university will not make that goal, there was a slight increase this year over last year. He pointed out that this goal has not been accomplished, and there is still work to do.
President Todd reported that the six-year graduation rate goal was exceeded two years ago, but it was not exceeded in the fall of 2004. Therefore, this goal has not been met. Other state four-year institutions are at 30 percent and 40 percent in this measure. Being up in the area of 60 percent is somewhat pleasing for the administration. The goal is to be at 70 percent, and that is where UK's benchmarks are. The Top 20 Business Plan information that will be provided to the Board will show that this is the target that UK really needs to achieve by 2020.
President Todd talked about faculty salaries. While there have been increases, UK's benchmarks are increasing salaries to higher levels than UK. He said that he is going to put the highest premium for next year's budgeting process on faculty salaries. There have to be some increases in faculty and staff salaries in order to get where the university needs to go. In the Top 20 Business Plan, salaries will be put in as part of the budgeting process in order to try to catch up with this statistic. President Todd said that he is very pleased with the faculty that the university has been able to retain during this period of time and also with the faculty that have been recruited. The university has had some faculty leave because of salary conditions.
In the federal research dollars area, the latest number is for 2004. The university was at $130 million. With the performance this past year, UK should be above the goal of $140 million. President Todd said that he has asked the staff to look at the Top 20 universities that are above UK and plot their federal research dollars over time starting back in the 1940's and 1950's when the federal government started investing in research at universities to determine where those universities experienced their break point. If such research was done for the state of Kentucky, clearly when HB 1 passed in 1997 would have shown up as a transition time because that is when those numbers started growing for UK. President Todd said that he is very pleased


 
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with the results and very pleased with the amount of research the university is doing to affect Kentucky's problems. He was pleased to report that the university is on target to complete this goal.
Under the goal of discover, share, and apply new knowledge, doctoral enrollment and doctoral degrees awarded are two things that the university is tracking.
Dr. Jeanine Blackwell, Dean of the Graduate School, announced at graduation that the university has exceeded its goal for awarding doctoral degrees. It was a very pleasant announcement, and this achievement is very important.
President Todd reported that the university is behind its goal in doctoral enrollment. Some of that could still be due to the situation with international students. The economy could also have an effect. The university will continue to work hard in this recruitment area. This goal is still to be achieved.
Post doctoral enrollment is very important, and it really is a measure of the amount of research the university is doing because post-doctoral students come to join faculty who are active in research. This is after they finish their Ph.D. The students are really on top of their game at that point and want to go into an institution to work with faculty members. The university has exceeded that goal by 20. It still has another year to go. President Todd said that he is very pleased with this accomplishment.
President Todd noted that in the area of diversity of thought, culture, gender, and ethnicity, UK will not meet its goal. He reported that he had been meeting with faculty, Interim Provost Scott Smith, Associate Provost Phil Kramer, and Vice President Bill Turner to discuss improving the strategies in these areas and to get the African-American diversity where the administration wants it to be and where it needs to be for the good of the university.
President Todd talked about the resident African-American retention rate. Two goals have been achieved: overall undergraduate retention and graduate enrollment of resident African-American students.
President Todd noted that in general first-year retention is down, at 73 percent, and the graduation rate is 53 percent. He pointed out that between the end of the freshman year and graduation there is work that needs to be done. He said that strategies will be put in place to meet those goals.
President Todd said that the university has never been able to meet the African-American administrative and managerial goals in the faculty and staff areas. The administration will have to focus strategies in that area in order to improve the percentage. He pointed out that there is work to be done there.
President Todd said the university had done much better in hiring females for those areas. The university is close to meeting its goal for hiring female faculty and has exceeded the goal in the executive and managerial staff areas. One of the good things about tracking these each year


 
is you begin to see where you are falling short. You then set strategies to try to fix those things, and that is the process the administration is going through right now.
President Todd reported that progress is being made to achieve the goal to elevate the quality of life for Kentuckians. In information provided by Dr. Baldwin earlier, she mentioned that the Patent Trademark Office has been quite slow in issuing patents in the last couple of years. They are going through some systems changes, but UK has exceeded its goal of the number of patent applications for the last two years.
President Todd noted that the university will also be measuring the number of start-ups businesses last year and specifically where those start-ups were.
He talked about the amount of money the university is spending in research that is directed toward public service. With the Commonwealth collaboratives, the university will be focusing on 23 issues in Kentucky. As the university focuses on those issues, more funding should follow. The $55 million from outside grants and contracts is new money coming to Kentucky to solve Kentucky's issues.
President Todd concluded his report by calling attention to the 2004-05 Summary of Progress slide and noted that the goal had been achieved for 14 key indicators. While some goals may not show progress, the university is making progress on some of them. He mentioned areas that the university needs to focus on and give particular attention to, including faculty salaries being noticeably low and African-American enrollment in the freshman class. He was pleased to report that some progress has been made in these tight fiscal times.
I.         Naming of Building (PR 3)
President Todd recommended that the Board approve renaming the Public Service Commission Building the "Robert Straus Behavioral Research Building" located at 515 Oldham Court. The building is currently being refurbished so the university can use it to do some externally funded and other behavioral science research on a variety of medically related conditions, as well as for alcohol and drug research.
Professor Straus came to UK in 1956 as a member of the planning staff for the newly started University of Kentucky Medical Center. He served as the first Coordinator for Academic Affairs for the College of Medicine and for 28 years as Chairman of the Department of Behavioral Science in the College of Medicine. In addition to his service, scholarship, and research, he has trained generations of behavioral scientists and physicians at the University of Kentucky.
This recommendation has been reviewed by the Committee on Naming University Buildings. They found it to be in compliance with university policies. President Todd recommended approval of PR 3.
On motion made by Mr. Shoop, seconded by Ms. Tobin, and carried, PR 3 was approved without dissent. (See PR 3 at the end of the Minutes.)


 
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J.         Quantitative Waiver for Submission of Requests for New Academic Programs
President Todd said that PR 4 is a recommendation that the Board adopt a resolution for submission of a quantitative waiver to the Council on Postsecondary Education (CPE). This quantitative waiver allows the university to submit new program requests to CPE. In the Kentucky Plan for Equal Opportunities in Higher Education, there were eight objectives established for the University of Kentucky. If UK failed to meet three of those objectives, the administration must go before CPE with the recommendation that CPE waive the clause that would no longer allow UK to recognize new academic programs.
President Todd noted that UK missed three of the objectives. He briefly reviewed each of the objectives missed and noted that the employment of African-American in executive administrative and managerial positions needs serious attention. President Todd said that the university will have to submit strategies for each of the objectives missed in order to try to get back in line with the CPE requirements.
President Todd reported that Deneese Jones led the University Commission on Diversity in setting up a diversity plan task force for a university-wide diversity plan that is inclusive of all of these goals before she left the university this past summer.
He recommended that the Board authorize the work plan in PR 4. Following the Board's approval, it will then be submitted to CPE so the university can continue to add courses.
Dr. Dembo said that all of these objectives apply to Africans-Americans and yet in numbers 2, 3, and 4 of the ones in which the university has made inadequate progress it is not specifically indicated that those are African-American students. For accuracy, it probably should be stated as such.
President Todd agreed with Dr. Dembo's comments and said that it needed to be corrected. He expressed appreciation to Dr. Dembo for pointing that out.
On motion made by Ms. Haney, seconded by Ms. Smith Edge, and carried, PR 4 was approved without dissent. (See PR 4 at the end of the Minutes.)
K.        Audit Subcommittee Report
Mr. Hardymon said that the Finance Committee has a subcommittee which is the Audit Subcommittee. It meets twice a year at a minimum, and Ms. Wickliffe is the chair of both the Finance Committee and the Audit Subcommittee. He asked Ms. Wickliffe to give the Audit Subcommittee report and then go into the Finance Committee report.
Ms. Wickliffe reported that the Audit Subcommittee is made up of Billy Joe Miles, Myra Tobin, and herself. The Audit Subcommittee's primary charge is to provide oversight of UK's


 
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financial practices, internal controls, financial management, and standards of conduct. The subcommittee is responsible for reviewing financial statements, assuring the Board that the statements reflect the financial condition of UK, determining the accuracy of internal controls, assuring the Board that any significant non-compliance with regulatory matters will be brought to the Board's attention, and insuring adherence to UK's conflict-of-interest policy.
Ms. Wickliffe reported that the subcommittee met with Mr. Joe Reed, the internal auditor of the internal audit committee of the university, and the external auditors Deloitte & Touche. Internal controls have been reviewed and found to be very good. Mr. Reed and his staff seem to have a strong internal program as confirmed by the external auditors. Ms. Wickliffe commended Mr. Reed and his staff on the professional performance of the work. The annual report is available to all Board members of the internal audit committee.
Mr. Hardymon and Ms. Wickliffe met with the external auditors, specifically Mr. Jim Carpenter, and discussed the audit and management's cooperation. Mr. Carpenter assured them that there were no problems in getting information to them to perform their audit.
Ms. Wickliffe reported that the other item discussed in the Audit Subcommittee meeting was the renewal option for the independent auditors. The university's four-year contract ended on June 30, 2004, but UK had the option to renew two one-year contracts, which it did. At the end of the two-year contract, the partner will be changed even though the second-line partner has been changed every year in the last three years. The increase in the price of that will be according to the CPI (consumer price index) and that right now is somewhere between the 2 percent and 3 percent.
Ms. Wickliffe reported that the Audit Subcommittee did have a good discussion on the Sarbanes Oxley Act that the Board discussed at its retreat. All of the items that UK was not complying with, even though UK does not have to be in compliance at this time, have been or will be corrected by this time next year.
Ms. Wickliffe thanked Mr. Reid and his staff for the progress they have made on the internal audit. It looks as though it is a good program. It has been reviewed by the external auditors, and they were very pleased as well. She recognized Mr. Reid who was in the audience.
L.        Finance Committee Report- Gifts and Pledges (FCR 1 through 19)
Ms. Wickliffe noted that FCRs 1 through 20 are consent items. FCR 1 through 19 are gifts and pledges that total $9.7 million: $4.4 million will be matched by the state under the endowment match program, and $5.3 million for the basketball practice facility.
M.       Report of Lease (FCR 20)
Ms. Wickliffe reported that FCR 20, which is on the consent agenda, is the report of leases not exceeding $30,000. There are three renewals and one new lease.


 
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N.        Approval of Lease (FCR 21)
Ms. Wickliffe said that FCR 21 is a lease between the College of Medicine and Blazer Parkway Venture, LLC. The space is located at 3470 Blazer Parkway in Lexington, and the lease will run through June 30, 2010. On behalf of the Finance Committee, she moved the adoption of FCR 21. Ms. Tobin seconded her motion, and it carried without dissent. (See FCR 21 at the end of the Minutes.)
O.        Acceptance of Audit Report and the Report on Compliance and on Internal Control for the University of Kentucky for 2004-05 (FCR 22)
Ms. Wickliffe said that FCR 22 is the Acceptance of Audit Report and the Report on Compliance and on Internal Control for the University of Kentucky for 2004-05. The Finance Committee was given a detailed and thorough report by Mr. Marc Mathews, Controller, on FCR 22. She commented about the report from President Todd at the very beginning. She called attention to the independent auditors report and read the following statement from their report: "In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the University of Kentucky and affiliated corporations as of June 30, 2005 and 2004, and their changes in net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America." Ms. Wickliffe said that this statement specifies that it is a clean, unqualified audit and one that the university wants each time. She encouraged the Board to read the notes that better clarify what the figures represent.
Mr. Wickliffe reported that the university ended the year in excellent financial condition. As of June 30, 2005 the university has assets of $2.45 billion, liabilities of $582 million, and fund balances of $1,863 billion. She noted that new assets increased $125 million or 6 percent during the year. She moved the adoption of FCR 22, and Ms. Haney seconded her motion.
Mr. Hardymon said that the financials are something that some spend a little more time enjoying than others. As a Board, they should look at a couple of items: net assets improvement of $125 million shows UK is a very strong organization, and to run the university, you have to have a fund balance. To see it improving is very positive. These two items show the strength of the organization. It is more or less called balance sheet management instead of maybe just regular revenue and expenses.
Mr. Hardymon expressed appreciation to Mr. Butler, Mr. Owen, and Dr. Smith for their good work. A good set of financials allows the Board to be comfortable. He said that he had