State auditor finds systemic problems with Kentucky State University’s finances

FRANKFORT, Ky. (WKYT/WAVE) - The findings have been released from State Auditor Mike Harmon’s report of Kentucky State University’s finances.

Harmon says he did not have a hands-on approach in the audit but says his staff uncovered troubling information.

The report found systemic problems and a “chaotic accounting environment that lacked effective safeguards and responsible management,” according to Harmon’s office.

[Read the full report below]

Following an investigation that began in April 2022 after the passage of House Bill 1, Harmon’s office found a total of twenty significant issues within the Kentucky State University report.

Those issues include undocumented credit card transactions, extravagant bonuses and a lack of controls that put millions in federal grant funding at risk.

Harmon says there were undocumented credit card expenses including questionable purchases in Las Vegas and more than $9,000 spent at a daylong retreat at the Kentucky Castle.

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

Interim KSU President Dr. Ronald A. Johnson says changes are already in the works.

“And I assure you, we are working with great haste to ensure that the public trust in Kentucky State University is maintained. Or essentially, returned,” said Johnson.

Harmon said recommendations have been provided to the university to address areas of concern within the report.

“Ultimately, changes within the university will need to be made and carried out by KSU’s next president, KSU Board, university administrators, and to a certain extent the General Assembly,” Harmon said.

Several state and federal agencies could issue further findings and there could be investigations. Harmon says the more than 120-page examination has been forwarded to the U.S. Attorney’s Office, Attorney General, U.S. Dept of Treasury, and the U.S. Dept. of Education.

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