Audit of KCTCS shows lack of transparency, overcharging community colleges by $24M

Published 11:24 am Friday, December 8, 2023

State Auditor Mike Harmon released the results of a special examination of the Kentucky Community and Technical College System (KCTCS) on Thursday, which turned up five findings and two observations in the 16-school system that serves over 100,000 students statewide.

The five findings of the examination were:

  • The KCTCS System Office’s unrestricted carryforward balance is not accurately or transparently reported to the Board.
  • KCTCS overcharged community colleges $24 million and retained the proceeds from the overcharges as part of the System Office’s unrestricted carryforward balance.
  • KCTCS System Office fund balances do not agree to fund balance amounts reported to individual community colleges.
  • KCTCS did not use its accounting system to track accumulated spending and did not maintain all relevant procurement and bid documentation.
  • KCTCS failed to collect feedback from companies involved in TRAINS projects and $10,778 in duplicate payments were identified.

The two observations by the Auditor’s office included:

  • A misunderstanding regarding workforce training funding which led to concerns about a transfer to the KCTCS general fund.
  • KCTCS nepotism disclosures were not completed as required by policy.

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“Our auditors also provided KCTCS with numerous recommendations to address the findings in the report,” Harmon said.  “KCTCS serves thousands of students throughout all regions of the Commonwealth, and it is my hope that KCTCS can use this report to address necessary issues and continue to be a leader in post-secondary education for all of Kentucky.”

Barry K. Martin, chair of the KCTCS Board of Regents, said KCTCS takes seriously its state-mandated mission to empower the next generation of Kentucky students and workforce leaders.  That is why the Board of Regents moved quickly and voted unanimously after a March 2023 internal audit to request a thorough examination by the State Auditor’s office to look at actions taken by past administrators.

Martin noted, “In response to the report’s findings, the Board of Regents and current administration will work closely with the General Assembly, regulatory agencies and Council on Postsecondary Education to make necessary reforms.  We have already begun that process, implementing new policies and procedures in advance of the State Auditor’s final recommendations.  It is readily apparent that we can and must do more to ensure accountability and transparency, and everyone at KCTCS is committed to doing just that.”