The official minutes of the University of South Carolina Board of Trustees are maintained by the Secretary of the Board. Certified copies of minutes may be requested by contacting the Board of Trustees’ Office. Electronic or other copies of original minutes are not official Board of Trustees' documents.
The Fiscal Policy Committee of the University of South Carolina Board of Trustees met Thursday, June 14, 2001, at 9:30 a.m. in the Carolina Plaza Board Room.
Members present were: Mr. M. Wayne Staton, Chairman; Mr. A. C. Fennell, III; Mr. Robert N. McLellan; Mr. Michael J. Mungo; Mr. John C. von Lehe, Jr.; Mr. Mack I. Whittle, Jr., Board Chairman; and Mr. Herbert C. Adams, Board Vice Chairman. Members absent were: Mr. Alexander English; Mr. Samuel R. Foster, II; and Ms. Darla D. Moore. Other Board members present were: Mr. James Bradley; Dr. C. Edward Floyd; Mr. William C. Hubbard; Mrs. Helen C. Harvey; and Mr. Miles Loadholt.
Others present were: President John M. Palms; Secretary Thomas L. Stepp; Vice President for Academic Affairs and Provost Jerome D. Odom; Vice President and Chief Operating Officer J. Lyles Glenn; Vice President and Chief Financial Officer-designate Richard W. Kelly; Interim Vice President and Chief Financial Officer Allan W. Barber; Vice President for Information Technology and Chief Information Officer William F. Hogue; Vice President for Student and Alumni Services Dennis A. Pruitt; Vice President for Human Resources Jane M. Jameson; Vice Provost and Executive Dean, Regional Campuses and Continuing Education, Chris P. Plyler; Chancellor of USC Aiken Thomas L. Hallman; General Counsel Walter (Terry) H. Parham; Interim Budget Director, Office of Budget and Finance, Robert E. Bugbee; Director of Business Affairs Richard D. Wertz; Assistant to the Vice President, Office of Budget and Finance, Ken Corbett; Associate Chancellor of Business and Finance, USC Aiken, Virginia S. Steel; Director of University Housing Gene Luna; Director of Student Health Services William R. Hill; Director of Business Services, University Housing, Darryl Davis; Assistant Treasurer Susan Hanna; Associate Budget Director and Senior Analyst, Office of Budget and Finance, William Bragdon; Director of the Department of Internal Audit Alton McCoy; University Legislative Liaison John D. Gregory; Director of Presidential Communications and Research Gail Widner; Director of Governmental and Community Relations Shirley D. Mills; Director of Public Affairs Russell McKinney; and a member of the media.
Chairman Staton called the meeting to order and welcomed those present asking everyone to introduce themselves. Mr. McKinney introduced the member of the media who was present. Chairman Staton indicated that the agenda had been posted and the press had been notified as required by the Freedom of Information Act; the agenda and supporting materials had been circulated to the Committee members; and a quorum was present to conduct business.
Chairman Staton initially welcomed Mr. Kelly as the new Vice President and Chief Financial Officer of the University of South Carolina.
Mr. Stepp explained that the approval process of the Designated Fund budget required Fiscal Policy Committee recommendation to the Executive Committee for action; the full Board would then review the entire FY 2001-2002 University budget, including these funds, for final approval. He noted that during the course of the year the Fiscal Policy Committee was empowered to change subcategories within the Designated Fund budget.
In response to Mr. McLellan's question regarding the status of the Coliseum revenues and current solvency of the Koger Center, Mr. Stepp indicated that the Coliseum revenue projection for the upcoming fiscal year was adequate; privatization considerations for both of the buildings could potentially alter these budgets for 2002. He further stated that several University officials had been in the process of carefully considering various budgetary options for the future. Mr. Whittle explained that Coliseum revenue activities had been designated to generate funding which would offset an acknowledged deficit the Koger Center would incur. Dr. Palms stated that this issue was very serious and mandated further study to optimize program offerings, funding, and personnel.
Mr. Adams asked that the Board of Trustees, and especially the Fiscal Policy Committee, have access to up-to-date facts and figures noting that a discussion of the same situation had occurred during the previous year. Mr. Whittle summarized this request by stating that any future changes in Koger Center funding sources should be presented to this Committee on an ongoing basis.
Mr. Fennell expressed concern regarding the manner in which the Committee reviewed the Designated Fund budget. He believed that it was confusing and difficult to analyze and approve a particular category when it was not presented within the context of the overall general budget. "It is hard to decide how this fits into the whole picture of the whole scheme of things." Discussion ensued regarding the history and context for the review of the Designated Fund budget. Mr. Stepp opined that Committee review of this budget was not necessary, but deliberately redundant, as stated in Article 6 of the Bylaws, "except as otherwise provided in these Bylaws, matters determined to be appropriate for consideration by more than one standing committee shall be referred only to the standing committee of primary jurisdiction." However, under the extreme circumstances of more than a decade ago, it was decided to assign this budget two sets of scrutiny, providing it to the Fiscal Policy Committee as an additional courtesy and safeguard.
Mr. Whittle recommended that the Committee approve the Designated Fund budget as presented; in the future, this budget would be presented "in a full format with both balance sheet and P&L to the satisfaction of Mr. Fennell so that it can be reviewed by this Committee before it is incorporated into the budget that goes to the Executive Committee for approval."
Mr. Fennell moved approval of the Designated Fund budget as described in the materials for this meeting with the proviso that, in the future, the Committee would receive this information within the context of the entire budget to improve the process of analysis. Mr. McLellan seconded the motion. The vote was taken, and the motion carried.
Mr. McLellan suggested that, based upon current discussions, the Bylaws may have to be amended since the Fiscal Policy Committee had been tasked with the responsibility of reviewing and recommending this particular budget to the Executive Committee.
Responding to Mr. von Lehe's concern regarding the potential reclassification of these funds, Dr. Barber stated that this money was received from the federal government for institutional expenses which the University subsequently allocated to research. He stressed the fact that this funding was not state appropriated. "Most institutions, outside of South Carolina, earn income from the investment of those accumulated indirect costs funds, or overhead funds, and use them in support of research. In the state of South Carolina, they go into a state account and are invested by the state with all of the income going to the state." The establishment of this quasi-endowment, therefore, would capture the generated interest for University research.
Mr. Kelly further commented that this money had originated from the University. No account was available to hold these funds during a transition period; therefore, the state treasurer invested them and ultimately retained the earned investment incomes for the general fund. The quasi-endowment would provide a mechanism for the University to fully utilize these funds.
Mr. McLellan moved approval of the establishment of an indirect cost recovery funds quasi-endowment as described in the materials distributed for this meeting. Mr. Mungo seconded the motion. The vote was taken, and the motion carried.
Mr. Mungo complimented Mr. McCoy for his outstanding work, his extensive knowledge of the financial workings of every department, and the deliberate manner in which he proceeded. Other Committee members expressed support of Mr. Mungo's comments.
Mr. Whittle inquired about the bookstore audit. Chairman Staton explained that Mr. Kelly had requested additional time to thoroughly review the information. Chairman Staton asked Mr. Stepp to schedule a special meeting of the Fiscal Policy Committee for that purpose.
When there were no other matters to come before the Committee, Chairman Staton declared the meeting adjourned at 10:20 a.m.
Respectfully submitted,
Thomas L. Stepp
Secretary