AG says that KSU foundation is a public agency

AG says that KSU foundation is a public agency

Forward Kentucky
Forward Kentucky

By Austin Horn of the State Journal

The Office of the Attorney general issued an opinion last week which found that the Kentucky State University Foundation, the school’s primary private fundraising arm, is a public agency.

Assistant Attorney General Matthew Ray opined in favor of The State Journal, which appealed the KSU Foundation’s denial of a request for several records.
The State Journal had requested for several records from the KSU Foundation, which it denied by arguing that it was not a public agency and therefore not subject to state open records law.

Requested records include any payments made to former president M. Christopher Brown II in the last two years, payments made to fund Brown’s travel, payments made to fund his birthday parties and payments of more than $1,500 to any entity or individual.

The State Journal recently offered to limit the last request from 2017 to present.
Both the attorney for the KSU Foundation — Ed Logan of Logan, Burch and Fox and the foundation’s executive director Donald Lyons — have yet to respond to requests for comment about the ruling.

In late spring, The State Journal submitted an open records request to the KSU Foundation for its audit, which was denied. However, Lyons met with The State Journal and provided a copy of the audit while still asserting that he did not believe the foundation was a public agency.

Brown, in an interview at the time, said that he also believed the foundation to be separate from the university.

Ray frequently referenced a 1992 Kentucky Supreme Court ruling which stated that the foundation was a public agency. He wrote that there was insufficient evidence that the organization had changed enough since then to no longer be considered a public agency.

“From the evidence in this record, the Foundation appears to be the same entity it was in 1989, prior to the Court’s holding in Kentucky State Univ. Found., Inc. that the Foundation is a public agency,” Ray wrote. “… The Foundation’s claim that it is a different entity than the one before the Court in 1992 is not supported by the record before this Office.”

The audit, which includes financial statements from fiscal year 2020 and 2019, was requested by The State Journal after KSU could not approve its audit because it needed the foundation to complete its audit.

What is the KSU Foundation?

The foundation is a nonprofit agency that accepts donations from any source for the purpose of benefiting KSU. It has its own separate endowment fund, which has increased from $455,252 in 1982 to almost $12.3 million as of March 2021 according to a document shared by Lyons.

The university's website directs all potential donors to make gifts payable to the foundation.

No university staff or officials serve on the foundation's staff or board, per Lyons. The foundation also owns its own property, which sits adjacent to the university.
The disbursement request form lists five university employees that need to sign off on expenses before ultimate approval by Lyons, a former athletic director at KSU who has held several posts at the school.

The biggest expense in the fiscal year ending June 30, 2021 was scholarships at $512,280. University support, student support and salaries all totaled more than $120,000, and the Homecoming expense was $74,221. Total expenses for that fiscal year were just over $1.4 million.

University support, per Lyons, would include spending on events and general support — such as quickly repairing a roof — that wouldn’t have to go through the state bidding process. Student support expenses generally go towards helping students in their personal lives, potentially helping with rent or family expenses according to Lyons.

Lyons said that he and one other employee are paid. Lyons made more than $111,000 in the fiscal year ending June 2020 according to the nonprofit’s IRS filing.

Related story: Former KSU president charged $73,000 to university credit card as school's finances slipped

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Cross-posted from the State Journal

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