Statehouse Live: Regents say KU audit shows no major problems

? 1:05 p.m.

TOPEKA — A management review of financial accounts of Kansas University and the relationship between the school and various affiliated corporations, such as Kansas Athletics Inc., found no major problems.

The audit did question a contract that it said Athletics Director Lew Perkins has with a company that is a vendor with Kansas Athletics, but the report said the appropriateness of that relationship should be evaluated further. KU officials said that would be done.

Kansas Board of Regents members said they were pleased by the audit of KU and another one that was released Thursday on Pittsburg State University.

“Both of these institutions did very well,” Regent Chairwoman Jill Docking said after the board met in closed session to discuss the reports.

The audit, conducted by BKD, LLP, covered the final six years of Robert Hemenway’s tenure as chancellor of KU. Hemenway stepped down earlier this summer. The auditors reviewed management of all non-public accounts administered or controlled by Hemenway, and the dealings between the university and KU-affiliated groups. The audit included KU Medical Center too.

“Based upon our work and interviews we conducted, the Chancellor has been successful in instilling a sense or responsibility and accountability throughout the organization,” the report stated. “BKD procedures resulted in no identification of inappropriate disbursements of unrestricted funds by the University, including KUMC, or affiliated corporations of the University and KUMC.”

The much-anticipated audit followed one released in June of Kansas State University which raised numerous questions about how employees in the athletic department there were paid and detailed conflicts of interest in the operation of a business incubator.

The audits of KU, Kansas State and Pittsburg State University were ordered by the regents following the retirements of Hemenway, Jon Wefald as president of Kansas State, and Tom Bryant as Pittsburg State’s president.

But the findings of the KSU review, which was the first one completed, prompted Gov. Mark Parkinson to write the regents, calling for a broader policy of audits of regents institutions to maintain the public’s trust.

The regents complied, saying they will institute a more regular schedule of outside reviews.

10:30 a.m.

The Kansas Board of Regents has OK’d a $34 million addition of seating on the east side of Kansas University’s Memorial Stadium.

Under the deal, Kansas Athletics will direct $40 million — a portion of revenue expected from proposed club seating — to academic programs at KU.

Chancellor Bernadette Gray-Little called the proposal a “signal event.”

Regent Donna Shank said she has read about universities in other states donating athletic funds to academics and was proud to have the same thing happening in Kansas.

“Congratulations to you. Bravo,” Shank said to Gray-Little.

The cost of the project will be paid by Kansas Athletics.