BOT Meeting Updates

Legislative Update
The university loss of $4M from its operating budget because of declining enrollments in 2005-06 and 2006-07. The university, also, took a $2M hit its budget for the Law School for the same reason. The Law School was approved funding @ $15M over 5 years @ 525 FTE; however, the FTEs are down to 414.

The number of out-of-state students attending FAMU are down from 30% in the 90's to 14%, the reason suggested for this is the rising cost in tuition. (The lack of an effective student recruitment program may have also played a roll.)

Governor Crist vetoed the 5% tuition increase.

$1M provided to the BOG Task Force on FAMU Finances and findings will be reported to the Governor, Senate President, Speaker of the House, and Joint Audit Committee.

Go to Lawson brings home the bacon to get a complete list of funded items and projects.

A House bill not yet signed by Governor to assist universities in commercialization of products and services created by the university. Side bar - will sponsored research and the technology transfer office take 100% advantage of this bill that could be additional funding to the university?

Senate bill - Conforming strategies to the constitution transferring responsibilities from the Comm Ed and perserving the oversight of the Board of Ed. Repealed some powers and duties from university presidents.

Universities have 60 days to come up with a proposal to offer B.S. degrees on community college campuses; however, if they fail regional private colleges will have the ability to so.

BOT now has the ability to named buildings, parks, etc after living persons.

Two members quit BOG Task Force

Chair Bill Jennings informed the BOT that two members have resigned from the Task Force: George Allena and Albert Dotson. The Task Force will develop a scope on how they will utilize the $1M appropriated by the legislature. Chair Jennings wants to insure that all information going to the TaskForce comes through the chair and that the BOT has a copy of the information as well, and that all information is shared with the BOT from the TaskForce. The Task Force is charged with submitting a report by the March 1, 2008 to the Governor and other entities.

Pappas Report
Pappas Report recommends that some universities offer primarily BS degrees. A two day conference was held in Tallahassee. A&M has really been represented at these conferences by the NAA, even at the first conference. Chair Jennings believes that the board should take a stance. Trustee Diallo reported that the faculty senate established an Ad Hoc committee chaired by Dr. Henry Lewis. He funded the registration fee @ $125. The next meeting will be held on May 25. Dr. Alceste (author of Pappas Report) gave an explanation of the report and described it as atypical and bold. The last meeting regarding this report is May 25 in Tallahassee.

Funding the transition
A request was made to fund the Presidential transition account request of $70,000 and $4,000 in contingency. The money will cover the transitioning in of Ammons and the transitioning out of Bryant.

Larua Branker questioned the need for this account and why it should be established and what it should cover since Ammons comes on board in July and not now. Ali explained that Dr. Ammons attended Dr. Leonard Johnson's funeral in Philadelphia last week and we covered the cost of that. Trustee went on to explain that Dr. Ammons will be traveling back and forth each week to Tallahassee and other sites on FAMU's business.

Salary adjustment for Robinson
A salary adjustment was was requested for interim Larry Robinson . Robinson is currently making $135,000 and is asking that his salary be adjusted to $225,000 until July 2. A 6 or 7 week period.

Robinsion, a researcher, had planned to spend this summer working in Washington, DC and had already leased an apartment. Jennings requested that he be reimbursed for trips to DC and his 2 month lease.

Also, because of SACS we might have to adjust his title from COO to CEO per SACS standards 2.3. in order to remain in compliance. This was pointed out by Trustee Gillum.

Audit & Complianc
Rufus Little - reported on audit and compliance and the following items were removed from the agenda today - Report on the A-133 Federal Audit and the Annual Report and Audit for NSF. Little presented an amendment to the yearly audit work plan and was motioned and approved. Jennings indicated that there is a need to revamp membership of the BOT audit committee. Diallo questioned why the Brown reports never saw the light of day. Little's response was they did not have the work papers associated with Brown's audit and he is speaking for himself. He also indicated that Castell was not aware. "Didn't the AG state that she was aware of it in the audit report?" asked Diallo. Little responded "Yes, the AG did say that." Diallo wanted to know why and shouldn't those reports have been sent to the full BOT? Diallo informed Little that there are emails published on RN and we will deal with those later.


Outside contracting
Diallo asked about the $14M contract to Siemens for Energy Performance and what would it actual cover? Stallworth responded heating, cooling and other things like that.

Larry Henderson -
Trustee Diallo - the project Aspire is that a part of the state PeopleSoft project?

Larry Henderson - it's the state PeopleSoft that never went live.

Trustee Holmes - you mentioned the settlement agreement?

Larry - we went to a comparative bid process for ERP. We needed to. We looked at Oracle and Cedar Crestone. We entered into an agreement with IBM, because we ran out of capacity and we don't have the equipment to do that so we are buying storage from them.

Holmes - walk me through what you mean by settlement agreements.

Larry - we we went through planning our budget and we determined that we couldn't go live. We pushed back going live in December, as a result we determined that we needed to extend these agreements. They provided work for us. We have two kinds of folks: folks tied directly to EIT doing work and people in other parts of EIT that are not directly tied. We are rebuilding the websites, some 56 different looks; we are rebuilding our E-commerce, distance learning and things like that. Also, we are dealing with security breaches, stuff like that.

Holmes - these vendors are calling and say we owe them money. Did you have to rework their contract?

Larry H - yes, when we did not go live we had to rework their contracts.

Holmes - what kind of legal protection do we have.

Larry H - we pay the folks what we owe them.

Holmes - have they already signed off on it.

Larry H - that's with the leadership team and I am not aware of it.

Branker - it is still not clear the contract gap and settlement agreement. Was there a gap or stop work?

Larry H - I joined the organization in January '06. The contract labor people had been working without a contract since September '05.

Branker - so they were not on contract?

Larry H - yes they were not on contract. It became necessary to do a settlement agreement. What transpired subsequent to that when it appeared we were not going live with payroll, we tried to put together a contract and extensions. Unfortunately, the contracts did not get signed around January 11. They were returned and we sent this to the president again in February and this kept happening all the way until May.

Branker - so while the vendors were waiting were they being paid?

Larry - no the vendors were not paid.

Branker - are they paid now?

Larry H - no we can't pay them until the settlement agreements are signed. Our staff augments vendors. Those vendors go out and subcontract other vendors with expertise we need while the people we hired to do the work are still working for us.

Branker - when was the payment to be made?

Larry H - December '06.

Branker - so the last five months they have not been paid.

Diallo - what's the total amount of the settlement contracts?

Larry H - $4.3M, I think. Ali has the accurate figure.

Diallo - so we are settling with them for this amount from Dec '06.

Holmes - I am concerned that we are tapping around the truth. We would have left here not knowing what we owed. Number one, did your staff run this by the president at that time.

Diallo - I thought the board said this should not happen again. This is the same scenario. Where are the contracts?

Larry H - there are four contracts.

Diallo - where are they, they are not in our packages.

David Self (Liz Office) - we just reached an agreement yesterday and they are not in your packages.

Larry H - the transparency is that we know that we are going to have these expenses, but budget based on what the needs are?

Holmes - Come again. Where are you getting the money from?

Larry H - it was sent to Grace Ali.

Grace Ali - we owe this board an apology. We said it would not happen again and it did. It should not have happened. It is true that the budget does not provide the funding for this expenditure. That is the responsibility of each VP. I know that you know the vendors are owed. To answer your questions we are going to look into everyone's budget and pull it from across the campus. This will only cover up to April. I have been told.

Jennings - when did you become aware of these contracts?

Ali - I have always been aware that EIT has been underfunded. To this point and day, there is no such purchase order issued for these orders.

Larry H - let me clear something up if I can. The budget for EIT, the commitment was $15M and it was not there. When investigating those other sources those sources were not there. Historically it has come from multiple sources. The efforts are reoccuring expenses that we know we are going to have. The way we make sure this does not happen again is we fund what we can do.

Duncan - I appreciated Ali's apology. We put this university in a position that is unnecessary. We allowed people to work without a contract. I am livid and the public should be livid.

Gillum - what was the May 31 date you gave.

Larry H - it is the settlement agreement date.

Gilum - we have two weeks to find this $4M?

Larry H - that is what Dr. Ali is working on.

Gillum - you don't know the real number?

Larry H- no.

Parks - first I agree with Trustee Duncan. One I am concerned that we did not have a contract in place.

Larry H -

Jennings - before we go any farther, Dr. Castell Bryant is on the phone.

Larry H - those amendments went on Jan 1-, March 31, and were sent back and unsigned by the president.

Castell - a request was made to give the CFO a projection of the cost to continue. She did not receive the projections from Larry. We had a couple of meetings. I met with Herrington, Stallworth, others instead of trying to take all of the funds out of E&G. We had funds in PECO we going to use and we were going to take this out of other sources. Chairman you have a memo that I wrote to Mr. Henderson in response to an amendment that was sent to me to be signed. I had not seen contracts and I wanted to know why the amendments were changing. Someone asked Mr. Henderson if this was run by me. I have not seen contracts. Mrs. McBride can give you what I have to you. I did not have the original agreement. Mr. Henderson sent me the information back and none of that was included. I could never got all of the information. When I found out those people had been working, I didn't know that the contracts had been expired. When I sign off on an agreement, there is permission to negotiate the work on the money that is available. There is a current situation at FAMU where people are allowed to work without contracts. I echo Ali's apology and I did not know. Mr. Henderson indicated that the contract labor is not a part of the regular labor. I say to you that I did not know about this.

Gillum - do you have contracts, I would like to see the contracts and the amendments.

Larry H - yes, I have those and I will make those available at the appropriate time.

Holmes - the president said she has not seen the contracts.

Diallo - how long will these people continue to work and will they work another period.

Holmes - there are two contracts one ends in April and the other in June. MIS and MGT end May 30 and Borders and CedarCrestone on June 30.

Diallo - after June we will have no business with these contractors?

Jennings - yes, my understanding is after these contracts have ended. Have we identified sufficient funding to pay off the settlement agreements?

Larry H - I have to refer to Ali for actual dollars.

Ali - for the settlement agreements we don't really have a choice. We have to pay. We now have to start a process for competitive bidding to get this done for July.

Jennings - my concern is that we go forward for these agreements and not have the dollars.

Ali - yes sir, we need to get a plan in place and find out what the planning needs are.
We owe - MIS - $250,000; Borders - $200,000; CedarCrestone - $1.6M; and MGT - $2.2M.

Castell - I think Holmes wanted to know whatI knew, I am can provide information if needed.

McWilliams - settlement agreement suggest that there is some type of negotiation. Secondly under who's authority did these people work.

Rick Beyer (FSU person hired) - I am the project manager. Each time we met with the president we told her that we did not have funding; and we needed to get the contracts signed. Castell knew this and this is one of the reasons we didn't go live.

Castell - Chair Jennings you need to separate that from contracts not being signed.

Larry H - earlier on we expressed this. The signatures we were working with signed their agreements but we did not sign, then it ended up with them working without a contract.

Diallo - were these 4 contracts awarded with a competitive bid process; I know they may have been awarded after you came on.

Liz - all of these contracts we a part of FLAIR; we started this under an agreement with FSU, UF and they started with the initial meeting, however the left.

Larry H - only one was competitively bidded, that's IBM and this was discussed with the leadership team.

Parks - I just, I recognize we have an obligation to deal with these vendors in a positive manner. It's going to be very difficult.

Holmes - we have people that have done the work and Mr. Henderson was not forthcoming and transparent. I won't everyone to maintain their integrity. My concern is the board did not weigh in on this and the contract you have worked out with the vendor. Ali has stated that somewhere in our budget we will find the funds, but we are caught between and rock and a hard place.

Jennings - all in favor of approving the settlement agreements. Motion passed.

Branker - y
Diallo - n
Duncan y
Gillum - y
Holmes - y
Jennings - y
McWilliams - n
Parks - y

Jennings - I am extremely disappointed. For me you have not answered the questions. I think as a BOT we have to hold people accountable.

Parks - in light of the audit findings, we need to know where the money comes from.

Duncan - I don't have time to come over here to do your job. We asked questions and we still do not get answers.

McWilliams - I voted no because of this. President Bryant promised that it will not happen again. And, Mr. Henderson I don't understand.

Jennings - you said that you arrived and people were not working on contract, but you didn't make anyone aware. You arrived here and did absolutely nothing about.

Larry H - I respectfully disagree. We did everything we could to get those contracts signed and those people paid.

Contract and Settlement Agreement with Moore Integrated Solutions (MIS)
Contract and Settlement Agreement with Borders Solutions Group LLC
Contract and Settlement Agreement with Cedar Crestone, Inc.
Contract and Settlement Agreement with MGT of America
Amendment to Agreement with IBM for Information Storage Capacity

Jennings - let's move to item 7. We need someone to sign checks.

Parks - does it also address the SACS letter.

Jennings - yes.

Jennings - calls for the motion to give Dr. Robinson signature authority.

Jennings - Trustee Holmes on hiring and firing.

Holmes - We should have brought this up at the beginning of the agenda.

Jennings - open floor for the nomination of chair and vice chair.

Holmes - I nominate Jennings.

Jennings - Motion passed. Jennings is the new chair. I open floor for vice chair nominations.

Diallo - I nominate Holmes.

Jennings - motioned passed.

Diallo - I have been instructed that the transfers have already happened. Have you done that? Have summer school classes been affected by this already?

Ali - no maam. I would not do that without coming before the BOT.

Diallo - then perhaps, the Provost can answer the classes closing.

Austin - no, we did not do that.

Diallo - I was told that this has happened. Let me use myself. I was told that I could teach a French course but without a lab. This is something that hasn't happened in 17 years. I am confused.

Austin - so am I. We have a number of adjuncts teaching this summer and we still have a little money left for certain classes. We have been able to work with the colleges. This was not a decision from my office.

Jennings - let's move to the last item on the agenda. The IBM contract is $50,000.

Larry H - it is for information storage and it was cited in our IT audit.

Jennings - are there any questions? The motion passed. I want to apologize for getting old and I want to recognize our newest member to the board, Trustee Gillum.

Gillum - I am very excited about this year and I look forward to building our university.

Jennings - Dr. Robinson is there anything that you would like to say.

Robinson - I want to thank the board and Ammons for having confidence in me. I want to thank the staff and leadership team for bringing me up to date on these issues. Thank you for having confidence in my ability.

Jennings - Dr. Thompson would you like to say anything. I know the practice is to fill out a card, but I don't have none.