[people chattering] [gavel thunks] - Apparently, I didn't bang the gavel least time, so I got corrected this morning.

Good morning, everyone.

- Good morning.

- Morning.

We've had productive virtual and in-person committee meetings over the last week and I do appreciate everyone's willingness to try a different process, and I've had positive feedback so far.

So I appreciate that.

We've got a full agenda today.

I ask all committee chairs to give their reports from their seats this morning, but before we get started, I wanna formally welcome Chancellor James Martin II of North Carolina A and T, and Chancellor Bonita Brown of Winston Salem State University.

[everyone applauds] I'm glad to see they came back after yesterday.

It was a long day.

Okay, so now I'd like to call on Governor Clark for the invocation.

- Good morning everyone.

Heavenly Father, we come before you with gratitude for the opportunity to serve this great state of North Carlina, through the stewardship of its universities.

As we gather today, we ask for your wisdom and guidance in decisions we are about to make today so that they may reflect your will and serve the best interest of all students, faculty, and staff who are part of this educational system.

Grant us the judgment to recognize the needs of each university and the courage to lead with integrity, fairness, and compassion.

Help us to remain mindful of the power in education, in shaping lives and communities and let our efforts contribute to a future of knowledge, opportunity, and hope for all.

Bless our university, their leaders, and every student striving to learn and grow.

May our work honor the legacy of this great state and may our decisions today help pave the way for a brighter tomorrow.

In your Holy name, we pray, amen.

- [Everyone] Amen.

- Thank you.

Secretary Burris-Floyd, will you please call the roll?

- Yes.

Good morning everyone.

- [Everyone] Good morning.

- Chair Murphy.

- Here.

- Vice Chair Blue.

- Here.

- Dr. Barnes.

- Here.

- Mr. Bradley.

- Here.

- Mr. Cameron Brown.

- Here.

- Mr. Harry Brown.

- Here.

- Mr. Byers.

- Present.

- Mr. Chadergy.

- Here.

- Mr. Clark.

- Here.

- Mrs. Coward.

- Here.

- Mr. Davis.

- Present.

- Mr. Ford.

- Present.

- Mr. Frailly.

- Here.

- Mrs.

Grille.

- Here.

- Mr. Holly.

- Good morning.

- Good morning.

Mr. Holton.

- Here.

- Mr. Hutchins.

- Here.

- Mr. Mitchel.

- Here.

- Mrs. Nichols.

- Good morning.

- Good morning.

Mr. Pope.

Mr. Ramsey.

- Present.

- Mr. Sloan.

- Present.

- Mr. White.

- Here.

- Mr. Willoford.

- Here.

- Madam Chair, you have a quorum.

- Looking at today's agenda, does anyone have a conflict of interest or an interest that would appear as a conflict of interest under the State Ethics Act?

Okay.

Very good.

Good morning.

My deep belief as a former teacher and as chair of this board is that every child's success begins with reading.

It is frustrating and heartbreaking then, to sit here today, knowing that there's still work to be done to address the literacy crisis facing our state.

To date, we have not moved quickly enough to prepare future teachers, who in turn, will teach our children how to read.

Recent data from the North Carolina Department of Public Instruction shows students made slight improvements in most reading tests, but experienced declines in fourth and seventh grade reading.

And DPIs public school testing data show that some schools in small and rural counties across North Carolina are producing third to eighth grade students with reading proficiency levels well below 30%.

This is unacceptable and frightening, and we have a system-wide responsibility to address the root of the issue.

The UNC system's 15 teacher preparation programs are the largest source of public school teachers in this state.

And while some are excelling in or improving literacy training for future teachers, others are still not where we need to be.

Close, but not there yet.

I joined this board in 2017 and I'm currently serving my eighth year.

In 2017, then President Spellings began the work to make our colleges of education better and stronger.

We brought in consultants who noted a wide range of variations across the campuses on how we were preparing future educators.

For at least the past seven years, this board has been working to help our colleges of education be better.

If you were present during yesterday's Ed Planning Committee, you heard the most recent review of our university's literacy program.

I'm sad to say the report was unsatisfactory, given the critical needs of our K-12 students.

After seven plus years, we are not 100% across the finish line.

The facts are simple, there's only one correct way to teach children to read.

That method is called the Science of Reading, and it includes phonics, vocabulary, and exercises that help children connect words with sounds.

Decades of research have proven this is the only method that works.

And this is not new information to us or to our institutions.

In 2020, this board passed a resolution directing the UNC system to develop a framework for literacy for all institutions to adopt and use.

In 2021, the legislature passed a law requiring the Science of Reading to be used in all teacher preparation programs for elementary and special education.

And then in 2023, the legislature banned Three Cueing, an outdated reading method that does not align with how the human brain learns and retains reading skills.

In January of last year, it came to the Board's attention that only a handful of our universities had successfully incorporated the Science of Reading into their curricula.

So the Board passed yet another resolution, calling for our institutions to immediately address the issue.

Several of our universities responded to this direction, made changes, updated course requirements, and made sure instructors were equipped to teach the Science of Reading.

That's movement in the right direction and I'm glad to see progress.

I also applaud these institutions for their leadership and commitment to the success of the K-12 students who may one day attend our universities.

Their work is critical to the success of our young children.

But for the institutions that haven't yet complied 1005 with state law and implemented the Science of Reading, time is up.

In the seven plus years that we have been working to get this right, think of all the educators that we have graduated without the proper tools to teach reading, and think about all the children in our schools that have gone another year without having mastered the basic skills of reading.

We've been patient and have provided resources, guidance, and assistance to address the issue.

And we have allowed ample time to make the required changes.

Too much time, in my humble opinion.

With that in mind, the Board has now set a December 1st deadline for all remaining UNC system institutions to revise their literacy programs to include the Science of Reading.

And after speaking with chancellors over the past week, I have confidence we will get there this time.

This is not an issue of academic freedom.

This is an issue of occupational licensing.

The law is the law and state licensing boards will pass or fail prospective teachers, based on their knowledge of legally required teaching methods.

We would not allow our universities to teach nurses to treat a fever with leaches, and we will not allow our universities to teach outdated and scientifically debunked reading methods.

Academic freedom is one thing, defying the law is another.

I will leave you today with this, reading is the single most important skill we can impart to ensure equal access to education for everyone.

It is the foundation of communication.

It opens worlds to children who may not have the means to travel or explore outside their small towns, and it frees minds to explore all points of view to discuss, debate, and connect with others who may have very different life experiences.

I hear many thoughts these days about the Board's new equality policy, and about how it may or may not impact educational access and success for students from every background, ethnicity, and belief.

So let me be clear, the University of North Carolina welcomes every student who is academically prepared and who wishes to learn and grow at our institutions.

We are a forum for all.

Academic centers will remain open.

Students, faculty, and staff will continue to exercise free expression, and universities will remain a neutral host to those debates, but if our institutions do not master the basics, reading instruction being one of them, we have no hope of opening our doors to future generations.

This issue, literacy, is ground zero for accessibility and student success.

This is the basis of a diverse and well-educated public.

One of my favorite Bible verses, Luke 12:48 says, "To who much is given, much will be required."

Our state is blessed to have a public university like ours with educational resources, talent, and influence, but that influence comes with a responsibility to serve the needs of the students who depend on us.

We must do whatever we can to equip our teachers with best practices in all subjects, to ensure student success.

We must not let future generations down.

Thank you.

President Hans.

- Very well said, Madam Chair.

I'm happy to report that enrollment is up across the UNC system this fall.

We are welcoming more students at lower costs at all of our public institutions.

System-wide, enrollment increased roughly 2.2% this year, giving us an overall boost of 3.5% since 2022.

We now enroll nearly 248,000 students across the state, which is a record.

Every one of our campuses saw growth over the last year, and all but two have grown since 2022.

There are now more than 8,000 additional students pursuing a life-changing opportunity across our state than there were two years ago and you should be enormously proud of that.

You can see that we've had, especially strong growth at our larger institutions and most of our HBCUs, and there's been an encouraging reversal at UNC Greensboro and UNC Asheville, two institutions that saw declining enrollment in recent years, but have now stabilized with an eye on the future.

Those gains come in the face of strong headwinds.

It was in September, 2022, that I warned this board of the challenges before us with a looming decline in the number of college-age, high school graduates, compounded by a growing national skepticism about the value of college.

Most of you will remember the lengthy presentation I made to the Board with multiple charts.

We have been preparing for a world of fewer young people and with fewer of those young people who see college as the surest route to success and economic security.

Those preparations we are all taking are yielding results.

Two years ago, I said that facing reality would mean sharpening our value proposition and reshaping our mission to match the state we're here to serve.

Together, we laid out a series of eight key steps to keep public higher education affordable, keep public confidence in our work, and keep our promises to the students and the families who trust us with their future.

First, we've kept tuition for North Carolina students flat for eight years running.

That matters not just for the math on any individual family, but for the message it sends to all families.

North Carolina's public universities belong to everyone and they're open to everyone.

Second, we delivered on the pledge to simplify financial aid, creating a state scholarship program that's easy to understand and reassuring to working families.

The next NC scholarship arrived in an especially important moment as colleges everywhere deal with the botched reform of federal financial aid, which created enormous uncertainty for families this year.

Third, we've patiently been building an online platform to reach adult learners and reengaged students who left higher education without a degree.

Project Kitty Hawk remains a crucial piece of our strategy to reach more North Carolinians who can benefit from what our universities have to offer, and to reconnect with students who have made progress towards a degree, but left without finishing.

That re-enrollment effort at Kitty Hawk has brought more than 2,800 students back to our universities and made a meaningful impact on this year's enrollment gains.

Fourth, we opened the door to more out-of-state students in places where we had capacity and demand, especially our historically Black universities, and we've done so while also adding more North Carolinians.

That has brought much needed talent to our state and much needed investment to our institutions.

Fifth, we've done what we promised on making the transfer process easier and more appealing, encouraging the ambitious students across the state to continue their education in the UNC system.

We delivered on the long overdue reform of common course numbering so that students can more easily map their future at a UNC system school.

We recently created comprehensive transfer guides so students and parents and counselors can see the upshot of transferring from the community college system to the UNC system.

And that has not been glamorous work, but it will pay off for our students, more than one third of whom will transfer at some point in their lives, either from community colleges, or within our system.

Sixth, we continue to push for on-time graduation, incentivizing campuses to boost average credit hours and keep students moving towards a diploma.

Nothing matters more for delivering on our value proposition than insuring successful graduation with preparation for life after school.

And all of our campus leaders will stay closely focused on that priority.

Seventh, we've publicized a comprehensive, independent study of our value to students and families, demonstrating that the vast majority of our programs deliver a clear financial payoff for students while being candid about the areas where we need to improve, holding ourselves to a public interest standard that is ensuring that students leave our public institutions with better prospects.

It's crucial for maintaining public trust.

Eighth, and finally, we've sent an important message that our public institutions are not the exclusive home of any one party, any one faction, or any one viewpoint, but genuinely do belong to all North Carolinians, protecting free speech, academic freedom, welcoming diversity of all background and belief, standing up for the equality of opportunity.

These things matter for earning public trust over time in a big, vibrant, and politically contentious state and nation.

Now these are not one-off initiatives.

They add up to a real longterm strategy to meet our core mission in a changing world, providing, affordable, meaningful opportunity to the people of North Carolina when and where they need it.

That's the business we're in, that's our mission, and that's the overarching focus of our efforts.

And we're adding new ideas, like NC College Connect, a partnership with DPI to enable qualified high school students to bypass the traditional application process in the six UNC system universities.

In the UNC Chapel Hills Choose NC Program, which utilizes the common app, Opt-In, for potential applicants to other universities in our system.

So none of us are taking a victory lap after one year's positive enrollment numbers.

The demographic cliff approaching is real.

The birthrate is real, quite measurable.

So the headwinds will remain strong.

And we don't measure the health of our public universities in a single snapshot, but over decades.

But I am encouraged that we have been clear-eyed about our challenges, strategic about where we're investing, and executing on the priorities we identified years ago.

It speaks well of this board and of our campus leaders, that through some tumultuous times in higher education, we've kept our focus where it needed to be, effectively serving the students and the families of our state, and strengthening our universities for the era ahead.

Thank you, Madam Chair.

- Thank you, President Hans.

It is good to see enrollment up at all universities.

We will now consider the Consent Agenda items listed as item five on today's agenda.

Are there any items that members of the board wish to have removed for discussion?

Hearing none, I'll entertain a motion to approve the administrative action items by consent.

- So moved.

- Is there a second?

Any discussion or debate?

All in favor please indicate by saying aye.

- [Group] Aye.

- Any opposed?

Motion carries.

Okay, Mr. Bradley, would you please share the report on budget and finance?

- Thank you, Chair Murphy.

Chair Murphy and members of the Board of Governors during its meeting on Monday, September 9th, the Committee on Budget and Finance approved its annual report summarizing the actions of the committee from July 1, 2023 through June 30, 2024.

The full report is available in BoardEffect.

Next, the committee considered transactional items which were approved by the full board through the Consent Agenda moments ago, including authorization to issue special obligation bonds in a principle amount not to exceed 15.5 million for the purpose of refunding UNC Greensboro's General Revenue Bond Series 2014 and the associated cost of issuance.

Authorization of three new capital projects at two institutions and five increased authorizations at four institutions.

Authorization for NC State University to acquire property by lease of approximately 28,000 square feet in Keystone Science Center on the Centennial Campus and authorization for NC State University to dispose of property by lease for a vendor provided distributed antenna system at Carter-Finley Stadium.

During our meeting yesterday, the committee discussed the 2025-2026 tuition and fees instructions that will be sent to institutions after today's board meeting.

While undergraduate resident tuition will continue to remain flat for 2025-2026, the committee discussed allowing institutions that demonstrate significant efforts to strategically realign and reduce resources to proposed increases in 2026-2027.

The committee also discussed the performance funding model.

Given that the General Assembly is unlikely to fully fund performance funding at the requested level, the Board of Governors should consider, one, how any FY '25 performance funds should be allocated, if appropriated, and two, how the model should be revised for the UNC System's long-session budget request.

Finally, the committee considered and approved the allocation of 67.23 million of FY '24-'25 UNC State Capital and Infrastructure Fund, SCIF, repairs and renovations, R&R, funds and increase capital authorization for specific major R&R projects as detailed in the materials available on BoardEffect.

The recommended allocation was included and approved by the full board and the Consent Agenda as well.

Thank you, Chair Murphy, this concludes my remarks.

- Thank you, Mr. Bradley.

I will now hear the report of the Committee on Educational Planning Policies and Programs from Mr. Hutchins.

- Good morning, thank you, Madam Chair.

[audio lost] Policies and programs approved the 2023-2024 annual report, the Comprehensive Articulation Agreement Annual Report, one new academic degree, five academic degrees discontinuations, and one institution's request for licensure, all of which were submitted to the board through the Consent Agenda and approved earlier this morning.

The committee also reviewed educator preparation efforts and the annual report from the UNCL System Office.

At yesterday's meeting, we discussed the Early College High School Graduates Report.

This is a tremendous program that I urge all of you to become familiar with.

This program allows students in grades nine through 12 to earn both a high school diploma and either a two-year degree or transferrable college credits within four years, tuition free.

These innovative high school programs expand student opportunities for educational success and streamline pathways into the UNC system.

We also reviewed the new Choose North Carolina Application Redirect Pilot launched by UNC Chapel Hill in partnership with five other UNC institutions.

This program gives highly-qualified applicants, who may not be admitted to Chapel Hill, the option to redirect their application to other participating institutions.

This collaborative effort will reduce barriers, increase access, and help keep talented students in North Carolina universities.

Finally, and as you heard earlier, the committee addressed system-wide teacher preparation in early literacy.

A recent review found that while progress is being made, seven programs still need improvement.

These institutions will receive support and be monitored over the next 90 days with full accomplishment compliance by December the 1st, at the latest.

I want to thank President Hans and Chair Murphy and former Chair Ramsey for their leadership on this issue.

Thank you.

Thank you, Madam Chair, that concludes my report.

- Thank you, Mr. Hutchins.

The report of the Committee on University Personnel, Mrs. Coward.

- Thank you, Madam Chair.

We'll now hear from the Chair of the Staff Assembly, Shayna Hill, from the University of North Carolina at Chapel Hill.

- I'm short.

[audience laughs] I'll lean.

Good morning, Chair Murphy, governors, chancellors, President Hans, System Office leaders, and UNC family.

I thought I would start my remarks with an excerpt from President Erskine Bowles when he addressed the first meeting of the UNC System Staff Assembly on October 16, 2006.

And I quote.

"I began visiting campuses a year ago.

As I met with students, faculty, and staff, it never occurred to me that a staff assembly did not exist.

I took a leap of faith in you, the staff, when I signed the Staff Assembly Charter.

I want you to be candid with me and tell me what you think I need to be doing.

I want your advice and your support."

He went on to say, "With that, I can make better decisions.

I will listen to your input because I want to make well-informed decisions."

Thus, the UNC System Staff Assembly Charter was signed and the work began.

For almost two decades, this body has been doing the noble work of advising the UNC System's great leaders.

In 2010, we established the Erskine B. Bowles Staff Service Award to recognize staff employees whose accomplishments are consistent with the goals of the university and the university's public service mission.

In 2011, we established the Janet B. Royster Memorial Staff Scholarship Fund to promote staff development for permanent, full-time, non-faculty employees as well as to recognize and honor Janet's leadership and dedication to all UNC employees.

Every year we raise money for the scholarship through the UNC Staff Assembly Chancellor's Cup Golf Tournament, and as of today, we are just $30,000 from our preferred endowment goal of $250,000.

That's huge.

Additionally, since the scholarship was established, we have awarded 168 scholarships totalling over $114,000.

This year, the Chancellor's Cup Golf Tournament has a record 30 teams and will be played at Finley Golf Course on the campus of UNC Chapel Hill on Wednesday, September 25th.

I have helped facilitate this event for many years, and it is a testament to what we can do for UNC System staff while creating community and unifying our efforts towards a common goal.

I would like to take a moment to thank you for your generous enthusiasm and support, and I look forward to seeing you at the tournament.

Continuing the work, in 2015, I promise you, this isn't three hours long, [audience laughs] the UNC Systems Staff Assembly established the Thomas W. Ross Visionary Leader Award to celebrate a member of the UNC Staff Assembly who has proven to be an exemplary leader and one who inspires a shared vision on their campus and throughout the whole of the UNC Staff Assembly.

In addition to these efforts, throughout the years, Staff Assembly delegates have served on working groups, committees, searches, and provided valuable feedback to and collaborated with UNC System leaders.

Delegates have been doing this both on their campus levels and at the System level.

An example of an incredibly successful collaboration between staff and leadership took place at UNC Chapel Hill in 2018.

A staff member from the Department of Finance and Operations, Alan Moran, a cabinet maker and a delegate of the UNC Employee Forum, brought the idea of an apprenticeship program to an Employee Forum meeting where then-Chancellor Folt had come to speak to the body.

I remember this well, as I was chairing that particular meeting.

The goal was to address recruiting, training, and retaining a competitive workforce.

After this original introduction and lots of behind-the-scenes work from several staff members, the program was launched two years later with a collaborative team that included Facilities Services, the Office of Human Resources, and the Finance and Operations Service team.

Today, the program is a registered apprenticeship with the U.S. Department of Labor, and is currently partnering with Alamance Community College and Cape Fear Community College.

Because there was an avenue of communication provided to staff through UNC Chapel Hill's Employee Forum, a UNC Chapel Hill staff member was able to sit down with UNC leadership and present a bold, new idea to help solve a critical staffing issue that now benefits not only UNC Chapel Hill but the North Carolina Community College Center System and the State of North Carolina as well.

I believe this is what President Erskine Bowles meant when he said to staff, "I want you to be candid with me and tell me what you think I need to be doing.

I want your advice and your support."

So I challenge you here today, make it a point to talk to staff, listen to their great ideas.

They have literally thousands of collective years of experience running the 17 individual campuses.

They run everything from lawn mowers to IT systems, and they can help solve any new challenge that arises in these complex times.

If you need a venue to meet with the UNC System delegates, please consider this an open invitation, and I will set up a special session so you can meet with these incredible staff employees.

And with that, I conclude my remarks.

- Madam Chair, may I take one minute to just thank everyone who will take my call.

I'm going to be calling a few of you with regard to the Staff Assembly's Chancellor's Cup Golf Tournament donation in the upcoming weeks.

So again, thank you ahead of time.

[audience laughs] - Thank you for that, thank you for those comments, for your enthusiasm and all that you do.

- Thank you.

- I will my echo my partner over there, Governor Coward, and ask Meredith to send the donation around one more time.

We have 10 of 24 governors, and I know several of you have said, "I need to do this," so we're gonna send it out one more time.

And please ask those other 14 to make a donation.

And I'll also say that, as Miss Hill pointed out, one of the things I like about playing in this tournament is that I get to meet so many of the staff members.

Each school has a little tent on the holes and do something kind of fun.

And it's a great way to meet other parts of our great system here.

So I encourage you, if you have time, to come out on the 25th and enjoy the festivities, even if you're not playing.

And finally, I'd like to say to President Hans, I understand you have drafted a ringer from the Presidential Scholars.

So we will have eyes on you to make sure that, like my friend used to say, that "Everybody's dead when Peter's got the lead," so we're gonna watch how you tabulate your scores.

[audience laughs] So anyway, look forward to the 25th.

And please, if you haven't made a contribution, please do so in the next couple weeks.

You heard the Delta AR, we helped them get over their level of endowment, and getting to the permanent endowment, it would be nice if we could close that gap or get very, very close between now and September.

So thank you, Chair Murphy, and thank you, Governor Coward.

- Thank you for that.

We'll try to have 100% participation from the board.

We won't call anybody out, but we're gonna be working the phones.

[audience laughs] Mr. Mitchell, the report on governance.

- Thank you, Chair Murphy.

The Committee on University Governance held a virtual meeting on September 5th and an in-person meeting yesterday.

At the virtual meeting, the committee approved for submission to the full board the Annual Committee Report that highlights the work this committee undertook from July 1, 2023 to June 30, 2024.

The committee then approved the Annual Resolution on Security Clearance Requirements, which was also just approved by the full board and the Consent Agenda.

This resolution is required by the Department of Defense so the UNC System can maintain a facility security clearance in the performance of classified documents.

In connection with this facility clearance, certain senior management officials must obtain an individual security clearance.

This resolution is required to exempt members of the Board of Governors and senior officers of the UNC System from the requirement to obtain individual security clearances.

Next, the committee made an appointment to the North Carolina A&T State University Board of Trustees.

The appointment which is before the full board now is to appoint Sean Suggs to fill a partial term ending June 30, 2025.

Biographical information is in BoardEffect.

On behalf of the Committee on University Governance, I move to approve the nomination of Sean Suggs to the North Carolina A&T Board of Trustees to fill a partial term that ends on June 30, 2025.

- Members of the board, you've heard the motion.

Is there any discussion or debate?

All in favor, please indicate by saying aye.

- [Members] Aye.

- Any opposed?

- Next, the committee voted to approve the nomination of Susan Strong to the Western Carolina University Board of Trustees to fill a partial term ending June 30, 2025.

Biographical information is in BoardEffect.

On behalf of the Committee on University Governance, I move to approve the nomination of Susan Strong to the Western Carolina Board of Trustees to fill a partial term ending June 30, 2025.

- Members of the board, you've heard the motion.

Any discussion?

All in favor, please indicate by saying aye.

- [Members] Aye.

- Any opposed?

- Finally, the committee voted to approve the nomination of William "Billy" Pizer to the North Carolina School of Science and Mathematics Board of Trustees to fill a partial term ending on June 30, 2025.

Biographical information is in BoardEffect.

On behalf of the Committee on University Governance, I move to approve the nomination of William "Billy" Pizer to the North Carolina School of Science and Mathematics Board of Trustees to fill a partial term vacancy ending on June 30, 2025.

- Members of the board, you've heard the motion.

Any discussion or debate?

All in favor, please indicate by saying aye.

- [Members] Aye.

- Any opposed?

- The last item on the agenda for the virtual meeting was an update from Senior Vice President and General Counsel Andrew Tripp on the Annual Report on Free Speech and Free Expression within the University of North Carolina.

The report finds that constituents and institutions are committed to promoting and protecting free speech and free expression, and that disruptions and interference at scheduled speaking or expressive events have been minimal over the past year.

At our meeting in person yesterday, the committee heard from Mr. Tripp again, this time reporting on the implementation of Section 300.8.5 of the UNC Policy Manual, Equality Within the University of North Carolina.

Leadership from each campus has certified their institution's compliance with Policy 300.8.5, reporting applicable position eliminations, position realignments, programmatic changes, as well as cost savings and reallocations of funds in order to foster institutional neutrality in support over all student success.

These written certifications are available on the UNC System webpage.

Now that the initial certifications have been received, the committee expects the board and campuses will need to monitor compliance annually, and more frequently as necessary.

The equality policy's reemphasis on student success is a great first step, and we will all continue to work to ensure that student success remains our number one priority.

Thank you, Madam Chair, that concludes my report.

- Thank you.

Well, now I'll call on Mr. Holton to provide the report of the Committee on Audit Risk Management and Compliance.

- Thank you, Chair Murphy.

The Committee on Audit Risk Management and Compliance met yesterday.

First, we welcomed three new members to our CARMAC team, Jennifer Myers, the System Office's new Chief Audit Officer, Dr. Maurice Ferrell, the System Office's Chief Information Officer, and our new Public Safety Director at the Samarcand Training Facility, Chief Andy Stephenson.

Next, Fred Sellers reported on the annual CARMAC report for academic year 2023-2024.

This informational report was approved by the committee and is made available to everyone through BoardEffect.

Fred Sellers and Carol Harris then briefed the committee on updates to the CARMAC Charter, which includes the Internal Audit charter.

The CARMAC Charter and the Internal Audit Charter were approved by the committee and were included in this morning's Consent Agenda.

Jennifer Myers presented the fiscal year '25 Annual Internal Audit Plan for the System Office.

To develop that plan, the Internal Audit team conducts a risk assessment as part of the process.

This annual risk assessment involves identifying and ranking risks based on management input, current industry and audit trends, prior audit results, financial activity, and other factors.

The results of the risk-based plan are consistent with the requirements of the Internal Audit Charter and Section IIA Standards.

The committee approved the FY25 Annual Internal Audit Plan and it too was included in today's consent agenda.

Carol Harris then presented the Fiscal Year '24 Annual Year End Report from Internal Audit.

That informational report is included in BoardEffect and includes the annual standards required by IIA.

One point about the System Office and Audit team I should make.

Last year, the Audit Office underwent its quality assurance review.

This review is conducted every five years by external and independent assessors and examines the Office's degree of compliance with internal audit standards.

I'm excited to report to the full board that our audit team received the highest rating possible on the very first pass, which I understand is highly unusual.

So congratulations to a team that's doing such a good job for everyone.

Next, Bryan Heckle, Director of our Enterprise Risk Management Program, presented the Enterprise Risk Management Annual Report.

He outlined the risk review and register process and summarized the top enterprise risks identified by the UNC System Office and by our constituent institutions.

The UNC System and our institutions have demonstrating meaningful growth and development in all enterprise risk management programs.

Each university now has dedicated staffing with ERM responsibilities, reflecting a commitment to identifying and managing risk effectively.

Additionally, the System Office has appointed a full-time employee to focus exclusively on ERM, further strengthening the oversight and strategic risk management across the system.

Also, universities within the system are increasingly leveraging technology and other resources to enhance their individual ERM efforts.

This embrace and adoption of advanced tools, analytics, and systems, underscores the proactive approach that the system and our schools are doing to identifying, assessing, and mitigating risks.

All of this contributes to a more resilient and forward thinking risk management framework.

Finally, Dr. Maurice Ferrell briefed the Committee on the implementation status of the key cybersecurity initiatives that were identified in 2022 and funded by the General Assembly.

The Committee received an update on the implementation actions in three specific areas.

First, an endpoint protection solution, that is endpoints being the user devices that access our systems, our networks, has been implemented at all of our UNC System schools.

Similarly, an event and log management solution will be implemented by all schools by December 2024.

And finally, Dr. Ferrell discussed the vendor risk management platform that has been established, which allows all schools to provide input and quickly view vendors that have met the university system security standards.

The current recommendations approved by this board continue to be strong enhancements for all our constituent institutions, and as a system, we are seeing the benefits of these enhancements and specifically how they improve the environment at many of our smaller institutions.

All schools are now better positioned to protect themselves from cybersecurity threats.

Chair Murphy, that concludes my report.

- Thank you, Mr. Holton.

A lot of information yesterday.

Very interesting.

Mr. Ford, the Committee on Strategic Initiatives.

- Thank you, Chair Murphy.

Yesterday the Committee on Strategic Initiatives met to discuss enrollment trends and their implications for policy, practice, and institutional finances.

In our time together, we discussed the structural forces shaping enrollment, including the demographic cliff stemming from lower US fertility rates and the improved labor market for young workers.

Both of these have reduced the number of prospective students interested in pursuing a post secondary education nationally and in North Carolina.

We also discussed how North Carolina, along with the rest of the US is facing a decline in immediate college going rates as questions about value of a degree and college affordability continue to shape behavior.

Amidst the alarming enrollment headlines, it's important to note that there are some victories to be celebrated here in North Carolina.

First, our UNC System enrollment growth rate has outpaced the growth rate of US public universities.

Additionally, although college going rates are declining in North Carolina, a larger share of students who do go to college are choosing to go to a UNC institution.

This win can be attributed to the great strides our system and institutions have made over the past decade, including holding tuition flat for the last 8 years, offering fixed tuition guarantee to our students and their families, and expanding state grant aid through the NC Next Scholarship.

In addition to the policy changes enacted by the General Assembly and this board, our institutions have continued to invest in best practices in college access student success strategies to stem the enrollment decline.

This includes investing in student success coaches, academic support programs, offering summer bridge programs to first time students, and redesigning student advising.

All this to say, while challenging times may lie ahead, there are actions we can take at the state, system, and institution level, that will help us weather that storm.

For example, we spoke about the opportunity for institutions to optimize academic program offerings to better align with student demand, and the need to review and redesign the credit transfer process to better serve community college students.

Yesterday's conversation, Madam Chair, was the starting point, and I anticipate, appreciate the active engagement by our committee members and chancellors.

Over the coming months, we will drill down further on enrollment trends among community college transfers, the gender gap in enrollment and student success, and the unique needs of adult learners to highlight key policy issues that we as a board should consider.

I look forward to the thoughtful, rigorous discussion that will be had in the months ahead on this timely and acute topic.

Thank you, Madam Chair.

This concludes my report.

- Thank you, Mr. Ford.

Mr. Holley, the report of the Committee on Historically Minority Serving Institutions.

- Good morning, Madam Chair.

- Good morning.

- Yesterday, the Committee on Historically Minority Serving Institutions discussed the tailored approach it's taken by each of our HMSIs to strengthen endowments and raise funds to support student success.

Madam chair, let me start by thanking Dr. Ivy Taylor and other staff at the System Office for all of their exceptional important work on behalf of HMSIs.

University Systems HMSIs have been tremendous stewards of our state's investment in higher education.

Each campus is deeply committed to providing educational opportunities and to supporting the needs of students both in and out of the classroom and farther to serving all of the people of North Carolina as we work together for an even brighter future for all.

To ensure the success of the next generation of talent, our HMSIs are doing noble and creative work to advance funding for the type of support initiatives that break down the barriers our students face and contemplating their, rather in completing their education.

By generating flexible dollars and increasing endowments, our campuses are able to champion and support student achievement in perpetuity.

We were honored to hear from Dr. Harry Williams, President and CEO of the Thurgood Marshall College Fund.

Dr. Williams gave a positive outlook of the philanthropic landscape concerning minority serving institutions.

Corporate partners are enthusiastic in their desire to support the talent coming out of these institutions and are keenly interested in workforce development programs and creating not just jobs, but career paths for talented young men and women.

Then our HMSI campus representatives participated in a round table discussion, specific strategies in fundraising and endowments, such as cultivating donors based on their unique interest and regional ties, identifying ways to address gap funding through creative partnerships, addressing emergency needs of students that happen outside the classroom but impact persistence, creating specific funding opportunities for adult learners and students from rural areas, and contemplating sustainability options for summer bridge and pipeline programs to support retention.

In closing, Madam Chair, I want to acknowledge the exceptional work done by our HMSI chancellors and their campus leadership teams.

Of course, I would be remiss if I did not acknowledge the good eye of our President and appointing these fine leaders at these respective institutions.

As I've said before, our HMSIs are critical to the mission and overall success of our great university system, and we honor their continued and renewed commitment to their constituencies.

I look forward to continuing this discussion and proposing further actions to meet the needs of our HMSIs in future meetings.

Madam Chair, that is the report.

- Thank you for that energetic report, Mr. Holley.

It was a good discussion yesterday.

- Governor Hutchens.

- Madam Chair, I wonder if I might have just a moment to make a comment.

We continue to hear about the decline in college admissions across the country.

Today, we've heard it from several of the reports and President Hans.

And one of the reasons that's generally given is high school graduates are starting to conclude that it's just not worth it.

They can't afford it.

They don't wanna go into debt.

I wanted to publicly commend this body, this board, this university system and their legislature in sponsoring so many programs designed to make college affordable and even free in North Carolina, as is our constitutional mission.

And I want to take a further minute to point out the success at one of our universities.

I was speaking with one of our chancellors yesterday and I won't... Yeah, I will mention her name, Chancellor Kelli Brown.

And she told me that their last graduating class, 48% graduated debt-free.

[board members applaud] What a testament to the good work that all of us are doing here.

Thank you, Madam.

- Thank you for sharing that.

Secretary Burris-Floyd, will you please read the closed session motion?

- [Harry] Madam Chair.

- [Wendy] Yes.

- [Harry] Before we go to closed session, can I have a moment of personal privilege?

- [Wendy] You may.

- Thank you.

You know, we're meeting on the week of 9/11 and I'm fortunate that I live in a community where Camp Lejeune and New River Air Station is located.

And I just wanna to tell a real quick story.

On that day, what 23 years ago, I guess it is now, a guy that worked for me, a retired Marine, when it happened, we were standing watching TV as this all unfolded.

And he had a son that worked at the Pentagon.

And, I may get emotional with this.

But anyway, we watched that and he kept telling me, he said, "I'm sure my son will give me a call to let me know what's going on."

And well, the day kinda continued and he never got a call.

And low and behold, his son was one of those who got killed at the Pentagon.

And so, again, this...

I'm sorry, I'm getting emotional, but that was a tough day.

So the reason I wanna bring that up is I just think we take so many things for granted.

And, you know, for us, we probably should thank our military and our first responders a whole lot more than we do.

[board members applauding] - Thank you for sharing that.

Don't ever apologize for showing emotion.

It shows that we're real.

And certainly, yesterday was a day of remembrance, but we should give thanks every day for the military, for this country, for first responders, absolutely.

- Members of the Board of Governors, I move that we go into closed session under Chapter 143 of the General Statutes, as stated in the publicly available written motion.

[indistinct chattering] - [Wendy] You heard the motion.

Is there a second?

[laughs] - [Wendy] Back in open session.

I'll call on Miss Coward for her report on personnel.

- The Committee received a presentation on recent employed turnover trends which demonstrated that after the rise and turnover during what was called the Great Resignation back in 2022-2023 and the subsequent implementation of sign-on and retention bonus programs, voluntary turnover rates have largely returned to pre-Covid levels over the past 12 to 18 months.

We are now seeing rates at 3.5% for faculty and 9% for staff.

Retirement rates have not fluctuated significantly over the past five years.

Overall, the university's voluntary turnover rates are trending better than benchmark data from the National College and University Personnel Association for Human Resources.

The Committee also voted to accept the 2023-2024 Committee on University Personnel Annual Report for submission to the full board.

The report is available in BoardEffects.

Thank you, Madam Chair.

That concludes my remarks.

- Thank you, Miss Coward.

That concludes our business for today.

The next scheduled meeting of the Board of Governors will be a one day meeting on Thursday, October 19th, and is designated as a special meeting of the Board of Governors and that means that you may join virtually or you may join in-person.

It's your choice.

Without objection, we stand adjourned.

Thank you.

Oh.

[gavel bangs]