Texas Public University Cost Study
April, 2005
Charge
• To develop a defensible and acceptable
“Instruction and Operations Formula”
Matrix Table
• Sub-Charge – Develop discipline and level
comparative analysis (i.e. show how much
it cost schools to provide different types and
levels of education)
April, 2005
Instruction & Operations Formula
Funding
• ~60% of State Appropriation to Universities
provided via I&O Formula
• Current Formula:
– Rate ($51.25) * Relative Weight * SCH
– Relative Weights & SCH by Level & Discipline
• Relative Weight are Average Statewide Cost per
Level & Discipline
– “Relative” to LD-UG Liberal Arts = 1.00
April, 2005
University Cost Study Methodology
• Devise an acceptable approach to a cost
study that would:
– Identify appropriate cost categories
– Reconcile to the Institutions’ Annual Financial
Reports
– Allocate costs in a fair and equitable manner
back to level and discipline
April, 2005
Five Cost Centers Plus Capital
Outlay (All Current Funds)
• Instruction (aka “Faculty Salaries”)
• Academic Support
• Institutional Support
• Student Services
• Research (aka “Departmental Operating
Expenses”)
• Annual, undepreciated Capital Expense for
each of the five cost centers
April, 2005
Faculty Salaries
• Every institution provided the following
information for each faculty member:
– Salary (100%) only for faculty actually teaching
(includes TA’s that are teaching)
– Teaching Load Credit*, or % of effort, each faculty
member receives for each course taught
– By Discipline and Level of Course (e.g. Undergraduate
Liberal Arts, Master’s in Science, Doctoral Fine Arts,
Special Professional in Law)
* TLC is Institution-Specific
April, 2005
Academic Support and
Capitalized Equipment
• Includes support services for Instruction &
Research, Academic Administration
(Deans), Libraries, Museums
• Reconciled to the institution’s AFR
• Allocated to Level & Discipline w/ results
of Faculty Salary Distribution
• Include undepreciated capital outlay
• Use all sources of funds
April, 2005
Institutional Support
• Includes Central Executive Management
(President), Fiscal Operations
• Reconciled to the institution’s AFR
• Allocated to Level using Headcount and to
Discipline using unweighted SCH
• Include undepreciated capital outlay
• Use all sources of funds
April, 2005
Student Services
• Includes Admissions and Registrars Office
• Reconciled to the institution’s AFR
• Allocated to Level using Headcount and to
Discipline using unweighted SCH
• Include undepreciated capital outlay
• Use all sources of funds
April, 2005
Departmental Operation Expense to
Include Research
• Includes Research Expenses, all elements of
Instruction NOT captured in Faculty
Salaries
• Charge to an I&O academic discipline using
the institution’s departmental budget
designations and institutional judgment
• Allocation is Institution Specific using
SCH, Faculty Salaries, or combination
April, 2005
Summary
Using these steps each institution will end up
with:
– All of their non-infrastructure E&G
related operating costs allocated to their
academic disciplines and levels of
instruction
– All their semester credit hours allocated
to their academic disciplines
April, 2005
Final Steps
• Sum the five cost centers by level and
discipline for all institutions
• Divide total costs allocated to each
academic discipline and level of instruction
by the corresponding SCH to get “Cost per
SCH”, which are the calculated weights for
the I&O matrix
April, 2005
Discipline and Level Analysis
• Allows for comparisons between
institutions
– Total Costs Basis
– Discipline Basis
– Level Basis
April, 2005