fin-overview-09-10 by jianglifang

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									UTB/TSC Financial
Overview
August 2009




The University of Texas at Brownsville and Texas Southmost College

 Prepared by the Office of the Vice President for Business Affairs
                                                 Table of Contents

       Legislative Session 2010 – 2011 .............................................................................3
       Revenues .................................................................................................................7
                  Fig. 1 – FY 2009 Budget Total Revenues $143.9M .........................8
                  Fig. 2 – FY 2010 Budget Total Revenues $156.7M .........................8
                  Fig. 3 – Revenue Per FTSE..............................................................9
                  Fig. 4 – State Appropriations per FTSE - FY 2009 ......................10
                  Fig. 5 – Tuition and Fees Fall 2009 .............................................10
                  Fig. 6 – Federal Sponsored Programs .........................................11
                  Fig. 7 – State/Local and Private Sponsored Programs .................11
       Expenditures by Function ...................................................................................13
                  Fig. 8 – FY 2009 Budget Total Expenditures $150.6M .................13
                  Fig. 9 – FY 2010 Budget Total Expenditures $162.3M .................13
                  Fig. 10 – Instruction /FTSE-FY 2009 Budget ...............................14
                  Fig. 11 – Instruction ......................................................................14
                  Fig. 12 – Academic Support...........................................................15
                  Fig. 13 – Academic Support $/FTSE .............................................15
                  Fig. 14 – Operation and Maintenance of Plant ............................16
                  Fig. 15 – Operation and Maintenance of Plant $/FTSE ................16
                  Fig. 16 – Institutional Support .......................................................17
                  Fig. 17 – Institutional Support $/FTSE..........................................17
                  Fig. 18 – Administrative Cost FY 2008 .........................................18
                  Fig. 19 – Student Services .............................................................18
                  Fig. 20 – Student Services $/FTSE ................................................19
                  Fig. 21 – Auxiliary Enterprises .....................................................19
                  Fig. 22 – Auxiliary $/FTSE ............................................................20
                  Fig. 23 – Research ........................................................................20
                  Fig. 24 – Research $/FTSE ............................................................21
                  Fig. 25 – Public Service ................................................................21
                  Fig. 26 – Public Service $/FTSE....................................................22
                  Fig. 27 – Scholarships ...................................................................22
                  Fig. 28 – Scholarships& Fellowships $/FTSE ...............................23
                  Fig. 29 – Depreciation ..................................................................23
       Expenditures by Natural Class ...........................................................................24
                  Fig. 30 – FY 2009 Budget Total Expenditures $150.6M ...............24
                  Fig. 31 – FY 2010 Budget Total Expenditures $162.3M ...............24
       Appendix A ...........................................................................................................25




UTB/TSC Financial Overview – August 2009                                                                                             Page 2
                            Legislative Session 2010 - 2011

Introduction
The University of Texas at Brownsville and Texas Southmost College (UTB/TSC) fully
implemented a unique partnership in 1992, pairing the existing community college with the
newly established university. The University of Texas at Brownsville provides instruction and
operations for UTB and TSC students and offers a wide range of courses from certificates to
associate, baccalaureate degrees to graduate courses and continuing education. In fall 2008,
UTB/TSC enrolled 17,189 students of which 6,195 were dual enrolled high school students and
10,994 were non-dual students.

In an effort to account for this unique partnership, financial statements have been consolidated in
this presentation for both institutions to provide a view consistent with all other UT institutions.
This consolidated view provides total revenues and expenditures for UTB/TSC that originate in
the individual Annual Financial Reports (AFRs) for UTB and TSC. Expenditures reported by
function follow the National Association of Colleges and University Business Officer
(NACUBO) guidelines and are grouped in the following categories: Instruction, Research, Public
Service, Academic Support, Student Services, Institutional Support, Operations and Maintenance
of Plant, Scholarships and Fellowships, Auxiliary Enterprises and Depreciation. Functional
categories of expenditures drive various accountability and performance measures and provide a
basis for benchmarking among universities.


Legislative Session for 2010-2011
The General Academic Formula Advisory Committee submitted its recommendation on April
2008 to provide state funding equal to 2002 funding levels for universities, the year tuition
deregulation began. The committee recommended an increase to Instruction and Operations
(I&O) of $478 million, which included an additional $78 million for Incentive Funding and $243
million for Infrastructure, for a total of $721 million.

On May 26, 2009, the Conference Committee approved a bill that included an increase of $312
million in General Revenue Funds. In addition, the bill included $134 million to be allocated
over the biennium for Incentive Funding, for a total of $446 million for Higher Education. The
Conference Committee SB1 bill is providing $275 million less in base funding as compared to
the original Formula Advisory Committee recommendation.

For UTB/TSC, it represents an increase to General Revenue of $3.5 million and Group
insurance of $1.3 million, for a total increase of $4.8 million over the biennium as compared
to the 2008-2009 Appropriation Act.


Impact to Funding for Instruction and Operations
The Formula Advisory Committee recommended an additional $478 million increase in I&O in
the 2008-2009 biennium; however, the Conference Committee for SB1 only added $232 million,
increasing the total 2010-2011 I&O formula to $3.577 billion. In addition, $134 million was set
aside to the Texas Higher Education Coordinating Board (THECB) for Incentive funding for the


UTB/TSC Financial Overview – August 2009                                                      Page 3
                            Legislative Session 2010 - 2011

2010-2011 biennium, for a total of $366 million increase over the previous biennium. This
represents a difference of $112 million from the Formula Advisory Committee recommendation.

This revised bill includes enrollment information for summer 2008, fall 2008, and certified
spring 2009 information. For UTB/TSC, semester credit hour production increased by 20,783 or
26.3 percent, from 79,029 for the previous base period to 99,812 in the current base period. Full
Time Student Equivalent (FTSE) increased by 430, or 15 percent, over fall 2007 from 2,825 to
3,255 in fall 2008.

For UTB, it represents an increase to the I&O formula of $4,705,530 for the 2010-2011
biennium as compared to the 2008-2009 biennium.


Impact to Funding for Infrastructure Support
The Formula Advisory Committee recommended an additional $243 million, increasing the total
from $726 million in the 2008-2009 biennium to $969 million for the 2010-2011 biennium.

Total Infrastructure Formula approved by the Conference Committee Report for SB1 totaled
$719 million, a decrease of $250 million from the Formula Advisory Committee
recommendation and a decrease of $6.7 million from the 2008-2009 biennium.

For the first time in UTB’s history, the student headcount has exceeded the 5,000 cap for small
school supplement funding. The Formula Advisory Committee recommended a phase out plan
that was approved by SB1, which reduced the $1.5 million biennium amount to $1.1 million, a
loss of $400,000 in funding.

Overall, SB1 represents an increase to UTB’s Infrastructure Formula of $249,606 for the
2010-2011 biennium, as compared to the 2008-2009 biennium. As indicated above, this bill
includes a phase out of the small school supplement to $1,120,200 for the biennium or
$560,100 per year as compared to $1,500,000 for the biennium or $750,000 per year.

Debt service is proposed at $13.1 million, which reflects an increase of $10,644 over the last
biennium. No additional TRB funding is included in this appropriation bill.

The Lease of Facilities paid to TSC remained at the 2008-2009 level. Article IX, Section 17.09
of the Conference Committee for SB1 states that The University of Texas System and Texas
Southmost College are directed by the Legislature to enter into binding arbitration no later than
March 31, 2010 for the purpose of determining the appropriate compensation for Texas
Southmost College for property leased by The University of Texas at Brownsville, out of funds
appropriated elsewhere in this Act. The University of Texas System shall pay any order or
judgment required by the arbitrator.




UTB/TSC Financial Overview – August 2009                                                   Page 4
                            Legislative Session 2010 - 2011

Impact to Funding for Special Items and Research Development Fund
Economic development and K-16 are recommended for funding at current levels. As a result of
reallocating $66.5 million from Institutional Enhancement and Excellence strategies, the
Conference Committee for SB1 has approved a $463,642 decrease in Institutional
Enhancement funds received by UTB over the 2010-2011 biennium, as compared to the
2008-2009 biennium.

Total state funding in research development funds was kept at the same levels, $80.9 million, as
compared to the 2008-2009 biennium. The Conference Committee for SB1 recommended a
decrease in funding for UTB of ($44,856) in Research Development fund for the 2010-2011
biennium as compared to the 2008-2009 biennium. This decrease is attributed to a decreasing
of the three year average for restricted research expenditures for our university. UTB restricted
research expenditures totaled $4.3 million in FY06 and decreased to $3.8 million for both FY07
and FY08.


Impact to Funding for Community Colleges
The Formula Advisory Committee recommended an additional $879 million to Community
Colleges formula funding including $100 million for performance funding. The Conference
Committee Report for SB1 provided a $140 million increase to general revenue funds for
community colleges and reallocated $110 million from performance funding into group
insurance to restore proportionality to 100 percent, for a grand total of $250 million. The
Conference Committee SB1 bill is providing $629 million less in base funding as compared to
the original Formula Advisory Committee recommendation.

Total community college contact hour production decreased by 341,014 or 8.6 percent, from
3,978,711 in the previous base period to 3,637,697 in the current base period. Academic contact
hours decreased by 295,211 and technical contact hours decreased by 45,803 from the previous
base period to the current 2008-2009 base period. This decrease in contact hours was primarily
as a result of more of our students being reported by UTB and the impact of SAP. TSC’s FTSE
decreased by 566 students, or 9 percent, over fall 2007 to 5,882 to 6,448 in fall 2008.

Texas Southmost College received $2.1 million for the 2010-2011 biennium out of the $15.2
million allocated to community colleges in formula hold harmless to ensure that no district is
funded below its 2008-2009 formula level.

For TSC, it represented no increase in funding from the previous biennium in general
revenue funds. In addition, with the redirecting of $110 million in contingent formula
funding to group insurance for community colleges, funding for TSC group insurance was
restored at 100 percent. This in essence eliminated proportionality into the insurance
calculations that had been proposed by the Governor and in both the House and Senate
versions.




UTB/TSC Financial Overview – August 2009                                                   Page 5
                            Legislative Session 2010 - 2011

Group Insurance
The Conference Committee for SB1 recommended an increase in funding of $1,207,888 for the
UTB Group Insurance as compared to the 2008-2009 biennium.

As stated above, proportionality for the TSC group insurance was restored to 100 percent
providing an increase of $99,039 as compared to the 2008-2009 biennium. The revised Senate
SB1 had applied proportionality to the TSC group insurance, which would have had a negative
impact of $2 million in comparison to the 2008-2009 appropriation bill. The revised House
Senate substitute for SB1 restored the proportionality to 100 percent and the Conference
Committee supported the House substitute for SB1 recommendation, which added $2.1 million
comparison to the revised Senate SB1.


Conclusion
Total appropriations for the UTB/TSC partnership budget are expected to total $93,346,302 for
the biennium, resulting in an increase of $4,793,915 or $2,396,957 per year. This represents a
5.2 percent increase for the biennium. General Revenue accounted for $3,486,988, or
$1,743,494 per year, of the total appropriations to UTB/TSC for operations. Conservative
spending at the state level with no additional spending for tuition revenue bonds or special items
resulted in budgeting focused primarily on formula funding. The dollars distributed through the
formulas include approximately $81 million in stimulus funding received by the State of Texas.
The UTB portion of stimulus funding is $540,000. Special reporting requirements must be
complied with, including two documents related to the American Recovery and Reinvestment
Act (ARRA) funds, prior to any funds being expended. The first report requires that each
institution of higher education that has received appropriations from ARRA must submit a plan
to the Legislative Budget Board (LBB) and the Governor providing details on the intended use of
the funds. The second report requires each institution to certify to the LBB, the Governor, and
the Comptroller of Public Accounts how these funds or the programs receiving ARRA funds will
comply will all applicable laws, rules, regulations, and any other relevant guidance




UTB/TSC Financial Overview – August 2009                                                    Page 6
                                           Revenues

Overview
For FY 2010, budgeted revenues for UTB/TSC total $156.7 million, which represent an 8.9
percent increase, or $12.8 million, as compared to the total budgeted revenues for FY 2009 of
$143.9 million. For FY 2010, budgeted expenditures for UTB/TSC total $162.3 million as
compared to $150.6 million in FY 2009. This represents a 7.8 percent increase or $11.7 million.

The goals addressed by the FY 2010 budget are:

       Manage on-going impact of SAP,
       Continue expansion of scholarship programs,
       Strengthen enrollment and retention initiatives,
       Maintain competitive faculty and staff salaries,
       Support research infrastructure,
       Fund operations of new buildings.

UT Brownsville has developed a balanced budget for FY 2010, which has eliminated the use of
$3.3 million of fund balance to support operations during 2009. The FY 2010 budget will allow
the University to maintain some momentum to expand and grow the educational opportunities
for current and future students and for our community.

Enrollment increases have flattened in FY 2009 and we are expecting little or no increases in FY
2010. Departments will be encouraged to develop recruitment and retention initiatives that may
support and or increase enrollment. A revenue sharing pilot program that was developed in FY
2009 will be continued in FY 2010. The program will allocate revenues in excess of budget to
those departments whose initiatives result in increases in enrollment. In FY 2009, $127,000 in
revenues was distributed to instructional departments through the enrollment incentive program
for over 2,000 semester credit hours generated over the target.


Revenues
Budgeted consolidated revenues totaled $156.7 million for FY 2010, which represents an 8.9
percent increase, or $12.8 million, over total revenue for FY 2009 of $143.9 million in budgeted
revenues. Figures 1 and 2 illustrate revenues generated by category for each fiscal year and are
provided to facilitate a comparison of both years.




UTB/TSC Financial Overview – August 2009                                                  Page 7
                                                 Revenues

In Figure 1, the largest revenue source
for FY 2009 was state appropriations at
$52.5 million, or 36 percent of the total.
The second largest category of revenue
was net tuition and fees at $35.3
million. These two revenue sources
represented 61 percent of the total
budget. Federal sponsored programs
totaled $38.5 million, or 22 percent,
with Pell Grants making up most of this
category at $23 million. Local
sponsored revenues totaled $7.1 million
or 5 percent of the total budget. The
remaining 12 percent of budgeted
revenues totaling $17.6 million was
comprised of Ad Valorem Taxes,
Auxiliary, Net Investment Income and
other revenues.
                                                           Source: UTB/TSC Consolidated Financial Statements-Budget




                                                             As presented in Figure 2, FY 2010 State
                                                             Appropriations continues to be the largest
                                                             revenue source for UTB/TSC at $57.1
                                                             million with net Tuition and Fees being the
                                                             second largest source at $37.2 million.
                                                             Combined, both categories account for 60
                                                             percent of total budget, slightly less than in
                                                             FY 2009. Federal Sponsored programs
                                                             totals $33.8 million, of which $24 million is
                                                             attributed to Pell Grants. Local Sponsored
                                                             Programs is up slightly at 6 percent of the
                                                             total budget, or $9.4 million. The remaining
                                                             12 percent of budgeted revenues is
                                                             comprised of Ad Valorem Taxes, Auxiliary,
                                                             Net Investment Income and other revenues,
                                                             which is consistent with what was budgeted
                                                             in FY 2009.

                                                             As compared to FY 2009, State
                                                             Appropriations and net Tuition and Fees
Source: UTB/TSC Consolidated Financial Statements-Budget     grew by $6.5 million. Sponsored programs
                                                             increased by $4.7 million, and the
                                                             remaining revenues increased by $1.6
                                                             million.

UTB/TSC Financial Overview – August 2009                                                                     Page 8
                                                 Revenues

For FY 2010, UTB/TSC consolidated revenues total $16,937 per full time student equivalent
(FTSE) as compared to $16,096 in FY2009, an increase of $841, or 5.2 percent. Over the past
six years revenues per FTSE have increased by 11 percent or about 2 percent per year.




Source: UTB/TSC Consolidated Financial Statements-Budget; FTSE THECB Accountability Report

A more detailed explanation of revenue sources follows and includes: State Appropriations,
Tuition and Fees, Federal Sponsored Programs, Ad Valorem Taxes, State and Local Sponsored
Programs, Auxiliary/ Investment Income and Other.

State Appropriations
State Appropriations are funded by the Legislature from the General Revenue fund. This
category also includes Higher Education Assistance Funds (HEAF), state paid benefits and
special item appropriations. Even though FY 2010 is the beginning of a new biennium, the
percentage of the budget funded by state appropriations has stayed the same over the last two
fiscal years.

For FY 2010, general revenue state appropriations per FTSE totaled $3,571, as compared to
$3,429 in FY 2009. This represents a $142 increase, or 4 percent more per student. Over the last
three years, state appropriations have increased by $185 per student. Although we experienced
an increase in per student revenue, UTB/TSC continues to lag behind our peers and ranks second
to last among UT System Institutions in this category. As demonstrated in Figure 4, UTB/TSC
state appropriation per FTSE is equal to 51 percent of UT Permian Basin, 62 percent of UT
Dallas, 63 percent of UT Austin and 91 percent of UT Pan American.




UTB/TSC Financial Overview – August 2009                                                     Page 9
                                                 Revenues




Source: 2008-2009 GAA General Revenue net of TRB and Non Operating Special Items; FTSE THECB Accountability Report



Tuition and Fees
Tuition and Fees are comprised of mandatory and incidental fees charged to students.
Mandatory fees are charged to the entire student population and incidental fees are program
specific. As illustrated in Figure 5, in the fall 2009 UTB/TSC ranks second in the UT System and
11th in the state among institutions with the lowest total academic cost.




Source: Tuition Survey House Committee on Education July 2009; UTA UTT-UT System Tuition Proposals AY2008-2009

In FY 2010, tuition and fee revenue increased by 5.7 percent, or $1.9 million, over FY 2009. The
increase in tuition and fee revenue is primarily due to rate increases plus a marginal growth in
semester credit hour production.




UTB/TSC Financial Overview – August 2009                                                                   Page 10
                                                   Revenues

Federal Sponsored Programs
This category is comprised of funding
received from the Federal Government
including amounts for services
performed on grants, contracts and
agreements. In FY 2010, federal
revenue increased by 7.6 percent, or
$2.4 million over FY 2009. Revenue
increases are attributable to increases
in Pell and Federal grant awards.
                                                   Source: UTB/TSC Consolidated Financial Statement - Budget

Pell grant awards are projected to increase by $1 million and federal grant awards, including
those from the Department of Education, National Institutes of Health and National Science
Foundation are expected to increase by $1.4 million.

Ad Valorem Taxes
Texas Southmost College has the authority to assess and collect taxes for Operations and
Maintenance (M&O) and Interest and Sinking Fund (I&S), on properties located within the
college taxing district. In the consolidated view of the financial statements, tax revenue is
included; however, the revenues are not used to fund partnership operating expenditures.
Instead, tax revenue represents a major revenue source for the community college district and is
used to fund district operations, provide for maintenance of TSC owned facilities, fund debt
service payments and provide scholarships to UTB/TSC students. In FY 2010, revenue from
taxes increased by 14 percent or $1.9 million over FY 2009 for a grand total of $15.6 million.
The FY 2010 estimate is based on the assumptions that the tax rate will remain the same as in
2009 at $0.110614 cents per $100 valuation for M&O. In addition, the calculation includes a 3
percent increase in assessed valuation and a 90 percent collection rate (down from 94 percent last
year). The state of the economy has negatively impacted the growth in our tax base and the
collection rate of outstanding taxes. We continue to monitor these two areas to determine
possible impact to FY 2010 and subsequent fiscal years.

                                                           State/Local and Private Sponsored
                                                           Programs
                                                           This category includes funding from local and
                                                           state     government,     private     agencies,
                                                           organizations or individuals for services
                                                           performed on grants, contracts and agreements.
                                                           In FY 2010, revenues in this category
                                                           increased by 16.7 percent or $2.3 million over
                                                           FY 2009. Revenue increases are due to a $1.5
                                                           million increase in Texas Grant, a $0.7 million
                                                           increase in the THECB Incentive program and
                                                           a $0.1 million increase in operating costs for
Source: UTB/TSC Consolidated Financial Statement           the Math and Science Academy.

UTB/TSC Financial Overview – August 2009                                                                       Page 11
                                           Revenues

Auxiliary, Net Investment Income & Other
Auxiliary revenues are derived from charges for services provided to students, faculty or staff.
Net Investment Income is derived from interest and dividend income. Revenues, reported as
Other include Net Sales of Educational Activities and Miscellaneous Income. In FY 2010,
revenues in this category decreased by 8 percent, or $0.3 million, over FY 2009. The decline in
this category is primarily as a result of conservative estimates in net investment income due to
the current economic climate and low interest rates available in current markets. Revenue
changes are due to a decrease of $0.6 million in Net Investment Income, a $0.2 million increase
in Net Sales driven by activities within Workforce Training and Continuing Education and a $0.1
million increase in other operating revenues.

Conclusion
Operations in FY 2010 will be funded by an additional $12.8 million in new revenues as
compared to FY 2009. New tuition and fee revenues totaling $1.9 million will fund additional
operations in the library, athletics and generally across the campus. A phase 2 increase of $2 per
semester credit hour in the athletic fee will expand programs in that department. A $1 per
semester credit hour increase in the library fee will fund expanded hours for the new library. A
$5 per semester credit hour increase in designated tuition will fund in part salary increases for
faculty and staff. For UTB/TSC, tuition and fees represents 24 percent of total funding as
compared to 25 percent for all UT campuses. Increases in state appropriations totaling $4.6
million will complete the funding required for salary increases and will sustain new faculty lines
added in the current fiscal year. The percentage of funding in this category is 36 percent as
compared to 24 percent for all campuses. The additional revenues will also provide funding for
the maintenance of new facilities that will become available for use at the start of the fall 2009
semester. Increases in Pell funding will add $1 million in additional scholarships for students.
The change is due primarily to a 13 percent increase in the annual maximum Pell award to
$5,350 for fall 2009, as compared to $4,731 in the previous fall. Federal grants and contracts
account for 22 percent of total funding, which is comparable to the percentage of funding in this
category for all UT campuses.

Finally, tax revenues will add $1.9 million in funding as a result of a modest increase in the tax
base of 3 percent. The tax rate for maintenance and operations is expected to remain the same as
in the current year. Tax revenue is a unique revenue stream for UTB/TSC and therefore does not
have a UT System benchmark. Local sponsored programs will provide $2.3 million in new
revenues from an increase in the amount available for Texas Grants and the Governor’s Incentive
Funding while Net Investment and Other Income is expected to decline by $300,000. The
decrease in this category is due to a decline in interest rates available for cash that is maintained
in various investment accounts.




UTB/TSC Financial Overview – August 2009                                                      Page 12
                                   Expenditures by Function

Expenditures
UTB/TSC Total Expenditures, which include
scholarships and depreciation, equal $162.3
million for FY 2010, a 7.8 percent increase or
$11.7 million, as compared to the total
expenditures for FY 2009 of $150.6 million.

As shown in Fig. 8, Instruction and Academic
Support expenditures total $56.1 and represent
37 percent of total expenditures.         Plant
expenditures account for $25.7 million or 17
percent of all expenditures. The third largest
category of expenditures is institutional
support at $15.9 million or 11 percent of
operating expenditures. Student Services,
Auxiliary Enterprises and Public Service
equal 16 percent of total expenditures at $23.2
million. Non Operating expenditures represent
17 percent of the budget with $20.2 million
for scholarships and $5.9 million for
depreciation. The remaining 2 percent of
operating expenditures are related to research              Source: UTB/TSC Consolidated Financial Statements-Budget
activities.

                                                             As presented in Figure 9, major expenditure
                                                             categories include Instruction and Academic
                                                             Support, which represents 36 percent of the
                                                             total budget at $57.6 million.           Plant
                                                             expenditures are the second largest at $30.2
                                                             million, or 19 percent. Institutional Support
                                                             costs account for 10 percent of operating
                                                             expenditures at $16.9 million. Expenditures
                                                             for Student Services and Auxiliary
                                                             Enterprises total $21.5 million or 13 percent.
                                                             Research expenditures total $3.5 million and
                                                             represent     2    percent    of    operating
                                                             expenditures. The remaining 2 percent of
                                                             operating expenditures are in category of
                                                             public service. Non Operating Expenditures
                                                             account for 18 percent, with $22.7 million
                                                             budgeted for scholarships and $6.2 million
                                                             allocated to depreciation.

 Source: UTB/TSC Consolidated Financial Statements-Budget    A more detailed view of expenditures in each
                                                             category follows.

UTB/TSC Financial Overview – August 2009                                                                   Page 13
                                    Expenditures by Function

Instruction
The instruction category includes expenditures for all activities that are part of the institution’s
instructional programs. The expenditures include salaries, wages, and all other costs related to
the teaching function plus the operating costs of all instructional departments. For FY 2010,
expenditures in this category total $42 million, a 2.4 percent increase over FY 2009, or 26
percent of all expenditures.
Based on UT campuses budget summaries and FTSE for Fiscal Year 2009, UTB/TSC budgeted
$4,492 dollars per FTSE, which was the lowest of all of the campuses and well below the UT
system average of $6,967. The graph below illustrates a comparison of budgeted
Instruction/FTSE across all UT institutions for Fiscal Year 2009.




Source: UT System Operating Budget Summaries; FTSE-THECB Accountability Report; FTSE -UTB/TSC CF Statements

Expenses for instruction have increased by 38 percent to $41.3 million in FY 2008, as compared
to $29.9 million in FY 2004. The July 2009 version of the UT System Accountability Report
may be used to benchmark costs with other UT campuses. In FY 2008, UT System Academic
Institutions spent on average 30 percent of their total budget for instruction, as compared to 27
percent at UTB/TSC.




Source: UTB/TSC Consolidated Financial Statements


UTB/TSC Financial Overview – August 2009                                                                Page 14
                                   Expenditures by Function

Academic Support
The academic support category includes expenses incurred to provide support services for the
institution’s primary missions: instruction, research, and public service. Academic support
makes up 10 percent of total expenditures for FY 2010.

From FY 2004 to FY 2008, expenditures in this category increased by 64 percent and
represented 8 percent of total expenditures as compared to 7 percent for all UT campuses.




Source: UTB/TSC Consolidated Financial Statements 2004-2008



When taken together, instruction and academic support totaled 34 percent of all expenditures as
compared to 37 percent for total UT campuses. Figure 13 provides a summary of expenditures
per FTSE for all of the UT campuses. UTB/TSC ranks fifth of all of the UT schools for
expenditures in this category.




Source: FY 2009 UT System Operating Budget Summaries; FTSE UT System Accountability Report 2008-2009




UTB/TSC Financial Overview – August 2009                                                               Page 15
                                   Expenditures by Function

Operation and Maintenance of Plant
The operation and maintenance of plant category includes all expenses for the administration,
supervision, operation, maintenance, preservation, and protection of the institution’s physical
plant. In FY 2010, we added budget to accommodate five new facilities that will be available for
use including: the center for childhood studies, library, classroom building, arts center and
kinesiology building. For FY 2010, Operation and Maintenance of Plant expenditures total 19
percent of all expenditures.

From FY 2004 to FY 2008, expenditures in this category have increased by 87 percent. This
increase is due to the addition of over 261,000 square feet of space to the campus.




Source: UTB/TSC Consolidated Financial Statements 2004-2008


The percentage of O&M of Plant expenditures for FY 2008 for UT campuses totaled 8 percent
as compared to 16 percent at UTB/TSC.




Source: FY 2009 UT System Operating Budget Summaries; FTSE UT System Accountability Report 2008-2009




UTB/TSC Financial Overview – August 2009                                                               Page 16
                                   Expenditures by Function

Institutional Support
The institutional support category includes expenses for central and executive level activities that
include management and long range planning for the entire institution, fiscal operations, support
services for faculty and staff, and other campus wide expenditures. For Fiscal Year 2010, 10
percent of all expenditures, or $16.9 million, have been allocated for institutional support.

For the last five years, institutional support has increased by only 18 percent. In FY 2008, 9
percent of total expenditures fell in this category as compared to 7 percent for all UT campuses.




Source: UTB/TSC Consolidated Financial Statements 2004-2008



Because of a large number of part-time students on our campus, the expenditures per FTSE
appear to be higher than the amounts reported by other campuses. In the category of institutional
support, UTB/TSC ranks fourth.




Source: FY 2009 UT System Operating Budget Summaries; FTSE UT System Accountability Report 2008-2009




UTB/TSC Financial Overview – August 2009                                                               Page 17
                                   Expenditures by Function

Administrative Cost Measure
Another common measure of institutional efficiency is the amount of institutional support
expenditures calculated as a percentage of total budget. This measure is known as the
administrative cost measure and is calculated annually for all UT campuses. UTB/TSC has
systematically worked to reduce administrative overhead and redundancies to reallocate much
needed resources to other areas of great need. The UTB/TSC administrative cost measure in FY
2008 was reported at 7.9 percent, down from 10.4 percent in FY 2004. The UTB/TSC
administrative cost measure for FY 2008 was the third lowest among all UT system institutions.
UT Brownsville ranks 7th lowest in administrative cost measure of all thirty five universities
reported by the Coordinating Board for FY 2008.




Source: THECB Accountability System FY 2008

Student Services
The student services category includes, but is not limited to, expenses incurred in the offices of
admissions, financial aid, Dean of Students and the registrar and activities with the primary
purpose of contributing to students’ emotional and physical well-being and intellectual, cultural,
and social development outside the context of the formal instruction program. For FY 2010, 7
percent or $11.3 million have been budgeted in this category.

For the period of FY 2004 to FY 2008, student services have increased by 52 percent.




Source: UTB/TSC Consolidated Financial Statements 2004-2008

UTB/TSC Financial Overview – August 2009                                                   Page 18
                                   Expenditures by Function

In FY 2008, 6 percent of total expenditures were allocated to this category as compared to 4
percent of all expenditures for UT schools. For the same year, UTB/TSC ranks fourth in the
total expenditures per FTSE.




Source: FY 2009 UT System Operating Budget Summaries; FTSE: UT System Accountability Report

Auxiliary Enterprises
The auxiliary enterprise category includes all expenses relating to the operation of auxiliary
enterprises, such as bookstores, dormitories, and child care. For FY 2010, $10.2 million, or 6
percent of total expenditures, have been budgeted as auxiliary enterprises.

In contrast, in the last five years 5 percent of total expenditures were budgeted in this category.
This number compares to 9 percent of total expenditures for all UT campuses. Over the same
period, auxiliary expenditures have increased by 66 percent.




Source: UTB/TSC Consolidated Financial Statements 2004-2008

UTB/TSC offered housing to students for the first time in the spring of Fiscal Year 2004. In the
first 18 months of operation, housing was at about 80 percent occupancy. Since then, occupancy
levels have increased to 100 percent. A reconfiguration of rooms has expanded the capacity of

UTB/TSC Financial Overview – August 2009                                                      Page 19
                                   Expenditures by Function

housing. As a result, a major portion of the increase in this category is due to the maturity of the
housing program on the UTB/TSC campus. Overall, UTB/TSC ranks last in the total amount of
auxiliary dollars generated by each FTSE.




Source: FY 2009 UT System Operating Budget Summaries; FTSE: UT System Accountability Report


Research
The research category includes all expenses for activities specifically organized to produce
research, whether commissioned by an agency external to the institution or separately budgeted
by an organizational unit within the institution. The FY2010 budget under this category for
UTB/TSC represents $3.5 million, or 2 percent of the overall budget. On key change occurred in
FY 2009 when funds were allocated to create and/or expand research infrastructure through the
leadership provided by a Vice President for Research.

Over the past five years, research expenditures have increased by 100 percent. In FY 2008, they
accounted for 3 percent of total expenditures in comparison to 16 percent of all UT campuses.
Expenditures in this category are the basis for funding received from the Research Development
Fund and also impact accountability measures reported by UT System.




Source: UTB/TSC Consolidated Financial Statements 2004-2008

UTB/TSC Financial Overview – August 2009                                                      Page 20
                                   Expenditures by Function


In FY 2008, UTB/TSC reported 7,581 square feet of space dedicated to research and generated
$781 research expenditures per square footage of space, the most by any UT campus. When
comparing the amount of research dollars generated by each FTSE, UTB/TSC ranks second to
last, only ahead of UT Tyler.




Source: FY 2009 UT System Operating Budget Summaries; FTSE: UT System Accountability Report


Public Service
The public service category includes expenditures for activities established primarily to provide
non-instructional services beneficial to individuals and groups external to the institution. For FY
2010, $3.7 million, or 2.2 percent of total expenditures, have been allocated in this category.




Source: UTB/TSC Consolidated Financial Statements 2004-2008

Expenditures in this category have doubled over the last five years and represented 5 percent of
the total in FY 2008, as compared to 3 percent at all UT Campuses. Even with this growth,
UTB/TSC ranks second to last only ahead of UT Tyler. Additional activities in Civic
Engagement, Workforce and Continuing Education, Teacher Training and High School Outreach
grants have led to the increase in expenditures in this category.

UTB/TSC Financial Overview – August 2009                                                      Page 21
                                   Expenditures by Function




Source: FY 2009 UT System Operating Budget Summaries; FTSE: UT System Accountability Report


Scholarships and Fellowships
The scholarships and fellowships category includes expenses for scholarships and fellowships—
from restricted or unrestricted funds—in the form of grants to students, resulting from selection
by the institution or from an entitlement program. The FY2010 budget under this category for
UTB/TSC represents $22.7 million, or 14.0 percent, of the overall budget. In comparison to
FY2009, the budget for Scholarships and Fellowships totaled $20.2 million, or 13.4 percent.

Over the last five years, expenditures have grown by 76 percent and in FY 2008 this category
represented 17 percent of total expenditures.




Source: UTB/TSC Consolidated Financial Statements 2004-2008

This compares to 7 percent by all UT Schools. The driving force for this increase is the 62
percent increase in enrollment from 10,604 in fall 2003 to 17,215 in fall 2007. Approximately
70 percent of all students at UTB/TSC receive needs based financial aid. It is no surprise that
given the amount of need in our region, UTB ranks second in the total dollars expended for
scholarships only slightly behind UTPA.


UTB/TSC Financial Overview – August 2009                                                      Page 22
                                   Expenditures by Function




Source: FY 2009 UT System Operating Budget Summaries; FTSE: UT System Accountability Report


Depreciation
Depreciation is the decrease in the value of any type of tangible asset, such as plant, equipment
and vehicles, over a period of time resulting from use, wear and tear. Depreciation is calculated
in accordance with the institution’s capitalization and depreciation policies. The FY2010
Depreciation amount for UTB/TSC represents $6.2 million, or 3.8 percent of the overall budget.
In comparison to FY2009, the budget for Depreciation totaled $5.9 million, or 3.9 percent.

As new facilities are constructed, the amount of depreciation will continue to increase. Over the
last five years, depreciation has increased by 79 percent as depreciable assets have increased
from $125.4 to $192.5, or 53.5 percent, with capitalized equipment doubling over the same
period. This is significant because equipment has shorter estimated useful lives that result in
larger amounts of depreciation per year. In FY 2008, depreciation totaled 5 percent of all
expenditures compared to 7 percent for all UT schools.




Source: UTB/TSC Consolidated Financial Statements 2004-2008




UTB/TSC Financial Overview – August 2009                                                      Page 23
                               Expenditures by Natural Class

Expenditures by Natural Class
Expenditure summaries by type of
expense provide another view of how
dollars are spent on the UTB/TSC
campus. In FY 2009, over 51 percent
of total expenditures were spent on
salaries    and    related   benefits.
Maintenance        and      Operating
expenditures accounted for 17
percent while scholarship totaled 13
percent.      Utilities, travel and
equipment totaled 6 percent of all
expenditures with debt service and
depreciation making up the balance at
13 percent.



                                                    Source: UTB/TSC Consolidated Financial Statements-Budget




                                                           For FY 2010, $82.5 million or 51 percent has
                                                           been allocated for salaries and the required
                                                           benefits.     Maintenance    and    Operating
                                                           Expenditures total $27.7 million, or 17
                                                           percent of the total, while scholarships equal
                                                           $21.9 million, or 13 percent of the total.
                                                           Utilities, travel and equipment account for
                                                           $9.6 million or 6 percent of the total amount
                                                           of expenditures. Finally, debt service and
                                                           depreciation make up the balance at $20.6, or
                                                           13 percent.

                                                           The percentage for each type of expenditure is
                                                           the same in FY 2010 as in FY 2009. Minimal
                                                           increases in expenditures due to limited
                                                           resources resulted in the same percentage
                                                           allocation by type of expense.

                                                           The charts found in Appendix A provide a
Source: UTB/TSC Consolidated Financial Statements-Budget   more detailed view for each type of
                                                           expenditure over a three year period.



UTB/TSC Financial Overview – August 2009                                                                       Page 24
                                                Appendix A

 Salaries and Wages

                                               Part-time       Faculty       Admin       Classified
                                                Wages           Wages       Salaries      Salaries
 Fiscal Year 2006                              $6,238,830     $25,205,710   $5,432,747   $17,680,249
 Fiscal Year 2007                              $6,872,945     $26,276,683   $5,983,017   $19,600,008
 Fiscal Year 2008                              $7,164,676     $29,336,045   $6,513,710   $20,680,331
 Percentage Change 2006-2008                          15%            16%          20%            17%




Source: UT System Expenditure Transparency Report 2006-2008


Increases in faculty wages resulted from the addition of 19.85 full-time equivalent positions
added in unrestricted funds from FY 2006 to FY2008. Increases in expenditures, for both
summer ($336,234) and part time faculty ($483,695), across the academic departments have also
added to the total increase.

For the period of fall 2004 to fall 2008, the number of FTE students per faculty has dropped from
18 to 16. This means that the course schedule for each year has added sections with fewer
students per class. In addition, the number of small classes has increased from 157 to 185;
however, the percent of small classes in relation to the total of all classes has declined from 9.4
percent to 7.1 percent. Regardless, UTB has the highest percentage of semester credit hour
generation in small classes at 3.8 percent in 2008 as compared to the UT System average of .7
percent.

Increases in Administrative and Professional Salaries resulted from the addition of 10.06 FTE
positions from FY 2006 to FY 2008 plus merit increases added during this time frame. The
following positions make up the increase in FTEs: Special Assistant to the VPAA, Assistant
Dean of P-16, Assistant Dean of the School of Business, three directors for the Math and Science
Academy, Director of Business Incubator, Chief Information Officer, Associate VP for
Marketing and Communication and a Soccer Coach.

Increases in Classified Staff salaries resulted from the addition of 33.16 FTE positions from FY
2006 to FY 2008 plus merit and market increases.


UTB/TSC Financial Overview – August 2009                                                       Page 25
                                                Appendix A

 Employee Benefits

                                                Group          FICA and
                                                                             Retirement     Other
                                              Insurance        Medicare
 Fiscal Year 2006                              $5,269,567        3,717,254    $3,127,703    $231,525
 Fiscal Year 2007                              $5,866,776      $4,050,779     $3,422,016    $230,043
 Fiscal Year 2008                              $6,400,865      $4,313,183     $3,883,217    $136,221
 Percentage Change 2006-2008                         21%              16%           24%        -41%




Source: UT System Expenditure Transparency Report 2006-2008

Benefit costs have increased along with the salary and wage increases noted above. Group
insurance rate changes during this time frame have also added to the additional costs. Over the
three years reported, group insurance rates have increased by 12.5 percent.

 Professional Fees, Repairs, Rentals and Capital Items

                                             Professional     Repairs and    Rentals and
                                                                                           Capital
                                                 Fees         Maintenance      Leases
 Fiscal Year 2006                              $1,849,782      $1,149,199     $1,853,181   $        -
 Fiscal Year 2007                              $2,155,277      $1,101,458     $1,958,195   $        -
 Fiscal Year 2008                              $2,699,888      $1,603,817     $2,018,286   $1,927,443
 Percentage Change 2006-2008                         46%              40%             9%




Source: UT System Expenditure Transparency Report 2006-2008


UTB/TSC Financial Overview – August 2009                                                        Page 26
                                                Appendix A

Increases to contracted services expenditures are primarily as a result of Architect / Engineering
services for the Education and Business Complex as well as the Science and Tech Learning
Center.

Increases to Repairs and Maintenance are primarily as a result of computer software
expenditures in Academic Computing and Information systems; and building, grounds and
facilities expenditures primarily in HEAF, M1 Building Renovations, Campus Police, Building
Maintenance and Fort Brown Memorial Center.

 Travel

                                                                In-state                       Out-state
                                               In-state          Meals,        Out-state        Meals,
                                            Transportation     Lodging,      Transportation    Lodging,
                                                                 Other                          Other
 Fiscal Year 2006                                 $240,654        $471,625        $266,523      $252,170
 Fiscal Year 2007                                 $258,168        $566,668        $266,234      $250,061
 Fiscal Year 2008                                 $245,561        $454,725        $314,490      $291,351
 Percentage Change 2006-2008                           2%              -4%            18%            16%




Source: UT System Expenditure Transparency Report 2006-2008

Out-of-state travel has grown at rates greater than in-state travel. Some of the increases are due
to faculty traveling for conferences and or presentations. The remainder of the increases are due
to staff traveling out of the state for various reasons.

 Materials and Supplies

                                                                                              Software
                                                              Computer        Computer
                                            Consumable                                          and
                                                               Equip.          Equip.
                                             Supplies                                         Training
                                                              Expensed       Inventoried
                                                                                              Materials
 Fiscal Year 2006                             $1,569,467      $1,924,533      $1,534,718      $ 707,386
 Fiscal Year 2007                             $1,957,281      $1,143,826      $1,217,023      $1,031,383
 Fiscal Year 2008                             $1,870,361      $1,517,685      $1,441,960      $ 724,142
 Percentage Change 2006-2008                        19%            -21%              -6%              2%


UTB/TSC Financial Overview – August 2009                                                            Page 27
                                                Appendix A




Source: UT System Expenditure Transparency Report 2006-2008


Increases to consumable supplies expenditures are primarily in restricted funds ($207,237) such
as Crest and Elementary Statistics plus increases in food expenditures in restricted funds
($50,758).


 Utilities & Communications

                                                                          Other
                                            Electricity       Water                   Communications
                                                                         Utilities
 Fiscal Year 2006                            $3,255,384       $497,322   $244,540          $1,441,114
 Fiscal Year 2007                            $2,767,138       $409,276   $295,187          $1,572,318
 Fiscal Year 2008                            $3,151,518       $417,501   $352,951          $1,685,629
 Percentage Change 2006-2008                        -3%          -16%           44%              17%




Source: UT System Expenditure Transparency Report 2006-2008

Increases to other utilities expenditures are primarily as a result of gas and garbage disposal
increases to campus. The increase to communication expenditures are primarily as a result of
online services in both the Library Fee and Distance Education and more library subscriptions.




UTB/TSC Financial Overview – August 2009                                                         Page 28
                                                Appendix A

 Maintenance and Operating Expenses

                                                                                             Other
                                            Printing          Bad Debt      Miscellaneous
                                                                                            Charges
 Fiscal Year 2006                             $371,752         $101,414          $304,515    $329,122
 Fiscal Year 2007                             $397,075         $106,919          $480,495    $301,443
 Fiscal Year 2008                             $370,596         $130,784          $252,434    $357,255
 Percentage Change 2006-2008                       0%              29%              -17%           9%




Source: UT System Expenditure Transparency Report 2006-2008




 Maintenance and Operating Expenses

                                             Training,                                        Non
                                                               Insurance      Contracted
                                               Dues                                         Employee
                                                               Premiums        Services
                                             & Awards                                        Travel
 Fiscal Year 2006                              $699,499          $585,197       $830,653      $432,025
 Fiscal Year 2007                              $642,560          $679,356       $925,011      $487,859
 Fiscal Year 2008                             $1,312,544         $628,290      $1,120,503     $561,572
 Percentage Change 2006-2008                        88%               7%             35%          30%




Source: UT System Expenditure Transparency Report 2006-2008




UTB/TSC Financial Overview – August 2009                                                          Page 29
                                                Appendix A


The increase is primary as a result of an increase to awards in restricted funds in Early Childhood
($376,817) and Transition to teaching grants ($49,700); membership dues in student affairs
($46,789) and training experiences expenditures in Becker CPA ($34,350) and Print card
($10,000).

Increases to contracted services are primarily as a result of the renewal of the campus contract
with Blackboard paid by Academic Computing


 Maintenance and Operating Expenses

                                                Cleaning                     Credit Card    Indirect
                                                              Advertising
                                                Services                     Purchases       Costs
 Fiscal Year 2006                                 $902,301     $1,242,444     $2,326,731   $1,343,953
 Fiscal Year 2007                                 $841,329     $ 872,175      $2,289,855   $1,369,074
 Fiscal Year 2008                                 $834,417     $ 825,871      $2,134,996   $1,201,332
 Percentage Change 2006-2008                           -8%          -34%             -8%         -11%




Source: UT System Expenditure Transparency Report 2006-2008

 Scholarships, Waivers and Depreciation

                                              Scholarships      Waivers       Depreciation
 Fiscal Year 2006                              $28,727,542      $4,230,275      $5,128,750
 Fiscal Year 2007                              $30,009,417      $6,040,862      $5,402,825
 Fiscal Year 2008                              $32,062,607      $8,443,548      $5,645,804
 Percentage Change 2006-2008                          12%            100%              10%




UTB/TSC Financial Overview – August 2009                                                         Page 30
                                                Appendix A




Source: UT System Expenditure Transparency Report 2006-2008


Increases in scholarships are due to increases in enrollment and changes in the amount of Pell
awards. The increases in waivers are primarily due to the number of dual enrollment students
who receive free tuition and fees.




UTB/TSC Financial Overview – August 2009                                               Page 31

								
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