FY 2004 Operating Budget by osq14347

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									            Presented to
    The University of Texas System
          Board of Regents



FY 2004 Operating Budget


             August 2003
              The University of Texas System
             2004 Operating Budget Overview




Office of the Controller   August 2003         1
                                        Total System-Wide Budgeted Expenditures FY 94 - FY 04
                       $ in billions

                           10
                             9                                                                   7.80
                             8
                             7
                             6                                      4.88
                             5         3.86
                             4
                             3
                             2
                             1
                             0
                                   94         95     96   97   98   99      00    01   02   03   04

                                 Budgeted Expenditures
                                    – $7.8 billion
                                                   • $554 million more than FY 03
                                                   • 7.6% more than FY 03
                                                   • 59.8% more than FY 99
                                          – Does not include deregulated tuition Increase as
                                            Approved in HB 3015
Office of the Controller                                            August 2003                         2
                   Where The Money Comes From

                                                  Hospitals, Clinics
                                                   & Professional
                                                         Fees
                                                 $2.5 billion - 31.9%
                            Gifts and Others                                                  State
                           $243 million - 3.2%                                          Appropriations
                                                                                               (GR)
                                                                                       $1.6 billion - 20.4%
          Educational
           Activities
       $164 million - 2.1%

         Investment
           Income
      $494 million - 6.4%
          Tuition & Fees
                                                                               Federal, State,
        $756 million - 9.8%
                                                                              Local & Private
                                       Auxiliary                                 Sponsored
                                      Enterprises                                Programs
                                   $251 million - 3.2%                       $1.8 billion - 23.0%

                                                    $7.8 Billion
Office of the Controller                                       August 2003                                    3
                  Proposed Budgeted Revenue Increases as
                      Percent of Functional Categories



                            Tuition & Fees
                                                                                                 13.5%
             Sponsored Programs
                                                                                         10.9%
                Education Activities
                                                                                  5.2%
                                                                                                 19.6%
Hospitals, Clinics & Prof. Fees

              Auxiliary Enterprises
                                                                           1.5%
                      Gifts and Others
                                                                                           11.7%
                 Investment Income
                                                               -3.9%
              State Appropriations                             -6.0%
                                             -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15




 Office of the Controller                                    August 2003                           4
                 Budgeted Revenues - Academic
                             All Funds (in millions)

                              Fiscal Year        Fiscal Year     Dollar & Percent
                                 2003               2004             Increase
U. T. Arlington                   $ 260.1             $ 266.7     $ 6.6       2.6%
U. T. Austin                       1,275.9             1,330.0     54.1       4.2%
U. T. Brownsville                     85.9                89.4      3.5       4.0%
U. T. Dallas                         182.6              185.7       3.1      1.7 %
U. T. El Paso                        209.4              221.5      12.1       5.8%
U. T. Pan American                   154.1              172.7      18.6      12.1%
U. T. Permian Basin                   27.2                31.0      3.8      14.0%
U. T. San Antonio                    210.3              240.9      30.6      14.5%
U. T. Tyler                           44.8                46.7      1.9       4.2%
            Total Academic        $2,450.3            $2,584.6   $134.3       5.5%

Office of the Controller                August 2003                                 5
                           Budgeted Revenues – Health
                                  All Funds (in millions)


                                             Fiscal    Fiscal           Dollar & Percent
                                            Year 2003 Year 2004             Increase

U. T. Southwestern Dallas                    $ 746.6         $ 830.9     $ 84.3    11.3%
U. T. MB Galveston                            1,106.4         1,210.5       50.1    4.3%
U. T. HSC Houston                               558.8          563.8         5.0    0.9%
U. T. HSC San Antonio                           431.5          441.3         9.8    2.3%
U. T. MD Anderson                             1,517.3         1,752.0     234.7    15.5%
U. T. Health Center Tyler                       120.5          130.0         9.6    8.0%
                             Total Health    $4,535.1        $4,928.6    $393.5     8.7%



Office of the Controller                       August 2003                                 6
                           Where The Money Goes
                                    By Expenditure Type



                                                                  Personnel Costs
                                                                 $4.5 billion - 58.1%
                                                                       [-2.1%]




               Maintenance,
                                                                              Debt Service
               Operations &
                                                                            $263 million - 3.4%
                 Equipment
                                                                                 [-0.1%]
             $2.8 billion - 36.2%
                   [+2.1%]
                                                            Capital Outlay
                                                          $184 million - 2.3%
                                                               [+0.1%]

                                      $7.8 Billion
Office of the Controller                    August 2003                                           7
                           Where The Money Goes
                                                     By Function

                                                   Auxiliary
                            Scholarships &                                Debt Service
                                                  Enterprises
                              Fellowships                               $271 million - 3.5%
                                               $324 million - 4.1%
                           $226 million - 2.9%
                                                                                      Instruction
            Operation &                                                           $1.9 billion - 24.0%
          Maintenance of
               Plant
         $584 million - 7.5%

       Student Services                                                               Academic Support
      $126 million - 1.6%                                                             $350 million - 4.5%

                  Institutional
                    Support
               $645 million - 8.3%
                                                                                             Research
                                                                                        $1.3 billion - 17.1%
                              Hospitals & Clinics
                                                              Public Service
                              $1.9 billion - 24.3%
                                                            $173 million - 2.2%

                                                 $7.8 Billion
Office of the Controller                                  August 2003                                          8
                   Proposed Budgeted Expenditure Increases
                      as Percent of Functional Categories




                                   Instruction                                4.7%
                         Academic Support                           3.3%
                                     Research                                                                 11.5%
                                Public Service                                                             10.8%
                        Hospitals & Clinics                                                              10.1%
                     Institutional Support                1.5%
                              Student Services                                         5.9%
Operations & Maintenance of Plant                                                                                    13.8%
        Scholarships & Fellowships                                                                              12.2%
                     Auxiliary Enterprises               0.9%
                                  Debt Service                                              6.7%

                                                 0   1    2     3   4     5        6    7     8    9   10 11 12 13 14 15



   Office of the Controller                                          August 2003                                           9
       Budgeted Expenditures - Academic
                             All Funds (in millions)

                              Fiscal Year        Fiscal Year     Dollar & Percent
                                 2003               2004             Increase
U. T. Arlington                   $ 256.1             $ 266.7    $ 10.6       4.2%
U. T. Austin                       1,374.2             1,444.6      70.4      5.1%
U. T. Brownsville                     86.4                89.5       3.1      3.6%
U. T. Dallas                         190.9              192.9        2.0      1.1%
U. T. El Paso                        205.9              217.7       11.8      5.7%
U. T. Pan American                   158.2              178.8       20.6     13.0%
U. T. Permian Basin                   27.3                31.1       3.8     13.8%
U. T. San Antonio                    205.2              243.6       38.4     18.7%
U. T. Tyler                           44.7                46.5       1.8      4.1%
            Total Academic        $2,548.9            $2,711.4    $162.5      6.4%

Office of the Controller                August 2003                                 10
           Budgeted Expenditures – Health
                               All Funds (in millions)

                                           Fiscal            Fiscal     Dollar & Percent
                                          Year 2003         Year 2004       Increase
U. T. Southwestern Dallas                  $ 751.8           $ 844.8    $ 93.0     12.4%
U. T. MB Galveston                          1,159.5           1,210.9      51.4     4.4%

U. T. HSC Houston                             565.1             566.7       1.6     0.3%

U. T. HSC San Antonio                         428.8             438.2       9.4     2.2%

U. T. MD Anderson                           1,549.0           1,780.9    231.9     15.0%

U. T. Health Center Tyler                     119.9             129.3       9.4     7.9%

                           Total Health    $4,574.1          $4,970.8   $396.7      8.7%



Office of the Controller                      August 2003                              11
                           The University of Texas
                            System Administration


Office of the Controller             August 2003     12
                           What is the Function of
                           System Administration?
                Special fiduciary responsibility for PUF & other
                endowments and management of university lands

                Carry out Board policies

                Collaborate with Board on strategic planning

                Target new opportunities

                Serve as consultants to our components

                Provide wide range of centralized, cost-effective and
                value-added services

                Accountability and Performance Benchmarking
Office of the Controller                   August 2003                  13
                     Value-Added Services
        Academic Affairs
                Distance Education                         Learning Assessment
                PK-16 Program                              Accountability
                Program Approval

        Business Affairs
                Facilities Planning & Construction         Real Estate Services
                Workers’ Compensation Insurance            Finance Services
                Employee Group Insurance
        Health Affairs
                TX Medical & Dental Appl. Service          Accountability
                Joint Admission Medical Program
                Program Approval
Office of the Controller                     August 2003                          14
               Value-Added Services (continued)
        Legal Services
                 Professional Medical Liability Benefit Plan
                 Claims & Bankruptcy Recovery
                 Intellectual Property
        Audit Services
                 Institution Compliance Program
                 Financial and Management Audits
        Governmental Relations
        Fund Raising
                 Foundation Grants to Support Every Child Every Advantage
                 Charter School
        Community Relations
        Public Affairs

Office of the Controller                      August 2003                   15
                           General Administration
                             Budget Highlights
        FY 2004 General Administration budget reduced
        $1.75 million or 5.7%
        Received grant from the Houston Endowment as
        well as other external, non-governmental support
        November 2002 - flexible hiring freeze in place
                 On-going reviews of staffing efficiencies and additional
                 cost savings opportunities continue
                 553.4 FTEs in FY 2004 for System Administration




Office of the Controller                 August 2003                        16
                           System Administration
                             Budget Highlights
                 Of that total, 320.5 FTEs are in self-support departments
                 and charge fees to support themselves such as the
                 Office of Facilities Planning and Construction and the
                 Claims and Bankruptcy Section of the Office of General
                 Counsel
                 Remaining 232.9 FTEs make up “General
                 Administration” and are funded directly from State
                 Appropriations (either General Revenue or Available
                 University Fund)
                 16.1 FTEs below HB 1 Limitation

• Reduced 26.9 FTEs from the FY 2003 General
  Administration budget
Office of the Controller                 August 2003                     17
                                          Budgeted FTEs
                                           1999 – 2004
                                                                                    564.2    553.4
          600                                                          534.0
          550                                       475.8
                             421.1       441.7
          500
          450
          400                                                                      304.4
                                                                      287.9                  320.5
          350                                        251.5
                            216.3        229.9
          300
          250
          200
                                                                                   259.8
          150                                                        246.1
          100              204.8        211.8        224.3                                   232.9
           50
            0
                           1999        2000       2001               2002       2003        2004
                                    General Administration (AUF/GR)            All Other

Office of the Controller                               August 2003                                   18
     General Administration - Budgeted
     & Actual Expenditures 1999 - 2004
 ($ in millions)

  34
                                                                                                        30.7
  31                                                                                                                        28.9
                                                        28.2                                             1.0
                                                                                 27.1
  28                                                     0.8                                                                0.8
                                  24.3                                           0.9
  25
                                  0.8
  22           19.5
                                                                                            30.9                     31.6
                                                                                                        29.6
  19           0.9                                      27.4        27.1                                                    27.9
                                                                                26.2
                                  23.5      22.4
  16
              18.6         18.6
  13

  10
                   1999*           2000                     2001                      2002                  2003             2004
                                          AUF                             GR                           Actual
                                         * Adjusted for RAHC funding - transferred to components beginning FY 2000

Office of the Controller                                                August 2003                                                 19
     General Administration Budgeted Expenditures
    Compared To System-wide Budgeted Expenditures

      $ in billions            4.88                   5.43                  5.81                  6.38                7.25      7.80
          0.50
          0.45                                                       0.48
                            0.44                0.45
 P        0.40                                                                              0.42                 0.42
 e        0.35                                                                                                               0.37

 r        0.30
 c        0.25
 e        0.20
 n        0.15
 t        0.10
          0.05
          0.00
                           1999              2000                  2001                  2002                 2003           2004

                                   General Administration funded from State Appropriations (AUF or General Revenue)

Office of the Controller                                                   August 2003                                                 20
                             System Administration
                               Budget Highlights

                                       Services Added Since 1999
                                                                    System-wide Compliance         $ 249,956
                                                           System Administration Compliance        $ 176,500
                                                            UT TeleCampus (enhancements)           $ 155,205
                                                        Educational System Alignment (K-16)        $ 225,650

                                              Office of the Vice Chancellor for Administration     $ 298,025

                           Office of the Vice Chancellor for Research & Technology Transfer        $ 232,500

                                                               Office of Community Relations       $ 353,250
                                                                   Office of Federal Relations     $ 972,119

                                                                        Office of Public Affairs   $ 310,098

                           Office of Finance (addition of liaison responsibilities with UTIMCO)    $ 289,087

                                                                  Employee Advisory Council        $ 31,350

                                                       UT System Police (enhanced security)        $ 261,109




Office of the Controller                                            August 2003                                21
           Administrative Cost Measures
            How Do Systems Compare?
• One measure of administrative cost is institutional support
  expenses (System-wide) as a percent of total operating
  expenses

• Institutional support expenses are those for:
           – Central executive activities             –Fiscal Operations
             concerned with long range                –Safety
             planning                                 –Security
           – Legal Services                           –Space Management
           – Information Resources
           – Human Resources
           – Governing Board



Office of the Controller                    August 2003                    22
           Administrative Cost Measures
            How Do Systems Compare?
                           Administrative Cost Measures
                                     FY 2002
                 University of Houston System             15.2%
              Texas State University System               14.2%
     University of North Texas System                     9.7%
                           Texas A&M System               8.9%
                                U. T. System              8.0%
                           Texas Tech System              7.0%
                                    Average               8.8%



Office of the Controller                    August 2003           23
                                  Fall Enrollment

                           Fall Enrollment

180,000
170,000
160,000
150,000                                                                 Percentage Change From 1999
140,000                                                         15
                    1999       2000     2001   2002             12
                                                                    9
                                                                    6
                                                                    3
                                                                    0
                                                                        1999    2000     2001     2002



Office of the Controller                              August 2003                                        24
            Annual CIP Total Project Cost

              Annual CIP Total Project Cost
5                            ($ in billions)


4
3
2
1                                                                               Percentage Change From 1999
0
                                                                          175
       1999           2000   2001          2002   2003   2004             150
                                                                          125
                                                                          100
                                                                           75
                                                                           50
                                                                           25
                                                                            0
                                                                                1999   2000   2001   2002   2003   2004



Office of the Controller                                        August 2003                                               26
              Total Research Expenditures

               Total Research Expenditures
                                  ($ in millions)


1.8
1.6
1.3
1.1                                                                                      Percentage Change From 1999
0.8
                                                                                   100
           1999            2000        2001         2002   2003   2004
                                                                                    80
                                                                                    60
                                                                                    40
                                                                                    20
                                                                                     0
                                                                                         1999   2000   2001   2002   2003   2004




Office of the Controller                                                 August 2003                                               27
                  PUF Distribution to the AUF

                   PUF Distribution to the AUF
                                  ($ in millions)


375
350
325
300
275                                                                                           Percentage Change From 1999
250
            1999           2000     2001            2002   2003   2004                 35
                                                                                       30
                                                                                       25
                                                                                       20
                                                                                       15
                                                                                       10
                                                                                        5
                                                                                        0
                                                                                            1999   2000   2001   2002   2003   2004




Office of the Controller                                                 August 2003                                                  28
                             Hospital Patient Days

                           Hospital Patient Days

440,000
420,000
400,000
380,000
                                                                            Percentage Change From 1999
360,000
                    1999          2000      2001   2002
                                                                    12
                                                                        9
                                                                        6
                                                                        3
                                                                        0
                                                                            1999     2000    2001     2002



Office of the Controller                                  August 2003                                        29
              Unsponsored Charity Care

                     Unsponsored Charity Care
                            ($ in millions)


 1,000

    900

    800

    700                                                                        Percentage Change From 1999
                   1999      2000             2001   2002
                                                                          36
                                                                          30
                                                                          24
                                                                          18
                                                                          12
                                                                           6
                                                                           0
                                                                               1999    2000      2001        2002



Office of the Controller                                    August 2003                                             30
              Total Budgeted Expenditures

              Total Budgeted Expenditures
                      System-wide
                              ($ in billions)


8
7
6
5
4                                                                                 Percentage Change From 1999
        1999           2000   2001          2002   2003   2004
                                                                           70
                                                                           60
                                                                           50
                                                                           40
                                                                           30
                                                                           20
                                                                           10
                                                                            0
                                                                                1999   2000   2001   2002   2003   2004


Office of the Controller                                         August 2003                                              25
                             General Administration
                                 Budget - 2004
                                                                                                                    General
                                                                                                        FTEs      Administration
          Fiscal Year 2003 Adjusted Budget                                                               259.8         $30,661,027
          Staff Changes                                                                                  (28.1)          (899,793)
          Telecampus Operating Expenses & Programs                                                                       (403,900)
          Academic Affairs Programs                                                                                      (213,050)
          Other Operating Expense Reductions                                                                             (767,630)
          Microsoft Agreement Reduction                                                                                 (1,133,919)
          Staff Benefits Increases                                                                                         622,041
          2% Merit Increase in January 2004 (excludes EVC & VC)                                                            186,506
          UT Austin Infrastructure Charge                                                                                  400,000
          Consultant – UTIMCO Performance Assessment*                                                                      150,000
          One time expenses – staff changes                                                                1.2             314,422
              Total Adjustments                                                                          (26.9)         (1,745,323)
          Fiscal Year 2004 Budget                                                                        232.9         $28,915,704
          *Total cost estimate is $300,000, remainder will be funded from other sources



Office of the Controller                                                                  August 2003                                 31
                           Library, Equipment,
                           Repair and Rehabilitation



Office of the Controller        August 2003            32
                           Library, Equipment, Repair &
                                   Rehabilitation


Academic Institutions                                  Total
U. T. Arlington                                      $ 2,980,000
U. T. Austin                                           4,145,000
U. T. Dallas                                          10,000,000
U. T. El Paso                                          2,995,000
U. T. Permian Basin                                    1,160,000
U. T. San Antonio                                      2,925,000
U. T. Tyler                                            1,195,000
           Total Academic                            $25,400,000
Office of the Controller               August 2003            33
                           Library, Equipment, Repair &
                                   Rehabilitation

Health Institutions                                    Total
U. T. Southwestern Dallas                            $ 2,100,000
U. T. MB Galveston                                     2,722,000
U. T. HSC Houston                                      2,290,000
U. T. HSC San Antonio                                  2,800,000
U. T. MD Anderson                                        403,000
U. T. Health Center Tyler                              2,285,000
   Total Health                                      $12,600,000

U. T. System Administration                          $ 2,000,000
Total LERR                                           $40,000,000
Office of the Controller               August 2003             34

								
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