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					University Budgeting


       Trudy Collins
  University Budget Officer
      March 23, 2005
      University Budgeting Topics
Purpose of the budget
NACUBO terms and definitions
  Fund types
  Program descriptions
  Education and General Fund revenue sources
Budget development focus: General Operating Fund
State Appropriation from the Legislature to the
Montana University System
Montana University System allocation model
MSU-Billings budget development
MSU-Billings budget management
       The Purpose of the Budget

To allocate scarce resources to accomplish the
University’s mission
For use as a planning tool
To provide fiscal boundaries
To provide accountability and stewardship of the
resources entrusted to the University
     NACUBO Terms and Definitions
                       Fund Types
Education and General
(General Operating Budget)
                                              Plant Fund
Designated                             Loan      6.6%
                          Restricted   0.6%
Auxiliary                  18.3%                               Ed and General
                                                                   48.4%
Restricted
Loan
                        Auxiliary
Endowment                11.4%

Plant Funds                               Designated            FY 2005
Agency                                      14.7%          All funds budget:
                                                                $65.4 M
     Education and General Fund
          FY 2005 Budget $31.8 M
Referred to as the General Operating budget or the
state appropriated budget
Used to record revenue and expenditures associated
with the university’s primary mission
Revenue sources: State appropriations, millage,
tuition, and interest
Expenditures are recorded by program in accordance
with NACUBO guidelines
              Designated Fund
            FY 2005 Budget $9.7 M
Financial activity associated with general operations
Internal designation by BOR or campus
Includes internal service centers which accumulate
costs to recharge to other funds (IT, printing, phones,
mail, maintenance, etc)
Includes self support or specialized activities which
collect a fee (resale, course fee, continuing education
tuition)
Includes State workstudy funds
               Auxiliary Fund
           FY 2005 Budget $7.5 M
Funds dedicated to on-campus services to students,
faculty, or staff for a fee
Fees may be applied to all students (health service
fee) or charged in exchange for goods and services
(bookstore)
Examples: residence halls, food services, bookstore,
health services, rental housing, parking, student
government
Excess revenue is generally pledged for repayment
of revenue bonds
              Restricted Fund
          FY 2005 Budget $12.0 M
Funds received and restricted for purposes specified
by external sources
Federal, State, and private grants and contracts
(example: Perkins grant)
Federal, State, and private student financial
assistance in the form of grants and scholarships
(example: Pell grants)
                 Plant Funds
           FY2005 Budget $4.3 M
Used for the acquisition of long term assets
(construction)
Record costs associated with the renewal or
replacement of campus properties (Computer fee,
equipment fee)
Account for debt service payments (loans and bonds)
Accumulate the historical costs of long-lived assets
    NACUBO Terms and Definitions
             Program Descriptions
Instruction – General academic activities: Faculty
salaries, instructional materials and equipment,
department support and supplies
Research – Organized faculty research
Public Service – Community services: KEMC, MCD
Academic Support – Support services for the
institution’s primary missions of instruction, research,
and public service: Academic deans, library, advising
center
       Program Descriptions (con’t)

Student Services – Administrative offices and also
activities contributing to students’ emotional and
physical well-being: Registrar, Financial Aid, Career
services, Athletics, Multicultural and Disability support
services
Institutional Support – Central executive-level
activities concerned with the manage-ment and
planning for the institution: Chancellor’s and Vice
Chancellors’ offices, fiscal operations, human
resource management
      Program Descriptions (con’t)
Operation and Maintenance of Plant – All
expenditures of general operating funds used to
provide services and maintenance related to grounds
and facilities: Custodial and grounds operations,
utilities, insurance, safety and security
Scholarships and Fellowships – Mandatory and
discretionary tuition waivers as approved by the
Board of Regents
    NACUBO Terms and Definitions
        Education and General Fund
            Revenue Sources
State General Fund – Individual income taxes,
corporation tax, coal and oil severance taxes and
other taxes
Millage – Property tax appropriated to MUS
Tuition and Fees– Students share of the cost of their
education
Interest Earnings and Other – Interest earned on
general operating funds; Federal Title IV
administrative fees and miscellaneous fees and fines
           Budget Development
      Focus: General Operating Budget

Fund type: Education and General
Use: Record revenue and expenditures associated
with the university’s primary mission of instruction,
research and public service
Revenue sources: State appropriations, millage,
tuition, and interest
Expenditures are recorded by program in
accordance with NACUBO guidelines
                  MSU-BILLINGS
         Projected Revenue by Source and
        Budgeted Expenditures by Program
Based on Percentage of the General Operating Budget
                 Fiscal Year 2005
             Montana State University-Billings
              Revenue Sources as a Percent of Total Revenue
                        Fiscal Years 1992 - 2005
90%
80%
70%76.6%
             71.1%
                     69.1%
60%                          64.3%                                                                           53.0%
                                     61.1%   61.9%                                           51.0% 49.9%
                                                     59.9%   59.7%   58.5%   57.9%
50%                                                                                  54.8%
                                                                                             48.0%   48.3%
40%                                                                                  43.4%                   45.8%
                                                             39.4%   40.4%   41.1%
                                     38.6%   37.7%   38.9%
30%                          35.4%
                     30.5%
             28.6%
20%23.1%
10%                                                  1.2%    0.9%    1.1%    1.0%    1.8%    1.0%    1.8%    1.2%
      0.3%   0.3%    0.4%    0.3%    0.3%    0.4%
 0%
   1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

                              State Support                   Tuition               Other
                                   MSU-BILLINGS
                              Expenditures by Program
                    Based on Percentage of Total Operating Budget
                               Fiscal Years 1992 - 2005
                                                                               Fee Waivers
100%


90%
                                                                               Plant O&M

80%

                                                                               Institutional Support
70%


60%
                                                                               Student Services

50%

                                                                               Academic Support
40%


30%                                                                            Public Service

20%

                                                                               Research
10%


 0%                                                                            Instruction
       1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
               MSU-Billings
     Budgeted Expenditure Categories

Personal Services
Operating
Capital Equipment/Library Books
Transfers
Fee Waivers
Enrollment Reserve
                       MSU-Billings
Budgeted Expenditure Categories
                                 T r a ns f e r s
                  C a pi t a l                    Fe e Wa i v e r s
                                      0. 6%
                    0. 7%                              5. 6%

E nr ol l me nt
  Reser ve
    4. 7%


Ope r a t i ng
                                                P e r s ona l
  22. 1%
                                                Se r v i c e s
                                                  66. 3%
      Montana University System
             State Appropriation
Legislature – Appropriates a Lump sum to the
Montana University System based on base year
expenditures, present law adjustments, estimated
enrollment growth, state pay plan and
Commissioner’s Office requests
Board of Regents – Delegates authority to the
Commissioner’s Office to allocate state dollars to
individual campuses per the cost of education
allocation formula
      Montana University System
    Cost of Education Allocation Model
Resident Enrollments - Student FTE projections
Institutional Characteristics
  Classification
  Disciplines/Programs
  Level of Instruction
  Size
Faculty Salaries – Targeted to peer institutions in
states with comparable ability to pay
Calculate Target cost of education by campus
Prorate target COE according to state resources
            Montana University System
                 Four-Year Campuses
            State Support per Resident FTE
       2001         2002          2003          2004        2005

6000


5000


4000


3000


2000


1000


  0
       Billings   Western   Missoula   Northern Bozeman   Tech
               Montana University System
                   Colleges of Technology
               State Support per Resident FTE
          2001         2002          2003          2004          2005

   4000

   3500

   3000

   2500

   2000

   1500

   1000

    500

      0
           Billings   Missoula      Butte       Helena    Great Falls

Helena and Great Falls are independent campuses and receive a higher allocations
    Budget Development Process
                Participants

Budget Officer
Chancellor’s Cabinet
Academic Deans and Directors
Administrative Directors
Program Managers
Faculty
Staff
Students
University Budget Committee
     Budget Development Process
Budget Officer
  Projects tuition revenue based on target
   enrollment and adds to the state support and misc
  Estimates increases in salary and benefit costs,
   fixed costs, limited inflationary increases and adds
   to base budget expenditures
  Determines new mandatory obligations and adds
   to base budget
  Determines gap between projected revenue and
   base budget expenditures
      Budget Development Process
Chancellor’s Cabinet
  Determines target for budget reductions
  Communicates targets with college deans and
   administrative directors and solicits input
  Requests information on new initiatives from
   college deans and administrative directors
  Reduces and reallocates department budgets
  Adds new initiatives to base budget to accomplish
   goals in the strategic plan
  Balances the budget
  Distributes spending authority to departments
     Budget Development Process
College Deans and Administrative Directors
  Work with faculty, program managers and staff to
   determine possible budget reductions to meet
   reduction targets
  Solicit faculty and staff input on new initiatives to
   advance college and unit strategic goals
  Recommend budget reductions and new initiatives
   to respective Vice Chancellor
    Budget Development Process
Students
  Review and comment on proposed tuition and fee
   increases
  Participate on University Budget Committee
  Participate on allocation committees for the
   Student Computer Fee and Equipment Fee
     Budget Development Process
University Budget Committee
  Maintains a membership representative of the
   campus community and meets semi-monthly
     Faculty
     Directors
     Students
     Staff
     Administrators (ex-officio)
  Reviews issues having budgetary impacts and
   makes recommendations to the Chancellor’s
   Cabinet
           Budget Management

Fiscal Managers
  Receive department budget report
  Expend salary line budgets as presented in the
   budget report.
  Expend operations budget for “reasonable and
   necessary” items
  Periodically review actual expenditures against
   budget
  Spend within authority
           Budget Management
College Deans and Administrative Directors
  Monitor budget to actual for areas of responsibility
  Transfer additional spending authority to
   departments where needed and available
  Request budgetary assistance from Vice
   Chancellor if needed
           Budget Management

Budget Officer
  Monitor revenue collections and enrollments
  Determine any excess or shortfall in revenue
  collections or budget availability
  Inform the Chancellor’s Cabinet of projected
  budget surplus or deficit
  Submit request for budget amendment to increase
  spending authority for excess tuition collections
  Submit documents to increase or decrease state
  appropriation based on actual resident enrollment
                             Revenue per FYFTE
                                                 State           Annual                        Total
                                   State           Suppo          Full-time      Total          Revenue
                                     Suppo          rt per         Tuition        Revenue          per
FY2005 Revenue generated by 1         rt per       Margi            and              per        Margina
                                      Base           nal           Mandato          Base             l
        FYFTE Student                 FTE           FTE            ry Fees          FTE           FTE

Resident Undergraduate           $ 3,261       $ 1,888       $    4,550       $ 7,811       $ 6,438

Nonresident Undergraduate              -             -           12,831        12,831        12,831

Resident Graduate                 3,261         1,888             5,259         8,520         7,147

Nonresident Graduate                   -             -           13,541        13,541        13,541

WUE                               3,155              -            6,461         9,616         6,461

COT Resident Undergraduate        2,343         1,888             3,319         5,662         5,207

COT Nonresident Undergraduate          -             -            6,361         6,361         6,361

COT WUE                           2,596                           4,621         7,217         4,621
           Budget Management

Chancellor‘s Cabinet
  Allocate additional one time spending authority
      Enhance current budgets
      Fund new initiatives to advance
       accomplishment of University strategic goals
  Rescind spending authority if necessary
  Ensure spending is within authority for the
   institution as a whole
        University Budgeting
            In Conclusion

University mission and strategic goals
                   +
           Available funding
                   =
 The difficult task of assigning finite
   resources to infinite possibilities

				
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