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					BUDGETING AT UNC PEMBROKE
•ENROLLMENT GROWTH FUNDING
•FY-2011 FACTS
•FY-2012 PLANNING



BOARD OF TRUSTEES MEETING
SEPTEMBER 23, 2010
    PURPOSE OF TODAY’S PRESENTATION

    Develop a better understanding of State
     budgeting and the associated processes

    Discuss UNCP budgeting in detail




UNC Pembroke              2                January 27, 2011
WHY DO WE BUDGET?
  The North Carolina Legislature and the State
   Constitution
  The “State Budget Act” as defined in General
   Statue 143C-1-1 establishes procedures for
   the following:
      1.   Enacting the State budget
      2.   Preparing the recommended State budget
      3.   Administering the State budget.


UNC Pembroke                  3                 January 27, 2011
 PREPARING THE RECOMMENDED STATE
 BUDGET
    North Carolina General Statute 143C-2-1
     provides that the Governor is Director of the
     Budget. As such, the Director has responsibility
     to prepare and recommend the State budget,
     and the Director’s powers extend to all
     agencies, institutions, departments, bureaus,
     boards and commissions of the State of North
     Carolina.

UNC Pembroke               4                 January 27, 2011
DELEGATION OF POWERS

   The Governor may -- and does -- delegate
    certain powers and authorities of the
    Governor as Director of the Budget to the
    Office of State Budget and Management
    (OSBM) (G.S. 143C-2-1(a)).




UNC Pembroke              5                 January 27, 2011
OFFICE OF STATE BUDGET & MANAGEMENT

   The Governor has delegated the authority to
    OSBM to:
    1.    Prepare the recommended budget
    2.    Certify the ratified budget
    3.    Distribute the budget to state agencies
    4.    Monitor, report, and control the State budget.




UNC Pembroke                    6                    January 27, 2011
OFFICE OF STATE BUDGET & MANAGEMENT

  Issues Biennial Instructions for Budget
   Preparation
  Requests State Agencies Develop Budget
   Request
  Prepares Economic and Revenue Forecast

  Reviews Agency Budget Requests

  Governor Finalizes Biennial Budget and Six-Year
   Capital Improvement Plan
UNC Pembroke            7                 January 27, 2011
STATE BUDGET DEVELOPMENT TIME LINE

  Governor Presents Budget Message to
   General Assembly
  Presents Governor's Budget to General
   Assembly
  Appropriation Subcommittees Review All
   Budget Requests
  General Assembly Finalizes Budget and
   OSBM Certifies
UNC Pembroke           8                January 27, 2011
UNC BUDGET PROCESS
 Legal Basis
    State Executive Budget Act
    Higher Education Reorganization Act of 1971
 Board of Governors’ Role:
    Presents comprehensive financial plans to General Assembly
    Modifies plans based on resources made available by
     Legislature
    Establishes annual budgets which are administered by the
     constituent institutions



UNC Pembroke                     9                     January 27, 2011
 UNC BUDGET PROCESS
“A single, unified recommended budget for all public senior higher
education.”
Statute prescribes form of budget requests –
three categories:
 1.   Continuing Operations (enrollment, utilities, vehicle
      replacement) – allocated to institutions
 2.   Academic Salary Increases – lump sum to Board of Governors
      and then allocated to campuses
 3.   Expansions/Reductions, when appropriate – by priority – lump
      sum to Board of Governors and then allocated to campuses
      • New and expanded programs
      • Capital improvements
      • Increases to remedy deficiencies
UNC Pembroke                     10                     January 27, 2011
UNC BUDGET PROCESS
 Key steps in process of budget preparation:
 1. UNC President receives general instructions
    from Governor via State Budget Office.
 2. Budget workshops are conducted separately
    with three groups:
      •   UNC General Administration Council
      •   Chancellors
      •   Board of Governors


UNC Pembroke                   11              January 27, 2011
UNC BUDGET PROCESS
Key steps in process of budget preparation:
     (continued)
3.   In conjunction with the decisions reached at the budget
     workshops, instructions are provided to the campuses for
     preparation of institutional budget requests.
      • Continuation budgets
      • Academic salary increases
      • Expansions and improvements
4.   Chancellor is responsible for the preparation of budget
     requests for the institution and the assignment of any
     institutional priorities that may be applicable. The process
     of campus involvement is determined by the Chancellor,
     who appoints delegates to work with UNC General
     Administration.
UNC Pembroke                     12                     January 27, 2011
 UNC BUDGET PROCESS
Key steps in process of budget preparation: (continued)
5.   Institutional budgets are reviewed:
      • Continuation Budget – reviewed by Vice President-
        Finance for general consistency and conformance.
      • Academic Salary Increases – campus data reviewed by
        Senior Vice President for Academic Affairs and the Vice
        President-Finance in a similar manner to continuation
        budgets.
      • Expansions and Improvements – reviewed by internal
        review committee, headed by Senior Vice President-
        Academic Affairs, composed of the General
        Administration Council.
UNC Pembroke                    13                     January 27, 2011
UNC BUDGET PROCESS

Key steps in process of budget preparation: (continued)
6.   President confers throughout the process with the
     Chancellors.
      • Afterward, Vice President-Finance prepares
         recommendations for Board and its Budget and
         Finance Committee.
7.   After a final budget workshop for the full Board, the Budget
     and Finance Committee recommends the adoption to
     Board.
8.   Board takes final action, then submits to Governor and
     Advisory Budget Commission

UNC Pembroke                     14                    January 27, 2011
UNC BUDGET PROCESS

Key steps in process of budget preparation:
      (continued)
9.    President represents University in any hearings with
      Governor.
10.   Governor forwards recommendations to General Assembly.
11.   President, or his designees, represent University in
      Legislative hearings.




UNC Pembroke                  15                   January 27, 2011
ENROLLMENT BUDGETING OVERVIEW

   The SCH enrollment change formula is driven
   by the projected change in student credit hour
   (SCH) production as classified in a 12-cell
   funding matrix comprised of 4 areas of
   instruction assigned a cost category and 3
   levels of instruction.




UNC Pembroke             16                January 27, 2011
FOUR INSTRUCTIONAL/COST CATEGORIES
Category IV                             Category II
14 – Engineering                        13 – Education*
66 – Nursing                            05 – Area, Ethnic, Cultural & Gender Studies
                                        30 – Multi/Interdisciplinary Studies
Category III
                                        52 – Business, Management & Marketing
25 – Library Science
                                        24 – Liberal Arts & Sciences, Humanities
03 – Natural Resources &
                                        31 – Parks, Recreation, Leisure & Fitness
Conservation
                                        19 – Family & Consumer Sciences
51 – Health Professions
                                        16 – Foreign Languages, Literatures &
01 – Agriculture
                                        Linguistics
04 – Architecture
44 – Public Administration & Services   Category I
40 – Physical Sciences                  09 – Communications & Journalism
50 – Visual & Performing Arts           42 – Psychology
11 – Computer & Information Sciences    27 – Mathematics
15 – Engineering-related Technologies   45 – Social Sciences
26 – Biological Sciences                23 – English
                                        38 – Philosophy & Religion
*Student Teaching Courses               43 – Corrections & Criminal Justice
UNC Pembroke                            54 – History
                                          17                              January 27, 2011
OVERVIEW

     The three levels of instruction are
     undergraduate, masters, and doctoral. These
     three levels are based on differences in the
     cost of instruction associated with average
     class size.




UNC Pembroke             18                January 27, 2011
SCH CHANGE FUNDING MODEL
  EXHIBIT 3-1 SCH Enrollment-Change Funding Model Actual UNCP Calculations Regular Term Request
  Program
  Category                     Student Credit Hours                        SCH per Instructional Position                        Instructional Positions Required
                        Ugrad          Masters         Doctoral         Ugrad           Masters          Doctoral           Ugrad           Masters           Doctoral
  Category I                  -2924          -1386                0         708.64              169.52            115.56          -4.126           -8.176              0.000
  Category II                   5243          1379                0         535.74              303.93            110.16            9.786           4.537              0.000
  Category III                  2217             790              0         406.24              186.23            109.86            5.457           4.242              0.000
  Category IV                   -311              0               0         232.24               90.17             80.91          -1.339            0.000              0.000
  Total                         4225             783              0                                                                 9.778           0.603              0.000
                   Total All SCHs                             5008                                                     Subtotal Positions                             10.382
                                                                  Campus Ugrad Cost Factor with Positions                                         20.00%               1.956
  data input                                                      Total Positions Required                                                                            12.337
  calculated                                                      Instructional Salary Rate of Campus                                                                $74,584
  model provided                                                  Instructional Salary Amount                                                                       $920,176
                                                                  Other Academic Cost Rate and Amount                                             44.89%            $413,067
                                                                  Total Academic Requirements                                                                   $1,333,243
                                                                  Library Rate                                                                    11.48%
                                                                  Library Amount                                                                                    $153,056
                                                                  Gen'l Instt. Support Rate                                                       54.05%
                                                                  Neg Adjustment Factor                                                           50.00%
                                                                  Gen'l Instt. Support Amount                                                                       $720,618
                                                                  Total Requirements                                                                            $2,206,918
                                                                  Calculation of Appropriation Request
                                                                  Requirements Generated by SCH Model                                                           $2,206,918
                                                                  TuitionRevenue                            FTE             Tuition         Revenue$
                                                                  In-State Ugrad FTEs                       342              2060               $704,520
                                                                  OoState Ugrad FTEs                        12              11267               $135,204
                                                                  Res per GS116-143.6                        5               2060                $10,300
                                                                  In-State Grad FTEs                        43               2159                $92,837
                                                                  OoState Grad FTEs                          1              11486                $11,486
                                                                  Total Expected Revenue                                                                            $954,347
                                                                  Request Amount                                                                                $1,252,571

UNC Pembroke                                                                       19                                                                   January 27, 2011
 FUNDABLE OR NOT FUNDABLE…
 THAT IS THE QUESTION
  In general, SCHs are fundable if they are
  derived from degree creditable instruction in
  the regular term (fall or spring semester) via on-
  campus or distance learning efforts.
  SCHs are deemed non-fundable if covered by
  other state appropriations, or if tuition is set to
  cover the full cost of instruction.


UNC Pembroke              20                 January 27, 2011
FUNDABLE
 Regular term degree credit instruction delivered on
  campus or at off-campus resident credit centers
 Distance education degree credit instruction
  delivered to NC resident students, regardless of
  location, summer and regular academic year
 Distance education degree credit instruction
  delivered to non-resident students within NC
 Repeated courses
 Degree credit instruction offered via electronic
  delivery

UNC Pembroke              21                 January 27, 2011
NON-FUNDABLE
   Non-degree-credit instruction
   Certain instruction offered below the baccalaureate
    level
   Instruction to students auditing courses
   Instruction generating continuing education units
    (CEU’s)
   On-campus instruction delivered during the summer
    term
   Distance education delivered outside NC to non-
    resident students
   Instruction to university employees where employee
    tuition waiver is claimed
UNC Pembroke                 22                  January 27, 2011
 UNCP REVENUE SOURCES
   REVENUE                                     2007           2008           2009           2010

   Unrestricted

       State Appropriations                   $50,606,593    $57,624,051   $50,448,094    $53,580,406

       Student Tuition and Fees               $15,176,812    $18,038,017    $19,614,674    $21,167,374

       Other Revenue                           $1,710,090      $657,179      ($284,703)       $230,767

       SUBTOTAL UNRESTRICTED                  $67,493,495    $76,319,247   $69,778,065     $74,978,547

       Sales and Services                     $10,323,642   $13,835,062     $14,697,312    $14,975,706

   Restricted

       Federal Grants and Contracts           $10,162,452    $11,804,653    $14,872,757    $21,881,143

       State and Local Grants and Contracts     $271,605       $769,624       $405,523        $476,452

       Nongovernment Grants and Contracts        $48,168        $49,760        $96,368       $166,606

       Capital Appropriations                 $10,716,197     $6,127,194     $1,709,530     $3,234,143

       Additions to Endowments                  $473,304       $433,656      $1,188,853      $660,489

       SUBTOTAL UNRESTRICTED                  $21,671,726    $19,184,887    $18,273,031    $26,418,833

   Total Revenue                              $99,488,863   $109,339,196   $102,748,408   $116,373,086


UNC Pembroke                                      23                                       January 27, 2011
FY 2009 REVENUES
  Sales and Services:
     Sales and Services of Aux Enterprises:
        Residential Life                              $4,670,966
        Dining                                        $3,379,254
        Student Union Services                            $45,479
        Health, Physical Ed, Recreation                 $767,875
        Bookstore                                     $3,941,642
        Parking                                         $257,511
        Athletic                                        $181,194
        Other                                         $1,168,696
    Sales and Services of Ed and Rel Act.               $284,695
 Total Sales and Services                           $14,697,312


 UNC Pembroke                                 24   January 27, 2011
ADJUSTED DIVISION BUDGETS PER BANNER
Division                  Adj. Requirements      % of Subtotal
Chancellor                          $5,480,194            7.15%
Instruction                    $43,141,048             56.25%
Academic Support               $10,570,599             13.78%
VC Business Affairs                 $9,564,651          12.47%
VC Student Affairs                  $1,962,079           2.56%
VC Enrollment                       $3,630,214           4.73%
VC Advancement                       $766,207            1.00%
VC University Relations             $1,577,422           2.06%
Sub Total                      $76,692,414            100.00%
Utilities                           $2,802,272
Student Financial Aid           $1,998,036
SUM                            $81,492,722

UNC Pembroke                   25                    January 27, 2011
UNCP BUDGETING PROCESS

Operational Funding
 Over-arching parameters provided by VC for
  Business Affairs as set by General
  Administration.
    1.    Continuation Budget Request – developed and
          entered into GA budget system by Director of
          Budget and Financial Planning. Various divisional
          employees provide input especially facilities staff.


UNC Pembroke                    26                    January 27, 2011
UNCP BUDGETING PROCESS

2.   Expansion and Reduction Requests
     •   Divisional input solicited from appropriate
         departments, prioritized, and submitted to Budget
         Director.
     •   Budget Director summarizes input to be shared
         with the executive staff (ES) and Chancellor.
     •   ES sets University priorities.
     •   Chancellor approves priorities or modifies.
     •   Approved data entered into GA budget system.
UNC Pembroke                   27                   January 27, 2011
UNCP BUDGETING PROCESS
3.    Capital Budgeting (new projects, appropriated and non-
      appropriated as well as repair and renovation requests)
     • Asst. VC for Facilities directs the process with direction
       given by General Administration.
     • Six year plans for new projects and for the repair and
       renovations.
     • Divisions- Request for projects or needs is made to
       departments and prioritized and shared with Asst. VC for
       Facilities.
     • Asst VC- Summarizes all requests by category. Shares
       with ES and Chancellor.
     • Chancellor- Approves or modifies the recommendations.

UNC Pembroke                    28                     January 27, 2011
FY 2011 UNALLOCATED RESOURCES
2011 Enrollment Growth              Academic Affairs   Institutional Support       Total
        Faculty salaries/benefits     $2,215,382                               $2,215,382
        (20.09 positions)
        Library                        $232,219                                $232,219

        Institutional Support                              $1,145,375          $1,145,375

        Prior Year Enrollment                              $2,342,574          $2,342,574
        Growth & Focus Growth
Total                                 $2,447,601           $3,487,945          $5,935,550




UNC Pembroke                                  29                               January 27, 2011
FY 2011 BUDGET REDUCTION
 Budget Changes         Budget Amounts   Accounted For To Be Accounted For

 Flex Reduction          $2,500,000
 Tuition Offset          $1,335,200                       $1,164,800
 Legislative Mandates
      Reversion 1%                                         $558,488
      Recruitment                         $508,227




UNC Pembroke                       30                            January 27, 2011
FY 2011 UNFUNDED BUDGET REQUIREMENTS

      Description                       Recurring       Nonrecurring
      Recruitment                           $350,000
      Workman Compensation                  $350,000
      Longevity                              $121,000
      SciQuest Implementation                 $45,000         $45,000
      Campus Police Officers - 3             $121,000
      SCT Consultant                                        $160,000
      Shared Services                         $65,000
      Audit Fees                              $55,000
      Other Controller $                      $42,800         $20,000


UNC Pembroke                       31                            January 27, 2011
 FY 2011 UNFUNDED BUDGET REQUIREMENTS
 CONTINUED
      Description                             Recurring   Nonrecurring
      Student Conduct Database                $5,500
      Leadership Program                      $12,000
      Student Voice Assessment                $17,860
      Restore Selected Permanent Cuts         $43,113
      Maintenance postage equipment           $21,748
      Assistant Budget Director               $82,171
      Staff Tuition Waivers                   $14,000
      Business Services - nonrecurring                    $64,000
      Human Resources                         $23,700     $14,000



UNC Pembroke                             32                              January 27, 2011
 FY 2011 UNFUNDED BUDGET REQUIREMENTS
 CONTINUED
    Description                                Recurring   Nonrecurring

    UNCP Today                                             $30,000
    Level Three Body Armor                                 $12,600
    Touring Bus                                            $250,000
    Campus Maintenance and Appearance          $172,000    $125,000

    Building Leases – Lowery Properties        $24,000
    Maintenance .80 FTE                        $33,112




UNC Pembroke                              33                          January 27, 2011
UNCP BUDGET PLANNING FY 2012

 Budget Memo # 1
  Expansion/Reductions

  Submit top 3 expansion requests

  Plan for 5% and 10% reduction of base budget

  GA will request funds for enrollment growth

  GA will consider requests for
      1.   Salary increases
      2.   Campus safety

UNC Pembroke                  34           January 27, 2011
UNCP BUDGET PLANNING FY 2012

 General Planning Information
  Tuition Increase Approved – 218/yr
         6,676 FTE @ $218 = $1,455,368
         9% Tuition increase
    Additional Tuition Increase - $500/yr
         6,676 FTE @ $500 = $3,338,000
         20.6% tuition increase
    Reductions
         5% = $3,000,000
         10% = $6,000,000
    Prior Year Unallocated Enrollment Growth ???

UNC Pembroke                    35                  January 27, 2011
UNCP BUDGET PLANNING FY 2012

 Budget Memo # 2
 • Capital
      1. Appropriated six year plan
      2. Non-appropriated six year plan
      3. Repair and renovations six year plan




UNC Pembroke                 36                 January 27, 2011
LINKS FOR INFORMATION
   Instructions for Preparation of the 2011-13 State Budget
    http://www.osbm.state.nc.us/files/pdf_files/BudgetInstructions1_2011-13.pdf


   The UNC Budget Development Process
    http://www.northcarolina.edu/finance/budget/Budget_Process.pdf


   NC General Assembly Senate Bill 897
    http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S897v8.pdf


   Enrollment Change Funding Model
    http://qed.ncat.edu/ir&p/funding-manual.pdf



UNC Pembroke                              37                            January 27, 2011
FY 2011 BUDGET REQUESTS
  Divisional Requests
        Recurring
        Non-recurring




UNC Pembroke            38   January 27, 2011
BUDGET DECISIONS/FACTS FY 2011
1.   How/what to fund from unallocated resources.
2.   How current year decisions impact next year’s
     budget challenges.
3.   Concern that many administrative
     departments are under funded and under
     staffed.
4.   How to maintain current student/faculty ratios
     during this period of enrollment growth with
     budget reductions and reversions.
UNC Pembroke              39                January 27, 2011
BUDGET FACTS/OPTIONS FOR FY 2012
1.   Anticipated 10% budget reduction ($6.0M)
2.   Approved tuition increase $218
     (9% increase, $1.5M additional revenue)
3.   Possible reversions (1%-3%)
4.   Possible programmatic reductions (administrative
     and academic)
5.   Consider possible additional tuition increases
     (per General Administration, up to $500/year
     20% increase ,$3.4M)
6.   Prior year unallocated budgets

UNC Pembroke               40                 January 27, 2011
SUMMARY OF STUDENT CHARGES

    Undergraduate Student   2009 -        2010 -   Change   Change
    Charges/Year            2010          2011     Amount   Percentage
    Tuition                 $2,060        $2,423   $363     17.6%
    Fees                    $1,676        $1,717   $41      2.4%
    Subtotal                $3,736        $4,140   $404     10.8%
    Room/Board              $5,740        $5,990   $250     4.4%

    Total Costs             $9,476        $10,130 $654      6.9%




UNC Pembroke                         41                             January 27, 2011
FY 2012 BUDGET SCENARIO
  Budget Reduction of 10%                                     $6.00M
  Anticipated Budget Reversion of 2%                          $1.20M
  Total Reduction/Reversion                                   $7.20M


  Possible Resolution
        Approved Tuition Increase                             $1.50M
        Restate FY 2011 Reversion                              $.56M
        Unallocated Funds from Prior Years                    $1.50M
        Programmatic Reductions (Administrative & Academic)   $2.30M
        Additional Tuition Increase ($200/yr or 8.2%)         $1.34M
  Total                                                       $7.20M



UNC Pembroke                                 42                January 27, 2011
 ENROLLMENT GROWTH EFFECT ON
 APPROPRIATIONS FISCAL YEARS 2008-2011
      $58,000,000


      $56,000,000


      $54,000,000


      $52,000,000


      $50,000,000                                           Accumulated EG, 2008 Forward
                                                            Base Appropriation
      $48,000,000


      $46,000,000


      $44,000,000


      $42,000,000
                    FY 2008   FY 2009   FY 2010   FY 2011


UNC Pembroke                                 43                                  January 27, 2011

				
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