Budget Office Division of Business and Finance

1. Budget OfficeDivision of Business and Finance DEVELOPING A UNIVERSITY-WIDE BUDGETAn Overview of the External Budget Development Process

2. What is the University-Wide Budget? Total Current Funds - Unrestricted and Restricted At USC, this includes funds: A, B, C, D, E, F, G, H, J, K, L, S, R & RP Excludes funds: T, V, W, X, Y & Z At the state level, our funds are: General Funds (state appropriations) Other Funds (also called earmarked funds) Restricted Funds

3. UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLY Summary of Current Funds Revenue 1996-2006 10 Year Growth in Current Funds Revenue 74.3%

4. UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLY Summary of Current Funds Revenue FY2006 Budget *Does not include School of Medicine

5. UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLY Summary of Current Funds Expenses 1996-2006 10 Year Growth in Current Funds Expenditures 71.3%

6. UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLY Summary of Current Funds Expenses FY2006 Budget *Does not include School of Medicine

7. USC Campuses USC Columbia USC Aiken USC Lancaster USC Beaufort USC Salkehatchie USC Upstate USC Sumter USC Union • Senior and Regional Campuses account for over $200M (24%) of the Total Current Funds of USC • Enrollments on these campuses are 30% of USC’s total student count

8. External Budget Development & Execution • Budget Development • Commission on Higher Education • Governor • General Assembly • Budget Execution • Budget & Control Board • State Treasurer • Comptroller General

10. Commission on Higher Education The South Carolina Commission on Higher Education (CHE) operates pursuant to South Carolina Code of Laws (Title 59, Chapter 103) to serve as the coordinating board for South Carolina’s 33 public institutions of higher education. The major functions are: advocacy and coordination, information services, accountability, and administration. The CHE is organized into four divisions: Academic Affairs and Licensing, Finance, Facilities and Management Information Services, Student Services, and Access and Equity. • Mission Resource Requirements Model • Performance Funding Reporting • Below the Line Requests • Capital Budget Requests • Access & Equity Funding • Academic Endowment Incentive • Lottery Funds – Scholarships

11. Commission on Higher Education – Public Institutions Sector I – Research Institutions USC Columbia (includes School of Medicine) Clemson MUSC Sector II – Teaching Institutions The Citadel Lander Coastal Carolina SC State College of Charleston USC Aiken Francis Marion USC Beaufort USC Upstate Winthrop Sector III – Regional Campuses USC Lancaster USC Sumter USC Salkehatchie USC Union Sector IV – Technical Colleges (16) South Carolina’s 33 higher education institutions are split into four sectors

12. Commission on Higher Education Act 359 passed in 1996 gave authority to the CHE to submit the annual budget request for all of higher education and to establish the funding methodology for all institutions based on the institution’s achievement of performance funding standards. As part of the implementation of performance funding, the CHE designed the Mission Resource Requirements (MRR) to provide an estimate of the budget needs of all public institutions. Performance Funding & Mission Resource Requirements

13. Mission Resource Requirements The MRR is a 10 step model: Step 1: Instruction: • Three year average credit hour production by discipline • Pre-determine student/faculty ratio • Pre-determine faculty salary average • Allowance for fringes Step 2: Research • Calculated at 30% of sponsored research expenditures Step 3: Public service • Calculated at 25% of sponsored public service and non-general fund public service expenditures Step 4: Libraries • Prior year’s expenditures per FTE inflated by HEPI Step 5: Student Services • Prior year’s expenditures per headcount inflated by HEPI

14. Mission Resource Requirements – continued Step 6: Physical Plant • Calculated by five formulas for general services, building maintenance, custodial services, grounds maintenance and utilities Step 7: Administration • Calculated at 25% of Steps 1-6 Step 8: Total Education & General Cost • Sum of Steps 1-7 Step 9: Revenue Deduction • Target revenue based on 50% of in-state undergraduate student revenue and 100% of out-of-state undergraduate revenues • Actual fee revenues are deducted for graduate students • Medical students are calculated at 30% in-state and 75% out-of-state Step 10: State Support Needs Amount • Step 8 less Step 9

15. FY 2005-2006 Mission Resource Requirements

16. Mission Resource Requirements – FY 2005-2006 All South Carolina Public Institutions

17. Mission Resource Requirements – FY 2005-2006 USC Columbia’s performance funding score is consistently one of the highest in the state with a “substantially exceeds requirements” rating – but no new funds are currently tied to performance funding. USC Columbia

18. Change in State Appropriations - Columbia Campus (excludes School of Medicine) Reduction in State Appropriations FY2001 to FY 2006 - over$45,000,000 *Does not include School of Medicine

19. State Funding Changes – Columbia Campus(excludes School of Medicine) • New state funding is for designated purposes, not for general operations • These new funds do not offset the over $45M reduction in state funding • Pay package increases require a commitment of University dollars as the state covers approximately two-thirds of the increase • For FY2005 the USC amount of the 3% pay package was $1,483,041 • For FY2006 the USC amount of the 4% pay package was $2,457,957

20. USC Columbia State Appropriations - Below-the-Line and Special Funding

21. Columbia Campus State Appropriations and Tuition & Fees

22. USC Columbia Campus Enrollment Headcount History

23. Budget & Control Board - Office of State Budget State Detail Budget Submission - “Line-item” Budget • Report three years each fall: actual for fiscal year just ended, update current year for legislative changes, and plan next fiscal year • Establish spending authority for all unrestricted and restricted funds Governor’s Submissions • Operating & capital requests and provisos • Agency Activity Inventory • New for FY2007 – Agency Accountability Report based on Baldrige criteria (in conjunction with Institutional Planning and Assessment) Fiscal Impact Statements • Throughout legislative session, complete fiscal statements with USC impact from various legislation

24. Timeline

25. QUESTIONS