Shining Some Light on the Budget Process

1. Shining Some Light on the Budget Process The University of West Georgia September 27, 2007

2. Plan for Today’s Presentation • Budget concepts -- different fund categories Focus on E&G for the remainder of the presentation. • The Budget Process: • Formula from State to USG • How USG allocates to institutions • How we allocate it to Divisions • Internal Accountability Measures and Metrics

3. 1. Budget concepts:The Mysteries of Fund Accounting • How come you had money to build a fountain, when we lack sufficient classes for Freshmen? • How many classes will we have to cut to build a Stadium? • I notice that there are plans to build a new parking lot on the North Campus – how many classes will we have to cut to build it? • With a $100 Million dollar budget, how come we can’t build a parking deck? All Dollars Are Not Green!

4. Some General Fund Categories • Educational and General (E&G) • Auxiliary: • Health Services • Athletics • Housing • Bookstore • Transportation • Fees: • Technology Fees • Student Activities • MRR • Capital • Foundation

5. 2. The Budget Process Focus on E&G for the remainder of the presentation

6. Two Intertwined Processes

7. Budget Process and Timetable:“Before” it comes to UWG • June: Institutions submit requests for health insurance increases, new retirees, and O&M for new academic square footage • Board of Regents staff develops a budget request and Board approves a proposal for the Governor’s Office of Planning and Budget (OPB) • (FY09 request approved at August 7th meeting) • Fall: Chancellor and senior staff present, explain, and defend the budget proposal to OPB and Governor

8. New Process begun for FY2008 • During the fall months, system budget analysts will be comparing West Georgia to peer institutions • IPEDS • USO comprehensive universities • Comparison of Expenditures per student FTE

9. The Process (Continued) • January: Governor proposes the Budget for the entire State to the Legislature: • The major component of the USG budget is Formula Funding • Special Funding Initiatives • “B” Budget • Capital Budget • Other Adjustments, such as Budget Cuts

10. The Formula • Is a mathematical device used by the State of Georgia to allocate E&G funds to Board of Regents. • Is based on student credit hours, operation and maintenance of physical plant, and other organized activities. • In the formula, upper level and graduate credit hours are funded at a higher level than lower level (1000-2000) credit hours.

11. TheProcess (Continued) • Separately, Governor proposes Salary Increases (average % and effective date) to the Legislature in January – in recent years, this % has been the same as that of K-12 teachers.

12. TheProcess (Continued) • January to March/April (40 Days): The Legislature debates the budget; House, Senate, Conference Committee. During this period, there are considerable efforts on the part of USG staff, Presidents, VPs, Legislative Advocates (friends/supporters/faculty), etc. to include items of interest to the USG. • February: System Office holds budget hearings with institutions • March/April: Governor signs budget or declines to do so (In GA, the Governor has line-item veto) • April: University System of Georgia Office receives final allocation and makes allocations to institutions

13. Allocations to Institutions • Useful to think of these allocations as: • Continuing funds • New Funds • Salary raise allocations (75% of total needed) • Basis for allocations of New Funds to institutions: • Credit Hours (80%) • Performance (5%) • Strategic / Discretionary (15%) This is a moving target; there is a feeling that it needs to change. Other factors: - Strategic - Shadow budgets …

14. TheProcess (Continued) • April/May: Institutions have a very short time (days) to finalize budget • President’s Advisory Committee – Recommends distribution of new funds to President for allocation within Divisions • June: Board of Regents approve budgets for the fiscal year starting on July 1

15. B. UWG Internal Processes • Sept/October: Departments formulate needs for new funds and submit requests to Deans • Mid-October: UWG receives instructions for development of FY2009 budget from USO • October: Colleges & non-academic departments submit requests for new funding to divisional VPs • November: VPs formulate requests for new funding • December: PAC completes request for new funding and submits to System Office • February: Budget hearing at System Office

16. April/May: The Allocation Process of New Money to Divisions • Any money allocated to specific initiatives by the USG must go to those initiatives • Contingency Reserves: If not needed for budget cuts/shortfalls, reserves are used for library acquisitions, equipment for buildings, or other (typically one-time) university needs. • “Allocable” money is computed. Portions of new funds based on • Strategic directions of USG and West Georgia • Percentage of divisional budget to total budget

17. FY2008 Budget Highlights • New funding related to strategic plan:$1,047,184 • Retained Retention/Progression/Graduate Initiative funds, $350,000 • 1st Amendment includes $188,847 for Nursing initiative • UWG inclusion in “robust tier” of USG institutions – with % tuition increase equal to that of research institutions.

18. 3. Internal Accountability Measures and Metrics

19. Budgeted Positions by Division FY94 – FY08

20. FTE: 39% HC: 34% Percentage Change in Budgeted Positions by Division FY94 – FY08 Percentage Change in Student Headcount and FTE

21. Percentage of University Budgeted Positions: FY 1994 Percentage of University Budgeted Positions: FY 2008

22. UWG FY2008 Original Budget by DivisionE&G only, excluding capital projects

23. FY2009 Budget • Peer Comparisons • Accountability & Challenge • Prove RPG funds have been a benefit • Stay in “robust” tier • UWG as a destination institution • New requests from institutions must be tied to USG’s strategic goals of …

24. Renew excellence in undergraduate education • Create enrollment capacity – 100,000 students • Increase USG’s participation in research and economic development • Strengthen the USG’s partnerships with state’s other education agencies • Maintain affordability so that money is not a barrier • Increase efficiency

25. Peer Comparisons based on FY2007 expenditures • Total Expenditures per student FTE (FY2007) • “Robust” Tier • Georgia Southern • Valdosta • Kennesaw • West Georgia

27. * Library, ITS, Deans' Offices (including A&S Technical Support), Townsend Center, Graduate School, VPAA, RPG Initiative, Technology Fees, Indirect Cost Revenues, …

28. * Retiree payments, President’s account, Planning Initiatives (reserve), Institutional Research & Planning, Divisions of Business & Finance and University Advancement, …

33. Percentage of Degrees by College, FY2007 39.8% 39.5% 20.7%

35. Summary of Today’s Presentation • Budget concepts -- different fund categories Focus on E&G for the remainder of the presentation. • The Budget Process: • Formula from State to USG • How USG gives it to institutions • How we allocate it to Divisions • Internal Accountability Measures and Metrics

36. Thank you for all you do, and Thank you for coming!What questions may I answer for you?