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Budgeting 101

Budgeting 101. Sponsored by Faculty Senate September 23, 2014. Presented by: Vice Provost, Alan Boyette Vice Chancellor for Business Affairs, Charlie Maimone. Agenda. Higher Education Budget and Finance Landscape UNCG Sources and Uses of Funds Budget Planning

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Budgeting 101

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  1. Budgeting 101 Sponsored by Faculty Senate September 23, 2014 Presented by: Vice Provost, Alan Boyette Vice Chancellor for Business Affairs, Charlie Maimone

  2. Agenda • Higher Education Budget and Finance Landscape • UNCG Sources and Uses of Funds • Budget Planning • FY 15 Budget and FY 15-17 Biennium Updates • Enrollment Growth • *Recognitions: • Steve Rhew, AVCBA Finance • Steve Honeycutt, Director of Budgets • Liz Meeks, AVP for Academic Resources

  3. US Higher Education Landscape • Change in public expectation • Business/career imperative • Reduction in state & federal support • Increased regulation • Pressure on tuition & fees • Cost control & revenue generation • Collaboration expectation • Efficiency & productivity • Demographic changes • Alternative education delivery models

  4. US Higher Education Landscape • According to the Education Commission of the States – 2014 State-of-the-State Addresses: • Governors in at least 17 states outlined proposals related to higher education, most focused on tuition, financial aid and affordability. • Five Governors called for a freeze on tuition rates. www.ecs.org There are no expectations of returning to previous levels of funding for most public universities

  5. NC Higher Education Landscape UNC Strategic Direction for 2013-2018 Five Goals: • Setting Degree Attainment • Strengthening Academic Quality • Serving The People of North Carolina • Maximizing Efficiencies • Ensuring An Accessible and Financially Stable University https://www.northcarolina.edu/?q=strategic-directions-initative/reports-and-documents

  6. NC Higher Education Landscape • Performance funding • Policy/Regulatory constraints • Carry forward • Out of state students • Tuition and fees • Financial aid • F&A • Academic and Administrative Efficiencies

  7. UNC System Revenues Sources and Uses of Funds

  8. FY 2013 UNC System Revenues(Includes UNC Hospitals/Excludes NCSSM) $9.3 Billion Source: BOG Retreat_Finance.pdf

  9. FY 2013 UNC System Expenditures(includes UNC Hospitals/excludes NCSSM) $9.0 Billion Public Service 4% Research 10% Academic Support and Student Services 7% Instruction 25% Institutional Support 6% Hospital Services 12% Physical Plant O&M 6% Auxiliaries 16% Other 6% Scholarships/ Fellowships 4% Depreciation 4% Note: Some research and private/endowment revenues are not available for immediate expenditure. Source: BOG Retreat_Finance.pdf

  10. UNCG Budget Sources and Uses of Funds

  11. FY 2014 UNCG Revenues $391 M *$6.9 million of other revenue not included on this graph. Source: 2013-14 Draft UNCG Financial Statements Statement of Revenues, Expenses, and Changes in Net Position

  12. FY 2014 UNCG Expenditures $365 M Source: 2013-14 Draft UNCG Financial Statements Note 10

  13. FY 2014 Expenditures by Category $365 M

  14. FY 2014 State Operating BudgetPermanent Budget by Account $238 M Source: Departmental Budgets 2013-14 http://fsv.uncg.edu/BudgetBook2013-14.pdf

  15. FY 2014 State FundsPermanent Budget by DivisionExcludes Benefits and Other Institutional Budgets ($69 million) $169 M Source: Departmental Budgets 2013-14 http://fsv.uncg.edu/BudgetBook2013-14.pdf

  16. FY 2015 Budget Update

  17. Enrollment Report

  18. Tuition Report

  19. FY 2015 -2017 Biennium

  20. FY 2015 -2017 Biennium • The Office of State Budget and Management memo August 26, 2014 Announces a net 2% reduction for the Biennium • General Administration guidance was to wait for further instructions • Instructions from General Administration September 17 confirms 2% Net Reduction requirement • Reductions + Expansion = (2%) • UNCG estimated state appropriations base budget = $143.5M • 2% Reduction equals $2.9M • Due September 26, 2014

  21. Budget Planning

  22. Background • UNCG operates on the State of North Carolina biennium budget cycle • The university conducts “budget calls” for eight (8) different budget cycles • Externally managed: • Office of State Budget and Management (OSBM), • UNC General Administration • Internally Managed: • University Budget Office

  23. External Budget Cycles • Biennial Continuation Budget • Biennial Expansion Budget • Biennial Capital Budget • Supplemental Budget • Campus Initiative Tuition Increases (CITI) • Mandatory & Non-Mandatory Student Fees • Summer School Rate Increases • Enrollment Projections

  24. Internal Budget Cycles • University Annual “Reversion” Allocation Budget • Special Funds Budgets • EPA (Exempt from Personnel Act) Legislative Salary Increases (BD 119) • SPA Legislative Salary Increases • Facilities & Administration Receipts (Overhead)

  25. Background • As a result, UNCG faces constant external budget compliance and reporting responsibilities. • Our offices involved in planning, performance and resource management have understandably been designed around these external requirements.

  26. Background • The campus community submits budget requests appropriate for each budget call. • Multiple processes restrict our ability to link comprehensive allocation decisions to any one program initiative. • The fragmented nature limits our creativity and collaboration among departments, schools and divisions.

  27. UNCG Budget Challenges • Need to identify university priorities of immediate importance • Enrollment • Enrollment • Enrollment • Need to focus our budget planning on the immediate needs of the University • Need to embrace leading-edge operation models that maintain or improve the quality of service while saving time and/or money.

  28. Budget Process Improvement Starting in advance of our external requirements Connecting our strategic plan to UNC Strategic Directions 2013–2018 Engage the campus community in the budget process Develop specific (quantifiable)annual objectives for strategic resource allocation - key to the process

  29. Budget Process Improvement A budget process, responsive to university strategic initiatives, promotes our shared values and encourages collaboration and creativity Align our work to accommodate our internal plans while still meeting all of our external obligations NOTE: None of our external compliance and reporting responsibilities will go away.

  30. A Budget Process that allows university budget planning to incorporate all funding sources into the evaluation in order to optimize the allocation of funds by source.

  31. Budget Process • A budget planning process provides departments a timely view of all available resources and requires a comprehensive program plan including outcome measures, regardless of funding source.

  32. Enrollment

  33. SCH - Change Funding Model Categories

  34. SCH – Change Funding Model FY 2014-15 (Projected) Campus Model – Distance Education 485 50 0 0.684 0.295 - 154 16 0 0.287 0.053 - 140 767 0 0.752 - 1.888 298 61 0 - 0.263 3.305 1,467 504 0 - 0% 25.6% 74.4% 7.527 1,971 $86,005 Average Faculty Salary $ 647,360 $ 290,600 $937,959 $ 107,678 $ 506,967 $ 1,552,604

  35. SCH – Change Funding Model FY 2014-15 (Projected) Campus Model – Regular Term 1,137 -7,985 -1,547 -11.268 9.839 -9.126 -6,555 -973 -1,587 -14.406 -3.201 -12.235 -1,362 -3,745 755 -7.314 6.872 -9.219 -295 -226 -18 -0.222 -0.973 -3.272 -54.525 -18,511 287 -4,177 -1.3% 18.6% -1.685 82.6% -56.21 -22,401 $86,005 Average Faculty Salary $ -4,834,341 $ -2,170,136 $-7,004,477 $ -804,114 $ -1,892,960 $ -9,701,551

  36. SCH - Change Funding Model Categories

  37. Thank You Contact Information

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