Budget Process - University of Alaska Anchorage

Report
Exploring the UAA
Budget Process
(How do we Allocate Resources?)
By Kelly Thorngren, Budget Director, 786-4636
Goals for Today- to Understand:
• General Budget Concepts
• Responsibilities of Major Budget Units
• UAA’s budget request process for allocating
resources
• How the University tracks budget status
through management reports
• How changes in budget climate have impacted
budget available
Goals for Today
•
FUN!
•
•
•
(Ask Questions
Throughout!)
Enough Fun
• Let’s take a Quiz!
Budget Basics
• Budget distributes authority to spend for a full
year per a departments financial plan.
– By projecting budget for a year’s worth of revenue to
be earned, you pre-fund and facilitate spending.
• Your starting “Base budget” is increased each
year by salary rate and benefit increases, plus any
new budget increment awards.
• “Adjusted Budget” includes one-time transfers
made during the year.
– Budget projections are never perfect, so budget
revisions are done during the year to accommodate
changes.
UAA Tuition Sharing Policy
• Community Campuses keep 100% of their tuition
and pay for their own personnel increases,
incremental increases and other fixed costs.
• Anchorage Colleges keep 80% of their tuition, the
amount of the rate increase is pulled back to help
pay for all departments salary and benefit
increases.
– 20% kept centrally to pay $5M employee and spouse
tuition waivers, $3M payments to SW for Computing,
Insurance, and $1M for bond debt service
Major Budget Units
• Budget is distributed to Major Budget Units
(MBU), who have the responsibility and authority
to distribute budget among their departments.
– One-Time: Can distribute extra salary budget (salary
savings) or excess revenue earned to buy equipment,
or do an industry needs survey for a new program…
– On-going: Can reorganize positions to distribute
general fund to high priority needs, like advising
positions or distance delivery technology support
position or faculty for new degree…
• MBU manages budget, cannot be deficit, and
reports on budget status through the
management report process.
Major Budget Units
College of Arts and Sciences
Admin Services
College of Health
OAA/Provost
Community & Technical
College
University Advancement
School of Engineering
College of Education
Chancellor
College of Business &
Public Policy
Library
4 Community Campuses
Students Affairs
Major Budget Units- Total FY14 Budget Size Varies
College of Arts and Sciences
$33.8M
College of Health
$24.3M
Community & Technical
College
Admin Services
$68.6M
OAA/Provost
$10.5M
$19.3M
University Advancement $3.0M
School of Engineering
College of Education
$7.8M
$12.8M
4 Community Campuses
$5.0M
$1.4M
Library
$6.9M
Students Affairs
$15.8M
$6.1M
College of Business &
Public Policy
$16.6M
Chancellor
$10.9M
$7.6M
Management Report Process
• Each MBU submits monthly budget status reports
beginning in October (no reports Xmas and Spring
Break)
•
•
•
•
Balance to end of Cycle financial reports
Budgeting is all about projections…. to June 30!
Macro and Leave Formula help to automate
Balance at end of year can return to department
in the next fiscal year (end of October.) Carry
forward now called unreserved fund balance.
MBU- Equal Expense and Revenue Budget
• Each MBU receives equal Expense and
Revenue Budget.
– Equal E/R budget for each Program Code function
Examples: IN, RO, PS, AS, SS, GA, OM, FA, UX)
(Orgs beginning with 11, 12, 13, 14, 15, 16, 17, 18, 19)
• Expense Budget is the Authority to Spend
• Revenue Budget is the Responsibility to Earn
– if the projected revenue isn’t earned, then
expenses may need to be curtailed
Must Earn Revenue to Spend it
• Only one type of revenue, General Fund from the
State, comes “pre-earned” (YTD revenue is there
already, always the same as the budget)
– In acct 9210
– When GF Revenue budget
moves, the ytd will move
with it… eventually.
(SW does the JV later)
• Let’s see how that works on the Mgmt Report.
Budget Methods
• UAA uses a continuation budget aka incremental
budget method (just as the State of Alaska does.)
– Basically means that at the start of a new budget year
MBUs continue with the Base Budget they got last
year, plus fixed cost increases for personnel (salary
rate and staff benefit increases)
– In March the Major Budget Units will start to work on
their Position Control Number (PCN) List which will be
used to distribute Personnel budget and calculate rate
increases on the different personnel categories.
Continuation Budget Method
– The State gives us our Base Budget General Fund from
last year plus 50% of the personnel increases (not for
temps or students.) It was 60%.
• The State also give us the authority to earn the non-GF
revenue. If we earn too much, we have to ask for more
“receipt authority”
– Then we submit increment requests for specific
proposals
– Don’t have to justify the entire budget each year (as
with zero based budgeting method), just the requests
for incremental increases.
Who Makes the Allocation Decisions at UAA for
additional (increment) Budget?
• Where does the process start?
• How many times must a budget request compete
with other requests and be seen as a high priority?
• If you wanted a group of people to make budget
priority decisions, who would you want to represent
you?
• What can improve the chances for a request to be
approved? Excellent story telling data.
Department
Writes
Request
Chancellor & his
Cabinet Make Final
Decisions
PBAC deliberates
and recommends
to Chancellor
Dean or Director
Prioritizes Dept
Requests
Dean or Director
submit requests
to PBAC
Department
Writes
Request
Chancellor & his
Cabinet Make Final
Decisions
PBAC deliberates
and recommends
to Chancellor
Dean or Director
Prioritizes Dept
Requests
Dean or Director
submit requests
to PBAC
PBAC-Planning and Budget Advisory Council
• Co-chairs: Provost Bear Baker and VC Admin Services Bill Spindle
• Members from:
– 3 Deans, 1 Dean of Students, 1 Institute Director, 2 faculty at
large, 1 Community Campus Director, 1 staff-at-large, 5 PBAC
council staff, 1 staff from University Advancement and 5 Reps
from Faculty/Staff/Student Governance.
– Academic Affairs, Admin Services, Alaska Native Studies, College
of Business & Public Policy, College of Education, College of Arts
and Sciences, College of Health, Community & Technical College,
Prince William Sound Community College, Student Affairs,
ANSEP, Alumni Relations, Faculty Senate, Union of Students, APT
Council, Classified Council, Budget, Financial Systems, Facilities,
Provost Office, and Institutional Research.
UAA PBAC Process Timeline
• February: Budget Guideline Document issued
• March: MBUs start work on PCN list
• April: MBUs turn in Increment Budget Requests
and present to PBAC April 17/18
• May: MBUs work on Base Budget details
• May: PBAC finalizes UAA distribution decisions,
submits to Chancellor
• June: When State/UA approve,
Budgets finalized
Annual PBAC Instructions-Handy!
• Provide guidance on upcoming budget climate
• Provide guidance on UAA
focused strategic goals
• Provide Forms needed
How many requests can UAA
consider funding?
• How much new money is available for allocation depends
on many factors…
– We depend on two types of revenue to fund our largest fixed
cost increase first, then $ can be available for increment awards
• In addition, money can be re-allocated from one
department to another
– UAA has distributed across-the-board cuts to General Fund in 7
of the last 9 years (1 to 2% each year) $8.3M
• In two of those years only Administrative depts were cut
• Every 1% cut equals approx. $1M which can be used to balance the
budget
• Requests not funded at UAA level, can be forwarded to
BOR/State Legislature for funding.
– In FY14, we received $1.3M of our $4M original request
Annual Decreases to General Fund Distributed to Major Budget Units
Department
FY06
FY07*
FY08
FY09
FY10
FY11
FY12
FY13*
FY14
9-Year Total
CAS
(102,602)
(137,680)
(263,131)
(245,261)
-
(84,254)
(832,928)
COH
(79,123)
(114,629)
(225,901)
(210,616)
-
(130,221)
(760,490)
CBPP
(60,023)
(74,927)
(143,263)
(135,770)
-
(64,328)
(478,311)
Education
(24,238)
(33,792)
(61,553)
(60,956)
-
(25,754)
(206,293)
Engineering
(25,631)
(42,655)
(87,362)
(75,944)
-
(42,078)
(273,670)
CTC
(81,239)
(111,217)
(200,172)
(199,180)
-
(59,456)
(651,264)
(115,940)
-
(59,019)
(245,970)
Library
Student Affairs
Advancement
Provost
Administrative
Services
Chancellor
(25,000)
(46,011)
(160,000)
(50,000)
(92,751)
(237,161)
(222,185)
-
(105,430)
(867,527)
(33,300)
(50,000)
(19,335)
(50,366)
(46,367)
-
(23,774)
(223,142)
(166,600)
(125,000)
(40,072)
(53,792)
(114,687)
(125,164)
-
(83,030)
(708,345)
(350,000)
(450,000)
(260,202)
(298,390)
(591,795)
(691,633)
-
(281,410)
(2,923,430)
(50,000)
(25,000)
(9,874)
(13,219)
(24,610)
(22,584)
-
(12,296)
(157,583)
(725,000) (841,100) (880,300) (2,000,000) (2,151,600)
-
(971,050)
(8,328,953)
Average Cut:
(925,439)
(759,900)
Two Reasons Budgets are Tighter Now
Tuition Rate Increases (%)
8%
7%
7%
6%
5%
4%
5%
7%
5%
3%
2%
2%
1%
0%
FY10
FY11
FY12
FY13
FY14
For two years the
impact of the
decrease in the State
support was
buffered.
% GF from State for Salary/Benefits
62%
60%
58%
56%
54%
52%
50%
48%
46%
44%
60%
60%
50%
FY10
FY11
FY12
50%
FY13
When the State
reduced it’s support
of the University’s
salary increases,
tuition rates went
slightly higher for
two years, then
dropped.
50%
FY14
But in FY14 we began
to live with a new
reality.
Simple?
• So, University budgets are pretty simple:
Basically the tuition rate increases are used to
pay for 50% of the personnel increases (the
State pays for the other 50%)
• So, the setting of the tuition rate increase is
important if not vital to the budget plan
– As is enrollment! student retention and
recruitment
Why not use other sources of revenue
to cover personnel increases you ask?
Interest Income
269,000
CIP Receipts
2,500,000
State IAR
7,088,600
UA Receipts
21,593,100
Ind Cost Recover
3,718,500
Student Fees
13,274,795
Tuition
61,420,305
Aux Services
23,986,100
I/A Receipts
10,197,300
Mental Health Trust
1,745,000
TVEP
1,895,200
General Funds
135,502,000
Federal Funds
33,808,700
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
FY14 Unrestricted, Restricted and Auxiliary Base Budget, total $317M
160,000,000
University Budget Balancing- If it was Simple
• FY14: Cover $3.8M Salary Increase Expense
with Tuition and GF Revenue $3.1M
– Personnel Salary Rate and Benefits $3.8M
– Tuition @ 2% $881
– General Fund $2,200.0
• Net Deficit would be $700.0
• But, it’s more complicated…. Of course.
FY14 Budget Update
• Total Expense $8.1M
–
–
–
–
Personnel Expense $3.8M
Dept Budget Distributions: $2.7M
Cover remaining $1M deficit from FY12
Cover fixed cost increase for $10M Deferred Maintenance Bond
payments $620.0
• Total Revenue $5.1M
– Tuition 880.7
– General Fund $2.2M
– Internal Reallocation (20% tuition) $2M
• Net Deficit $3M
– Carry forward $2M deficit
– Distribute 1% across-the-board cut to General Fund for all major
budget units
Why carry forward $2M Deficit?
• Would need to cut dept GF 3% rather than 1%
– Across the Board cuts not the best
• Depts like HR continue to be cut whether they are understaffed or
not…
• All admin departments do not earn tuition and therefore have less
excess funding to cover cuts
• Hold for more hopeful budget environment
– Tuition Rate Increase was an unknown for FY15 when
budget was finalized… it could have been 7% or 10% ( is
now known to be avg 3.2%)
FY15 Budget Planning
FY15 Budget Requests to the Legislature
Must be Prioritized and Approved by:
UAA PBAC Recommendation to Chancellor
UAA Chancellor and Chancellor’s Cabinet
UA President Gamble, his Cabinet and SW Budget
Board of Regents
Governor
Legislature
House and Senate Budget Committees
House and Senate
Conference Committee
Governor’s Veto
FY15 Budget Planning
• By now we know that there are 3 major
factors when planning for FY15….
– What is the tuition rate increase?
– What are the salary rate increases for each
employee group?
– Need to cover that $2M from FY14
eventually…
FY15 Tuition Rate Increase
Year (Fall-Spring Semesters)
Lower Division
PWSCC
Kodiak
All Others
Current Proposed
201320142014
2015 $ increase % increase
146
147
168
152
153
174
$6.00
$6.00
$6.00
4.1%
4.1%
3.6%
Upper Division
204
210
$6.00
2.9%
Undergraduate (UG) NonResident Surcharge
432
444
$12.00
2.8%
Graduate
391
403
$12.00
3.1%
Graduate Non-Resident
Surcharge
408
420
$12.00
2.9%
FY15 Personnel Increases being Proposed
• Staff (XR and NR) 2% increase with an additional
personal day off
• UAFT faculty extended current contract to December
31, 2014 (so rate increase may be the same 2.5% as
in FY14… but not officially announced yet)
• UNAC and Adjunct union expire Dec. 31, 2013being negotiated
FY15 Budget Gap Scenario
ANC
KPC
KOC
MSC
PWS
TOTAL
FY15
Expenses:
Salary Compensation 2.0%
Staff Benefit Rate Adj @ 2% increase
Cover Deficit Balance from FY14
Distributions
FY15 Cabinet Commitments*
FY15 PBAC Awards**
Revenues:
Tuition Rate Change @ 3.2% increase
General Funds - Wages/Ben
FY15 Gap
2,809.9
735.5
57.7
38.3
22.9
21.5
62.6
35.0
45.7
22.5
2,998.8
852.8
2,000.0
500.0
1,000.0
7,045.4
96.0
44.4
97.6
68.2
2,000.0
500.0
1,000.0
7,351.6
1,444.9
1,772.7
3,217.6
137.8
48.0
185.8
25.8
22.2
48.0
126.9
48.8
175.7
23.4
34.1
57.5
1,758.8
1,925.8
3,684.6
(3,827.8)
89.8
3.6
78.1 (10.7)
(3,667.0)
FY15 Scenario Adjusted
ANC
KPC
KOC
MSC
PWS
TOTAL
FY15
Expenses:
Salary Compensation 2.0%
Staff Benefit Rate Adj @ 0% increase
2,809.9
-
57.7
38.3
22.9
21.5
62.6
35.0
45.7
22.5
2,998.8
117.3
Do Not Cover Deficit Balance from
FY14 Distributions
FY15 Cabinet Commitments $0
FY15 PBAC Awards $0
Revenues:
Tuition Rate Change @ 3.2% increase
General Funds - Wages/Ben
FY15 Gap
2,809.9
96.0
44.4
97.6
68.2
3,116.1
1,444.9
1,772.7
3,217.6
137.8
48.0
185.8
25.8
22.2
48.0
126.9
48.8
175.7
23.4
34.1
57.5
1,758.8
1,925.8
3,684.6
407.7
89.8
3.6
78.1
(10.7)
568.5
We should remain positive, while understanding
that the more information we have about
programs and functions, the better we can
prove we are worthy of funding increases
• UAA has a $10M to $12M carry forward that can be used to
supplement budget
• Annual Cost Savings and Efficiencies report shows the BOR
and the State we are good stewards
• Enrollments could increase in response to the many retention
and recruitment measures
• We are still getting salary rate increases
• UA could return to slightly higher tuition rate increases
• Review Quiz and
• Any Final Questions?

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