Just Do It. Just Do It

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1 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Budgeting for Excellence Just Do It Presentation to the Faculty Senate November 16, 2004 Update on Budget Advisory Committee Working Plan Recommendations This file was formatted to contain all information of the presentation to the Senate including all text pages provided in a handout. Budgeting for Excellence Just Do It Provost s General Introductory Comments What Does This Mean to Academic Units

2 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Shifting of Sources of GRA: Academic Affairs General Revenue Allocation $102,057,064 Recovery of State F&A Appropriation $1,976,060 $53,459,224 2% 52% Academic Affairs Division Tuition $46,621,780 46% Distribution percentages of General Revenue Allocation within Academic Affairs calculated identically to the overall composition of the overall GRA for the entire UMKC operating fund. Tuition - 46% State Appropriation - 52% Recovery of F&A - 2% Academic Affairs General Revenue Allocation $108,581,853 Recovery of F&A $2,945,775 3% Tuition $60,521,726 55% State Appropriation $45,114,352 42% Note: For illustration purposes, the allocation of GRA by major source of revenue is based on the % distribution of the major sources of revenue to the campus GRA revenue. Distribution percentages of General Revenue Allocation within Academic Affairs calculated identically to the overall composition of the overall GRA for UMKC operating fund. Tuition - 55% State Appropriation - 42% Recovery of F&A - 3%

3 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, UMKC Budgeting for Excellence Revenue Allocation Model CURRENT General Revenue Allocation Enrollment Driven State Appropriation $$$$ Student Tuition Fees $$$$ Recovery F&A $$$$ Responsibility Center Based Aligns Resources to Goals & Priorities Incentive/ Performance Based Designated Fees Allocated directly to Units Academic Units General Revenue Allocation Campus Programs Support Units Proposed BFE General Revenue Allocation Model Impact to Academic Affairs Units Student Fee Tuition $$ (Net of Scholarships) LESS: 10% for Infrastructure Existing State Appropriation LESS: 10% for Infrastructure New State Appropriation $$$ Budgeting for Excellence Provost Office Modulated by Performance Assigned Goals BAC Just Do It ACADEMIC UNITS Allocated By Executive Cabinet Update on Budget Advisory Committee Working Plan Recommendations Setting the Context UMKC Budgeting for Excellence Major Attributes: Vision & Value Driven Accountability Open Responsive Strategic Documented Recommendations: Stakeholder input Aligns resources to priorities Assigns accountability Communication Multi-year focused Budget Advisory Committee Staff (1) Assembly Deans (3) Admin (6) Support Budget Advisory Committee Faculty Senate (2) Students (1) Faculty (6)

4 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Budget Advisory Committee Work in Progress COMPLETED: Discussion of proposed New Budget Process that aligns with the attributes from the Budgeting for Excellence model COMPLETED: Grounded on the current General Revenue Allocation model and current appropriation process COMPLETED: Need for funding campus priorities prior to any unit/division allocation of funds COMPLETED: Assumptions and methodology for Tuition Revenue allocations and Tuition Revenue Modeling for AY COMPLETED: Allocation Strategy for State Appropriations COMPLETED: Preliminary discussion concerning process to identify designated priorities and initiatives NOT COMPLETED: Budget Advisory Committee Work in Progress Specific %age allocations for core campus priorities Process for developing and reporting performance results Recommendations for campus stakeholder input Indirect Cost Recovery Defer to future phases Interim performance criteria for first year until measures can be developed Setting the Context UMKC Revenue Allocation Model Recommendation 2: Align resources to the campus priorities Net Revenue Allocation Model Incentives and rewards based on performance Partnerships and cost-sharing incentives Proposed Revenue Model: Transparent Open Responsibility centered based Incentive based -- Enrollment is everyone s business -- Contributions to Campus Goals and & Priorities UMKC Budgeting for Excellence Revenue Allocation Model Responsibility Center Based Enrollment Driven Aligns Resources to Goals & Priorities Incentive/ Performance Based Aligning Resources to Campus Priorities and Processes to Campus Values Transition to Budgeting for Excellence Revenue Allocation Model Old Paradigm Centralized Management Transition Phase: Exploration New Paradigm Responsibility Centered Management

5 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Aligning Resources to Campus Priorities and Processes to Campus Values: Transition to Budgeting for Excellence: Revenue Allocation Model Recommendations Old Paradigm: Centralized Management Transition Phase: Exploration New Paradigm: Responsibility Centered Management Reversion of salary savings. Net revenue sharing FY02 Limited management of operating budget components (manage expenses but not revenues). Incremental budgeting. Provost Leverage fund-fy03 Professional school tuition distribution-fy04 Net tuition fees less "off-the-top" funding for core educational support (library, instructional equipment, instructional facilities R & R, academic excellence enrollment management, reserve) allocated directly to Schools/Colleges Restrictions on use and transfer of funds between operating expense categories. Silo effect, no shared goals directing resource allocation. Proposed funding of operating cost for new facilities in academic units (SOD)-FY05 Central administration assumes all responsibility for financial health of institution. Financial flexibility maximized. Property rights principle protects base budget. Chancellor's innovation fund- FY04 Proposed 2% Performance Allocation- FY05 Proposed fund balance tax for facilities M & R-FY05 State funds allocated to: 1. Core administrative support functions 2. Campus-wide infrastructure and improvements: a) Library b) Institutional Excellence c) Non-instructional capital R & R d) Research Equipment d) Technology f) Reserve 3. Balance of state funds to support for teaching, research and service missions based on performance. $14.0 Million "off budget" items. Supplemental fees & charges allocated to unit-fy04 Graduate cluster fee allocated to unit- FY05 Allocate supplemental fees & charges directly to unit generating the revenue. Proposed Technology infrastructure fee allocated to IS. Required expenditure for infra-structure and ASP - FY05 5% of the amount of F & A recovery allocated to the campus reserved for research support & academic excellence, including partnerships. Dental School Construction Grant Match-FY02 Support faculty research through matching funds support. Reengineering Resources Allocation System Envision Resource Allocation as an Exercise in Investment: Scare Resources are Put to the Best Possible Use Draft 2/9/04

6 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, FY 2005 Original Budget Sources of Revenues - $353,662,010 Recovery of F&A $4,779,409 1% Grants and Contracts $35,700,000 10% Endowment / Gift $15,546,473 4% Non-Taxable Sales $17,076,915 5% Sales $35,240,812 10% State Appropriations $73,196,344 21% Transfers and Other Revenue $11,590,009 3% Beginning Balance $46,865,354 13% Other Student Fees $8,506,994 2% Tuition $105,159,700 31% Setting the Context UMKC FY 2005 Original Budget $353,662,010 All Current Funds Unrestricted Funds Operating Fund $ 234,293,307 Auxiliaries & Enterprise 43,316,586 Total Unrestricted Funds $ 277,609,893 Restricted Funds $ 40,352,117 Grants & Contracts $ 35,700,000 FY 2005 Budget $ 353,662,010 * * Including budgeted beginning fund balance Setting the Context GRA as a Component of the FY 2005 Original Operating Budget - $234,293,307 General Revenue Allocation State Appropriation $ 73,080,834 Tuition Fees 98,309,713 Recovery of F&A 4,779,409 GRA Total $ 176,169,956 Other Revenues in Units $ 32,586,044 Beginning Fund Balances $ 25,537,307 TOTAL Operating Fund $ 234,293,307

7 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, CURRENT General Revenue Allocation State Appropriation $$$$ Student Tuition Fees $$$$ Recovery F&A $$$$ New Model For General Revenue Allocation Designated Fees Allocated directly to Units Academic Units General Revenue Allocation Campus Programs Support Units Net Tuition Fees (Net of Operating Fund Scholarship/Fee Waivers) 90% Net Tuition Fees to Academic Units Enrollment Incentives 10% Upfront Funded Campus Priorities Existing State Appropriation (and F/A Recovery) 90% Existing State $$$ to Academic & Support Units Performance Based Incentives Future Year New State Appropriation $$ Designated Programs & New Initiatives Revenue Allocation Model Day-to-Day Campus Priorities Proposed Off the Top Funding Set-asides Instructional and institutional library support Instructional and capital research equipment Facilities M& R and Capital Improvements for both academic and support facilities Special Incentives for Academic Excellence and Institutional Excellence Central Emergency/Contingency Reserve Enrollment Management Initiatives Technology Improvements Assumptions: Fiscal Year Term Course Jurisdiction Proposed Revenue Allocation Model Assumptions (Based on Most Current Tuition Rates) Student Jurisdiction Residency Status Student Level Includes Prior Year SCH 2004 AY On Campus SCH On Campus All Residency Designations Undergraduate/Graduate/ Professional None None Excludes Continuing Education On/Off Campus Univ of MO Video Network Continuing Education On/Off Campus; High School Advanced Credit Program; UMKC Northland; Ft. Leavenworth None Dual High School; PACE; EMBA Net Student Credit Hour (SCH) Allocation Criteria Student Level Undergraduate Graduate Majors Taking Home Academic Unit Courses 100% of Net SCH to Academic Unit Course Provider at the designated undergraduate tuition rate 100% of Net SCH to Academic Unit Course Provider at the designated graduate tuition rate Student Level Undergraduate Graduate Net Student Credit Hour (SCH) Allocation Criteria Majors Taking OTHER Academic Unit Courses 80% of Net SCH to Academic Unit providing Course Instruction at the designated Undergraduate tuition rate 20% of Net SCH provided by Other Schools for its Majors at the designated Undergraduate tuition rate 80% of Net SCH to Academic Unit providing Course Instruction at the designated Graduate tuition rate Professional Schools 100% of Net SCH to Academic Unit Course Provider at the designated professional school tuition rate Professional Schools 20% of Net SCH provided by Other Schools for its Majors at the designated Graduate tuition rate 100% of Net SCH to Academic Unit providing Course Instruction at the designated campus Graduate tuition rate (1) 100% of Net SCH to Professional School Academic Unit LESS NET SCH provided by Other Schools at the regular campus rate Graduate tuition rate (1) Except for Year 1& 2 Medical Students allocation at undergraduate rate)

8 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, EXAMPLE Nursing School Revenue Sharing Gross SCH Tuition: $ 2,420,000 Less: Allocated Unit Scholarships/Waiver (470,000) Less: 10% Set Aside (195,000) Total SCH Net Tuition $$$ $ 1,755, Plan Nursing School 100% SCH from Majors As Home Unit & Provider Earned 100% SCH $1,399,000 Earned by Providing Courses to Other Schools From Other Schools 80% SCH $88,000 Nursing Majors Taking SCH Outside of School As Home Unit Earned 20% $71,000 TO Other Schools LESS 80% SCH ($285,000) Tuition $$$ from Model $1,558,000 EXAMPLE Law School Professional Revenue Sharing Gross Tuition from SCH: $ 7,861,000 Less: Allocated Unit Scholarships/Waiver ( 1,172,500) Less: 10% Set Aside ( 669,000) Total Net Tuition $$$ $ 6,019,500 Law School 100% SCH from Majors As Home Unit & Provider Earn 100% $5,964, % Provider Plan Earned by Providing Courses to Other Schools From Other Schools PLUS 100% at Campus Graduate Rate $4,000 Tuition $$$ from Model $5,985,000 Law Majors Taking SCH Outside of School To Other Schools LESS 100% SCH at Campus Graduate Rate ($38,400) As Home Unit Earn 100% of SCH LESS Provider Share (At 100% Campus Graduate Rate) $17,000 Preliminary Modeling Results for Net Tuition Fees Enrollment Incentive FY 2005 Academic Units GRA $89,937,261 Available Net Fee $$$ from Model $68,327,562 Funding Gap Current GRA to Model $(21,609,698)

9 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, DRAFT - EXAMPLE OF BASE BUDGET ALLOCATION MODEL Unit Budgeted FY05 Base GRA Fee Income Earned from Model Variance Base to Model Fees Academic Units Arts and Science 18,681,845 19,318, ,514 Biological Sciences 6,427,754 2,543,469 (3,884,285) Business & Public Admin. 5,430,233 4,089,118 (1,341,115) Conservatory of Music 4,602,832 2,011,195 (2,591,637) Computing and Engineering 5,280,619 3,350,373 (1,930,246) Dentistry 14,564,998 7,543,824 (7,021,174) Education 4,913,349 4,014,183 (899,166) Graduate Studies 1,611, ,275 (1,450,000) Law 6,159,208 5,985,264 (173,944) Medicine 13,099,703 13,452, ,154 Nursing 3,803,133 1,558,932 (2,244,201) Pharmacy 5,362,312 4,298,714 (1,063,598) Sub-total Academic Units: $ 89,937,261 $ 68,327,562 $ (21,609,698) Modeling Assumptions: Examples assumes fee revenue shared between provider and home unit; Revenue allocated net of 10 percent for set asides and net of scholarships and waivers. Revenue allocated based on FY2005 educational fee rates. Draft October 6, 2004

10 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Allocation of Existing State Appropriation Performance Incentive Based 10% Upfront Funded Campus Priorities Existing State Appropriation (and F/A Recovery) Block Allocation Funding Stabilization 90% Existing State $$$ to Academic & Support Units Performance Based Incentives % Allocated Based on Performance Based Incentive Allocation of Existing State Appropriation Performance Incentive Based Block Allocation Year 1 90% Funding Stabilization 90% Existing State $$$ to Academic & Support Units Performance Based Incentives Funding GAP Performance Based Incentive Year 1 10% of GAP based on Performance Performance Incentive Plan Allocation of State Appropriation Block Allocation Academic Units: Based on preliminary modeling, in most instances, the current general revenue allocation academic units receive exceeds the amount of educational fee revenue currently generated by each academic unit, leaving a funding gap. In this proposal, academic units will receive a portion, or block allocation, of the funding gap in order to provide a stabilizing revenue base. The level of block allocation would be revisited on a regular basis either annually or on some other regular interval. For example: Year 1 - Academic units would receive 90 percent of the funding gap Year 2 - Academic units would receive 80 percent of the funding gap Year 3 - Academic units would receive 75 percent of the funding gap The block allocation of this model would be funded by revenue received by state appropriations. Performance Incentive Plan Allocation of State Appropriation Block Allocation Support Units: Support units will receive a block allocation equal to a predetermined percentage of its 2005 general revenue allocation. The block allocation will be based on 90 percent of the units current general revenue allocation. As support units cannot generate fee revenue from student enrollment, this percentage will remain constant each year. The block allocation piece of this model would be funded by revenue received by state appropriations. EXAMPLE Nursing School State Appropriation Allocation Gross Tuition: $ 2,420,000 Less: Allocated Unit Scholarships/Waiver (470,000 Less: 10% Set Aside (195,000) Total Net Tuition $$$ $ 1,755,000 Current Nursing FY 2005 GRA $3,800,000 Tuition $$ from Model $1,558,000 GAP from Current Year GRA Budget $2,241,000 90% Block Allocation $2,016,900 10% Performance Based $224,100

11 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Unit BASE BUDGET ALLOCATION MODEL 90% Block Allocation and 10% Performance Based Draft October 6, 2004 Budgeted FY05 Base GRA Fee Income Earned from Model Variance Base to Model Fees 90% Block Allocation Funding Differential Academic Units Arts and Science 18,681,845 19,318, , Biological Sciences 6,427,754 2,543,469 (3,884,285) 3,495,857 (388,429) Business & Public Admin. 5,430,233 4,089,118 (1,341,115) 1,207,004 (134,112) Conservatory of Music 4,602,832 2,011,195 (2,591,637) 2,332,473 (259,164) Computing and Engineering 5,280,619 3,350,373 (1,930,246) 1,737,221 (193,025) Dentistry 14,564,998 7,543,824 (7,021,174) 6,319,057 (702,117) Education 4,913,349 4,014,183 (899,166) 809,249 (89,917) Graduate Studies 1,611, ,275 (1,450,000) 1,305,000 (145,000) Law 6,159,208 5,985,264 (173,944) 156,550 (17,394) Medicine 13,099,703 13,452, , Nursing 3,803,133 1,558,932 (2,244,201) 2,019,781 (224,420) Pharmacy 5,362,312 4,298,714 (1,063,598) 957,238 (106,360) Sub-total Academic Units: $ 89,937,261 $ 68,327,562 $ (21,609,698) $ 20,339,429 $ (2,259,937) Examples assumes fee revenue shared between provider and home unit; Revenue allocated net of 10 percent for set asides and net of scholarships and waivers. Revenue allocated based on FY2005 educational fee rates.

12 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Unit BASE BUDGET ALLOCATION MODEL 90% Block Allocation and 10% Performance Based Draft October 6, 2004 Budgeted FY05 Base GRA Fee Income Earned from Model Variance Base to Model Fees 90% Block Allocation Funding Differential Support Units: Chancellor 1,407,088 - (1,407,088) 1,266,379 (140,709) Institutional Effectiveness 323,151 - (323,151) 290,836 (32,315) Intercollegiate Athletics* 2,071,778 - (2,071,778) 1,864,600 (207,178) Student Affairs 7,798,857 - (7,798,857) 7,018,971 (779,886) Advancement 3,207,499 - (3,207,499) 2,886,749 (320,750) Administration & Finance 17,913,328 - (17,913,328) 16,121,995 (1,791,333) Research 4,338,347 - (4,338,347) 3,904,512 (433,835) Academic Support Units: Provost 5,880,766 - (5,880,766) 5,292,689 (588,077) Information Services 5,424,021 - (5,424,021) 4,881,619 (542,402) Cultural Events 1,874,748 - (1,874,748) 1,687,273 (187,475) Library 5,465,057 - (5,465,057) 4,918,551 (546,506) Sub-total Support Units: $ 55,704,640 - $ (55,704,640) $ 50,134,176 $ (5,570,464) Campuswide Units: Scholarships** 22,003,370 - (22,003,370) 22,003,370 - Campuswide** 8,524,685 - (8,524,685) 7,672,217 (852,469) Sub-total Campuswide: $ 30,528,055 - $ (30,528,055) $ 29,675,587 $ (852,469) TOTAL ALL UNITS: $ 176,169,956 $ 68,327,562 $(107,842,394) $100,149,192 $ (8,682,869) Footnotes: * Intercollegiate Athletics subsidy is transferred from rate funds in the Campuswide department. ** Scholarships total includes $1,538,802 in funds allocated to Intercollegiate Athletics scholarships. *** Major funding areas in campuswide include: Utilities 4,868,574 Insurance 1,355,891 Fundamentals (Blocking and Tackling) 1,629,105 Net revenue sharing 600,000

13 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, State Appropriation Allocation Criteria STRATEGIC FOCUS TO UMKC GOALS Academic Focus to UMKC Goals Student Engagement, Learning & Success Goal 1: Attract, nurture & develop responsible community leaders Goal 3: Essential community partner & resource Research, Creative Activity & Scholarship Goal 2: National leader in scholarship & creative activity Organizational Effectiveness Goal 4: Workplace of choice Goal 5: Resources to fuel our vision Service Quality Goal 1: Goal 3: Goal 2: Support Focus to UMKC Goals Attract, nurture & develop responsible community leaders Essential community partner & resource National leader in scholarship & creative activity (Research, creative activity & scholarship) Organizational Effectiveness Goal 4: Workplace of choice Goal 5: Resources to fuel our vision State Appropriation Allocation Criteria Academic Unit Performance Criteria Student engagement, learning & success 40% Student engagement and learning Student degree success * Community partner/leadership success * Academic teaching success Research, creative activity & scholarship 20% National recognition for scholarship/creative activity * Organizational effectiveness 40% Workplace of choice Program efficiency * State Appropriation Allocation Criteria Support Performance Criteria Service Quality 50% Success of units in developing & delivering quality services to constituents Research, creative activity & scholarship Included As Part of 1 st Criteria Service Quality Organizational effectiveness 50% Workplace of choice Program efficiency

14 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, STRATEGIC FOCUS PROPOSED ALLOCATION CRITERIA/MEASURE SCORE STUDENT ENGAGEMENT, LEARNING AND SUCCESS (UMKC GOALS 1 & 3) 40% A. Student Success 80% of Unit/College students and recent alumni say they are satisfied with their UMKC experience (NSSE Survey) % of Goal Achieved 10% B. Student Degree Success -- Graduation Rates % of Goal Achieved for Graduation Rate of Unit * 10% C. Community Partner/Leadership Success First-time Placements of Graduates within nine months of graduation % of Goal Achieved for Graduation Rate of Unit * 10% D. Academic Teaching Success - Unit Course Evaluations Average Course Evaluations of Faculty % to Goal Achieved 10% RESEARCH, CREATIVE ACTIVITY & SCHOLARSHIP (UMKC GOALS 2) 20% E. National Recognition for Scholarship/Creative Activity % of Faculty and Students Receiving National/Regional Recognition and * 20% Publications/Journals and Research Grants/Contracts in Field ORGANIZATIONAL EFFECTIVENESS (UMKC GOALS 4 & 5) 40% F. Workplace of Choice Overall rating of 80% of Unit/School employees say that they enjoy working at UMKC % of Goal Achieved 20% G. Program Efficiency Department/Unit Operating Budget Expenditures per SCH compared to National Median Peer Program/Schools % of Goal Achieved Compared to Peers * 20% Evaluation completed by Provost based on Unit Discipline Norms. * TOTAL 100%

15 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, STRATEGIC FOCUS PROPOSED ALLOCATION CRITERIA/MEASURE SCORE SERVICE QUALITY (UMKC GOALS 1, 2 & 3) A. Success of Units in Developing Quality Service to Constituents 50% Overall rating, 80% of the customers' surveyed rated the unit's delivery of support services as "Superior" % of Goal Achieved 50% RESEARCH, CREATIVE ACTIVITY & SCHOLARSHIP (UMKC GOAL 2) Included As Part of Criteria A. - Service Quality ORGANIZATIONAL EFFECTIVENESS (UMKC GOALS 4& 5) 50% B. Workplace of Choice Overall 80% of Support Unit employees say that they enjoy working at UMKC % of Goal Achieved 25% C. Program Efficiency Department's Operating Expenses compared to defined national benchmarks or indexes % of Goal Achieved 25% for units/departments operating costs per Benchmark TOTAL 100%

16 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Allocation of Future Year New State Appropriation Funds Future Year New State Appropriation $$ Designated Programs & New Initiatives

17 UMKC Requests for New Spending Initiatives Updated as of July 25, Each year, the campus will develop criteria on which new program initiatives will be evaluated and new funding awarded. The criteria will be approved by the Executive Cabinet and distributed to units by September 1 of each year. Based on these criteria, units are encouraged to submit requests for new funding. Requests for designated program initiatives are due to the Campus Budget Office by October 1. The source of the additional funding will be new state appropriations or the Chancellor s Innovation Fund. The funding is designed to provide the means to support new initiatives or new programs that will further the mission of UMKC. The submission requests should include the following, as applicable: I. Designated Programs/Special Initiatives These are enhancements to existing programs or the creation of new programs that extend UMKC s ability to fulfill its mission and critical priorities. II. Staffing enhancement requests As the mission of the campus evolves, staffing needs change across campus. Through this process, units are able to request new positions faculty or staff in order to continue to meet their mission or unit plan. All new positions must be justified with supporting documentation outlining workload, market demand and salary projections. III. Technology Plan- Instructional and Non-Instructional Major improvements to the information infrastructure of a unit must demonstrate connectivity to the units mission and action plan, UMKC s mission and strategic priorities, and also to the campus technology plan. New spending requests in this area should be congruent with the technology strategy of the campus; requests for this type of new spending will be reviewed by the campus Technology Strategy Committee. New spending request submissions should outline a three-year budget. In all spending requests, the following should be considered and included as applicable: 1. Personnel costs (salary and benefits) of any new faculty or staff, full-time or part-time needed for this program to operate. 2. Expense and Equipment budgets should include planned expenditures broken into the following categories. i. Operating Expenses This is the portion of the budget used for office supplies, meeting expenses, business travel, maintenance on equipment and other expense items used to support daily activities of a unit. 1. Operating expenses due to program enhancements such as new building openings, program expansions, or additional staff and faculty; 2. Planned business meetings, conferences or professional development; 3. Maintenance on equipment 4. Professional consulting services needed for staff development, feasibility studies or facilitating. 5. Rental expenses need to include any foreseeable increase in lease agreements. 6. Maintenance, both custodial and grounds, for newly opened facilities. 7. Utilities especially on newly opened facilities as well as current facilities with projected cost inflation.

18 UMKC Requests for New Spending Initiatives Updated as of July 25, ii. Equipment purchases of small equipment (unit price of less than $5,000) should also be planned. Larger equipment items with a unit price greater than $5,000 are included in capital equipment purchases. 1. Life cycle replacement of small office items such as fax machines, scanners, desk top computers and copy machines. 2. Office equipment needed for new programs, new offices and new employees should also be included in the planned budget. 3. Major Capital Equipment purchases (unit value greater than $5,000) should also be planned in detail. i. This would include life cycle replacement for items such as vehicles, lab equipment, and other equipment. ii. Purchases of equipment to outfit a new facility, classroom or program. iii. Maintenance on current and new equipment. New spending initiatives will be evaluated on the following draft criteria. As the University of Missouri system goals and campus strategic priorities evolve, these criteria could change. Each year, the Executive Cabinet will review and revise the criteria as needed, and present these to the campus by September 1. The units will have until October 1 to submit requests for funding of new initiatives. After a review by the Chancellor and Executive Cabinet, preliminary new funding allocations will be announced by December 1, pending the finalization of state appropriation funding. Criteria for Evaluation A. Contribution to UMKC s vision: a community of learners making the world a better place, creating new standards in higher education. - Describe the new spending program or new initiative and what impact does the new spending initiative have to the contribution of UMKC s vision? - Describe the extent to which the process for accomplishing the project demonstrates UMKC s values. How will the project implementation process be collaborative, accountable, etc. B. A clear statement of intended outcomes with some ability to measure those outcomes. Show the linkage of the intended outcomes/performance measures to one or more of UMKC Goals. C. Illustrate the centrality of the new spending initiative to one of the four mission areas of UMKC. How and why is the new spending proposal central to one or more of: - Lead in the Life and Health Sciences - Deepen and expand Strength in the Visual and Performing Arts; - Develop a Professional Workforce; Collaborate in Urban Issues and Education - Create a Vibrant Learning and Campus Life Experience.

19 UMKC Requests for New Spending Initiatives Updated as of July 25, UMKC 2006 Goals and Measures Aligned with new UM System Goals - (May 11, 2004 Draft) I. Access to Learning: Enable students to achieve their full academic potential and to cultivate their personal development. Strategic Goals: 1. UM should grow its overall enrollment by 10,000 students over the next five years, with diversity that reflects that of the state of Missouri and with priority on graduate and professional students. 2. UM should be the first choice for Missouri s top students. 3. UM should develop tuition and financial aid policies that support access and affordability for the citizens of Missouri. 4. UM should lead the state in student retention and graduation rates. 5. UM alumnae should be recognized leaders in their respective careers. UMKC Goal 1 We attract, nurture, and develop responsible community leaders. Enrollment management and diversity-in-action project goals are achieved, which include ranking among the top universities in graduating students of color and first generation college students. 80% of students and recent alumni say they are satisfied with their UMKC experience on selected NSSE items, the "Campus Aliveness Index," "Alumni Career Satisfaction and Citizen-Leader Inventory," or other approved satisfaction inventories. 85% of businesses/organizations who employ/engage UMKC alumni say UMKC graduates are citizen-leaders, as reported on the "Employer Follow-up of Career Performance and Citizen-Leader Survey". II. Academic Achievement and Quality: Achieve a nationally competitive position in research, scholarship, and academic programs in selected areas consistent with each campus mission. Strategic Goals: 1. UM should invest in selected programs that will raise its national standing. 2. UM should hire and retain an additional 10 National Academy faculty over the next three years. 3. UM should achieve doctoral-research extensive status for UMKC, UMSL and UMR and support enhancement of UMC s status as an AAU institution. 4. UM should become a national leader in life science research. 5. UM should enhance its interdisciplinary research and instructional programs. UMKC Goal 2 We are a national leader in scholarship and creative activity. Sponsored program awards reach $60 million per year, of which $40 million are Federalfund awards. Ten academic programs are ranked by national standards in the top ten. Five academic support programs are ranked by national standards in the top ten.

20 UMKC Requests for New Spending Initiatives Updated as of July 25, UMKC 2006 Goals and Measures Aligned with new UM System Goals - (May 11, 2004 Draft) III. Community-University Engagement: Set new standards of quality for community-university engagement that will constitute a national model of service and outreach to the state, the nation, and the world Strategic Goals: 1. UM should coordinate academic year calendars across the campuses to permit electronic course delivery. 2. UM should collaborate and partner within and without the System. 3. UM should increase public support for the state s public research university. 4. UM should continue to operate and maintain a system network of providers to improve the delivery of quality, cost effective health care services to the citizens and residents of the State of Missouri and enhance the availability of and access to health care services. 5. UM should promote innovation and economic development through private-public partnerships that identify critical workforce needs, promote technology transfer and commercialization, address the research and development needs of Missouri industry, and enhance the entrepreneurship capacity of the state. UMKC Goal 3 We are an essential community partner and resource. 90% of community leadership says UMKC is one of the top 5 community assets. 50% of UMKC faculty, students and staff, respectively, engage in public scholarship, communitybased or service learning, or community service IV. Valuing People and Creating a High-Performing Organization: Within a high-performing organization, develop an eminent faculty and highly talented staff who are engaged, productive, diverse, and committed to achieving the University s vision. Strategic Goals: 1. UM should strengthen accountability for outcomes through its performance leadership process. 2. UM should improve the compensation of faculty, and the benefits for graduate and professional students. 3. UM should create additional opportunities to support faculty and staff in their respective responsibilities. 4. UM should recruit and hire senior faculty within its recognized peer group or beyond. 5. UM should recruit and hire junior faculty primarily from AAU institutions. 6. UM should competitively compensate and offer development opportunities to maintain a highly competent staff. UMKC Goal 4 We are a workplace of choice. 80% of employees say they enjoy working at UMKC, as indicated by a rating of 4 or higher on a scale of 1 to 5 on the workplace survey. 50% of our applicants cite our vision and values as one of their primary reasons for applying. The goals of the diversity-in-action project are achieved.

21 UMKC Requests for New Spending Initiatives Updated as of July 25, UMKC 2006 Goals and Measures Aligned with new UM System Goals - (May 11, 2004 Draft) V. Improving Core Processes: Develop and maintain effective and efficient academic and administrative processes that support the University s vision and create value for constituents Strategic Goals: 1. UM should promote and achieve greater academic and administrative efficiencies throughout the university system. 2. UM should build the highest quality information technology infrastructure that will meet the instructional and research requirements of faculty and students. VI. Developing and Managing Resources: Establish and maintain the financial and physical resource base required to support the University s vision and sustain organizational improvement Strategic Goals: 1. UM should permit different tuition levels among the campuses to allow for market variance, program differences and resource requirements. 2. UM should improve the physical plant and infrastructure throughout the entire system. 3. UM should secure $300 million in external research funding annually. 4. UM should expand its private fund-raising campaigns with a goal of reaching the $1.0 billion mark over the next five years. 5. UM should improve the financial performance of its hospitals and clinics. UMKC Goal 5 We have the resources to fuel our vision. Our composite financial health index is 7.5 on a 10-point scale. Our revenue growth and diversification goals for financial freedom are achieved. Our resources are allocated to priorities such that our core programs/services have their resource needs fully met and $2 million are available annually for innovation.

22 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Revenue Allocation Model Next Steps For Year 1- Just Do It October/November/ December Campus discussions on proposed model attributes January/February Finalize revenue allocation model for FY 2006 budget planning Budget Advisory Committee continues revenue allocation discussions Review of modeling assumptions with Schools/Units Designation of proposed new initiatives and designated priorities Communicate plan to campus Release of New Revenue Allocations for FY 2006 Budget March to May Develop future year (FY 2007) performance criteria measures and reporting systems Develop Year 1 (FY 2006) allocation criteria for Block Allocation Process Future Year Calendar Highlights of Major Changes/Improvements August SCH Modeling and certification October Requests for Designated Spending Priorities and New Funding Initiatives Performance measures/criteria finalized December Communication/Approval of Designated Funding Priorities Preliminary Release of Funds Tuition Fee Allocation Block Grant Allocation & and Incentive Funding

23 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, UMKC PROPOSED Annual Budget Planning Cycle Milestone Date Department Task/Activity: Draft SUMMER Aug. 1 College/School Student Credit Hour Allocations Certified (Allocations based on prior year SCH/FTE/Major student data) Sept. 1 Updated Criteria and Submission Requirements distributed for Designated Programs Initiatives FALL Oct. 1 Department/Unit Submission of Budget Requests for Designated Program Initiatives Oct. 1 Oct. 15 Nov. 15 Dec. 1 Dec. 1 Dec. 1 Round I Chancellor Innovation Fund Awards Due State Appropriation Allocation Criteria Measures Validated Student Activity/Housing Fees/ Professional Tuition Fee and Graduate Fee Cluster Revenue Due New: Chancellor/Executive Cabinet approves New Spending Requests for Next FY PRELIMINARY Department/Unit Block Allocations State Appropriations Awards made PENDING State Appropriation Funding Levels & PROPOSED Tuition Fee Levels Colleges/Schools/Departments Revenue Forecasts for Non-Operating Funds (Auxiliary & Service Operations and Restricted/Gift Funds) WINTER Jan. 5 Revenue and Expense Planning Assumptions Presented for Cabinet Discussion Revenue Assumptions for Tuition Revenues Revenue Assumptions for Student Activity/Housing Fees Expense Assumptions for Personnel/Benefits Revenue and Expense Forecasts for Operating Fund based on Preliminary Estimates Jan. 15 February Preliminary Release of General Fund Allocations Tuition Fees based on New Revenue Model Block Allocation State Appropriations (Up to x% of GRA Differential) Incentive Plan Criteria Allocation (Gap Funding) Campus Budget Forums/Town Hall Meetings Preliminary Multi-Year Forecasts and Highlights of Revenue Allocation Model Designated Initiatives for Future Year Budget SPRING Mar. 1 Round II Chancellor Innovation Fund Awards Due Mar. 15 Late March Mid-April Late May Final Release of General Fund Allocations Board Approves Tuition Revenues All Department Budgets Completed/Finalized in System Board Finalizes/Approves State Appropriation Allocations to Campuses

24 UMKC Budget Advisory Committee January Preface: The primary accountability for the financial integrity of the University of Missouri Kansas City campus resides in the Office of the Chancellor. The Chancellor, as the Chief Executive Officer of the campus, has final administrative responsibility for financial planning, revenue development, and allocation of resources to the various academic and administrative entities of the campus. Purpose of the Budget Advisory Committee: The Budget Advisory Committee is an advisory committee that advises the Chancellor on matters related to budget planning and policy. The Budget Advisory Committee also has responsibility to assist the Chancellor in ensuring that the budget planning process and resource allocation decisions occur in an environment that encourages open honest communication, promotes opportunities for input from the campus stakeholders, and provides clear concise and easily understood information regarding the University s budget. The Budget Advisory Committee s role and responsibilities shall not supersede or replace the day-to-day financial management of the University, which has been delegated by the Chancellor to the Office of the Vice Chancellor for Administration and Finance. The specific charges to the Committee are to: 1. Review and advise on a proposed resource allocation plan for both academic and support unit that clearly support UMKC s mission and strategic goals. 2. Review and advise on a proposed framework for the annual reporting on performance measurement system for both academic and support units to ensure accountability in the performances of the units in achieving UMKC s strategic plan. 3. Review and advise on a proposed framework and structure for submission of new resource and/or program funding requests. All new funding initiatives and program priorities need to include a realistic proposed budget and established priorities that are aligned to UMKC s strategic goals. 4. Advise the Chancellor on the annual revenue allocation process to ensure that revenues are aligned to support campus vision and values, and that the budget process aligns financial resources to the UMKC s mission and strategic goals. 5. Ensure that relevant budget information and background materials are made available to campus constituents with responsibility for advising on planning and budgeting issues. 6. Review of annual revenue estimates and spending assumptions and advise the Chancellor on their appropriateness. 7. Review interim financial and program performance report of the University including review of annual operating budget, financial statements and performance measures in meeting UMKC stated goals and objectives. 8. Other budgetary reviews or financial analyses as designated by the Chancellor.

25 UMKC Budget Advisory Committee January Prerequisites for Membership Appointment: Members of the Budget Advisory Committee will have a demonstrated understanding and knowledge of the University of Missouri System and UMKC campus budget processes and financial planning methods. Staff training and development will be emphasized to ensure the Committee members develop the understanding and knowledge of the budget process and financial planning methods. It is key that Advisory Members are committed to the University and its strategic goals. Rotation of committee appointments will be based on the discretion of the Chancellor and also based on the willingness of the representatives to serve and exert the time and commitment to provide meaningful input and represent the interests of the UMKC stakeholders and community. Communication and Relationship to Existing Campus Committees and Offices: 1. The Budget Advisory Committee should meet at least quarterly. 2. Budget Advisory Committee should interact regularly with the Chancellor s Cabinet and Extended Cabinet, as well as the Faculty Senate, Staff Assembly and Student Government Association to facilitate the flow of information among all campus stakeholders. 3. The Budget Advisory Committee should present recommendations to the Chancellor based on input solicited from campus stakeholders as well as the Committee s own educated recommendations. 4. The UMKC Office of the Vice Chancellor for Administration and Finance will coordinate efforts to ensure the regular and timely provision of financial information to the Budget Advisory Committee and will provide the staff support for the Committee. 5. The Office of Institutional Research on behalf of the Chancellor s Office will be responsible for the coordination of the regular and timely submission of unit performance measurements and reporting on the campus/unit progress in meeting UMKC s five strategic goals.

26 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, PREAMBLE BUDGETING FOR EXCELLENCE Budget Advisory Committee The Budgeting for Excellence Committee was formed as a result of a common desire for the redevelopment of a budget process that supports the vision and values of the University of Missouri Kansas City campus. A team of ten university stakeholders, ranging from faculty to support staff to campus administrators, served as members of this committee from May 2001 to August In its final report published in August 2002, the Budgeting for Excellence Model encompass the following six attributes that describe the basic characteristics of good budgeting: Vision & Value Driven: The budget process clearly links funding to support the state University vision and values Strategic: The budget process represents a multiyear, realistic plan identifying current and future needs and opportunities Accountable: The budget process supports accountability by aligning authority and responsibility to Units for decisions made Open: The budget process is understandable, allowing for input from all stakeholders, with no hidden agendas Responsive: The budget process allows for change One of the first recommendations and best practice elements of The Budgeting for Excellence Committee was that UMKC should identify opportunities for stakeholder input. Key to this recommendation was that UMKC should establish a Budget Advisory Committee to provide an avenue for input from faculty, staff, administration and students. As prescribed by the University of Missouri System collective rules and regulations, the Committee should be charged with the responsibility to advise on educational planning, appraisal of resources needed and the allocation or reallocation of resources. The Budget Advisory Committee was envisioned to assist the Chancellor in ensuring that the budget planning process and resource allocation decisions occur in an environment that encourages open honest communication, promotes opportunities for input from the campus stakeholders, and provides clear concise and easily understood information regarding the University s budget. The Budgeting for Excellence Committee recommended that a campus Budget Advisory Committee be set up to advise the Chancellor and the composition of the committee be made up of the following constituents totaling 19 members: Six members from the University faculty; two members from the Faculty Senate; One member of the Staff Assembly; Three Academic Deans; One representative of the Student Government Association; and Six members representing administrative support units and functions. Following the framework of the Budgeting for Excellence report, including its guideline for Advisory Committee constituents, the Chancellor has recently created the first BAC committee comprising of the following members:

27 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, CURRENT BUDGET ADVISORY COMMITTEE (BAC) MEMBERSHIP: Assignment: Name Member Term DEANS: FACULTY: Bryan Le Beau Betty Drees Homer Erekson Bob Weirich Deep Medhi VACANCY - Cathy Carroll Thad Wilson Michelle Beattie 1 year Jeff Thomas 1 year 3 years 2 years 1 year 3 years 3 years 2 years 2 years FACULTY SENATE: Jim Durig Gary Ebersole 1 year 3 years SUPPORT UNITS: Eric Vestal Pam Becker * Ed Ellyson Carla Wilson Bill Phillips Patty Cahill 3 years 3 years 2 years 2 years 1 year 1 year STAFF ASSEMBLY: Mark Johnson 1 year STUDENT GOVERNMENT ASSOCIATION: Tom Kernan 2 years * Original appointment of Mary Lou Hines who assigned to Pam Becker, Manager of Business/Fiscal Operations for Provost Office

28 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, SCHOLARSHIP DISTRIBUTION Academic Year Allocation of Academic Unit Directly Tied to Academic Unit Balance Unassigned Scholarships Total Allocation Arts and Sciences $ 3,748,852 $ 241,627 $ 3,990,479 Biological Sciences 410,299 22, ,035 Business 1,414,733 84,637 1,499,370 Conservatory of Music 1,920, ,216 2,022,781 Computing and Engineering 1,316,061 72,585 1,388,646 Dentistry 2,869, ,957 3,019,089 Education 1,059,563 68,225 1,127,788 Graduate Studies 867,826 45, ,275 Law 1,109,922 62,624 1,172,546 Medicine 2,844, ,105 2,998,356 Nursing 444, ,594 Pharmacy 469, ,694 TOTAL in Academic Units $ 18,475,483 $ 1,054,170 $ 19,529,653 Intercollegiate Athletics $ 1,666,700 $ - $ 1,666,700 TOTAL Scholarships $ 20,142,183 $ 1,054,170 $ 21,196,353

29 Budgeting for Excellence Presentation to UMKC Faculty Senate on November 16, Academic Year Scholarships and Waivers Individual Scholarships with Activity Exceeding $100,000 $$ Amount % of Total Scholarships Administrative Waiver 115, % Arkansas Dental N.R. Scholarship 124, % Chancellor Non Resident - International 1,480, % Chancellor Award Non Resident DF 103, % Chancellor Minority Non Resident 1,182, % Chancellor Non Resident Award 1,332, % Chancellor Non Resident BA/DDS 864, % Chancellor Scholarship Award 1,110, % Chancellors Transfer Award 198, % Curator Freshman Scholarship 103, % Curators Renewal Scholarship 340, % Exchange Partner Award 117, % GTA Award 6 Hours 506, % GTA Award 9 Hours 110, % GTA Non Resident Waiver - A&S 209, % GTA Non Resident Waiver - Pharmacy 121, % GTA Non Resident Waiver - SCE 153, % International CC Transfer 125, % K.C.A.S.E. 134, % Kansas Exchange - Non Resident 1,086, % KC Urban Teac Fel Ed Fee 151, % Med School Waiver Ed Fees 796, % Med School Waiver Non Resident 129, % Mo Tax 2,232, % Non Resident Waiver - Doctorial Only 245, % Non Resident - Law 167, % Part-Time Non Resident Midwest Exchange 253, % Part-Time Non Resident 1,854, % Part-Time Non Resident Dental , % Special Chancellor Non Resident 433, % UMKC Freshman Grant 277, % UMKC Grant 498, % UMKC Tax Waiver 404, % OTHER Scholarships (Less than $100,000 in Activity) 1,353, % Total Scholarships Directly Tied to Academic Units $ 18,475, % Total Scholarships - General Allocation Distribution $ 1,054, % Intercollegiate Athletics $ 1,666, % TOTAL SCHOLARSHIP ACTIVITY $ 21,196,353