What Is Budgeting? Making Decisions that Distribute Resources to Enable Actions Dr. Richard L. Brown, Jr. Executive Vice Chancellor
The Budget The budget is the device by which an organization: Carries out its plans Signals its priorities The primary mechanism to create incentive for positive change. Planning is typically conducted at the strategic level. Budgeting is typically focused at the operational level.
Approach to Strategic Budgeting Develop a stronger student-centered approach. Become more responsive to employer needs. Address the particular needs of underserved clients: Minorities Geographically remote areas Academically poorly prepared Improve retention and graduation rates. Focus on organizational mission.
Linking the Budget to the Strategic Plan The budget structure should explicitly reflect the areas of responsibility of strategic level decision makers. Base/Continuation Expenditures Adjusted for Inflation Strategic Planning Initiatives Contingency Reserve Funds Cost Going Forward Items Asset Maintenance Funds Revenue Creation/Deletion Changes in asset structure The budget process requires established guidelines to each component prior to initiating unit level budget building.
Evaluation of the Budget To evaluate the budget, ask the following questions: What about changes in the revenue and operational structure? How will staffing patterns change? How will materials acquisitions be affected? How will the stock of instructional and operating equipment change?
Evaluation of the Budget What about asset/plant maintenance? What is the relationship between current expenditures and renovation and renewal of the physical plant? What is the replacement value of plant? What is rate of replacement of equipment? What about energy management? Capital Expenditures Master Planning
Evaluation of the Budget What about operating expenditures? Do you have a viable compensation plan? What is the ratio of personnel development market value and equity to compensation? What is trend in expenditures on curriculum development and program expansion? What level of financial reserves is being maintained? How effective is the institutional investment in student financial aid and scholarships?
Evaluation of the Budget To further evaluate the budget, ask questions regarding: What is the evidence state/system priorities are being achieved? What is the evidence institutional priorities are being achieved? Is the institution fulfilling its mission? What about the contingency fund? How large is the contingency fund relative to the operations budget?
The Focus of Budget Decisions Assets What kinds will we have/own? In what quantities/how many? Of what quality? At what prices? What are assumptions about levels of utilization? Consumables Utilities, insurance, supplies, etc. In what quantities? At what prices? Revenues Diversification of funding stream In what amounts? From what sources? Budget Allocations To which units? To what ends? The basis of accountability.
Strategic Planning Priorities & Themes Characteristics Generally, are broad institutional issues that cannot be addressed by a single unit. Are long-term and cannot be resolved in a single year. Require responses through basic institutional processes and are not programmatic add-ons. Require broad based participation.
Strategic Planning Priorities & Themes Planning Making decisions about organizational priorities that specify what changes in intentions, competencies, or behavior the organization will pursue. It is the mechanism through which organizational values and methods of identifying them are affirmed. Aligns resources to decisions. Ensures efficiency and effectiveness. Planning must result in decisions. Planning is fundamentally a change process.
Basic Mission Clientele Program/Service Mix Comparative Advantage/ v. Competitive Advantage Assets Objectives Basic purposes of the enterprise and its guiding principles for behavior. Target audiences of the institution. Program offerings and priorities of the institution. Differential advantage sought over other organizations engaged in similar activities. Changes needed in human, physical, information or intangible assets of the enterprise. What the organization must accomplish in order to move from the existing to desired state of affairs.
The Management Cycle in a Public Institution
FY 15 E&G Original Budget - Revenue Grants & Contracts, $453,856, 0% Sales & Services, $4,787,672, 4% Other Sources, $237,200, 0% State Appropriations, $38,443,181, 27% Total $142,520,554 Tuition & Fees, $98,598,645, 69%
FY 15 E&G Original Budget - Expense Mandatory Transfers, $774,165, 0% Scholarships & Fellowships, $12,322,509, 9% Non-Mandatory Transfers, $1,176,558, 1% Op/Maint Physical Plant, $18,996,112, 13% Instruction, $62,041,250, 44% Total $142,453,974 Institutional Support, $11,070,543, 8% Student Services, $22,053,970, 15% Academic Support, $9,817,880, 7% Public Service, $2,310,559, 2% Research, $1,890,428, 1%
FY 09-15 New Recurring Budget Allocations Student Development, $617,426, 3% FOIT, $2,133,555, 10% Athletics, $161,672, 1% Comm & Marketing, $467,664, 2% Institutional, $6,424,822, 30% Total $21,556,628 Academic Affairs, $11,353,361, 52% Chancellor's Office, $398,128, 2% Allocations don t include ATB pay raises, automatic scholarship increases, new fee revenue or non-recurring funds.
$3,500,000 $3,000,000 FY 09-15 Enrollment Growth Allocations $3,258,750 Total $6,851,844 $2,500,000 $2,000,000 $1,856,917 $1,500,000 $1,000,000 $500,000 $- $504,114 $549,049 Academic Affairs $169,348 $150,000 $0 $25,000 $0 $50,000$0 FOIT Recurring Student Development Athletics Non-Recurring Comm & Marketing $288,666 Institutional In addition to the above, funds have also offset base budget reductions and scholarship cost since FY 2009.
$30,000 FY 08-15 Undergraduate Tuition & Fees $25,000 $20,000 $15,000 $15,024 $15,870 $16,954 $18,298 $20,251 $21,558 $22,762 $24,256 $10,000 $5,000 $5,062 $5,310 $5,656 $6,040 $6,718 $7,212 $7,555 $8,138 $- 2008 2009 2010 2011 2012 2013 2014 2015 In-State Out-of-State
$30,000 FY 08-15 Graduate Tuition & Fees $25,000 $21,326 $22,696 $23,967 $25,534 $20,000 $15,000 $15,816 $16,710 $17,852 $19,272 $10,000 $5,000 $5,854 $6,150 $6,554 $7,014 $7,793 $8,350 $8,762 $9,416 $- 2008 2009 2010 2011 2012 2013 2014 2015 In-State Out-of-State
FY 08-13 Expense Per Student $14,000 $12,000 $12,606 $12,307 $12,333 $13,157 $12,452 $12,789 $10,000 $8,000 $6,000 $5,755 $5,137 $5,036 $5,207 $4,000 $3,563 $3,549 $2,000 $- 2008 2009 2010 2011 2012 2013 Expense Per Student (E&G Total) Expense Per Student (State Appr. Only)
$7,000,000 FY 08-14 E&G Fund Balance $6,000,000 $5,389,367 $5,549,743 $5,339,000 $5,700,000 $6,100,001 $5,000,000 $4,000,000 $3,874,488 $4,374,488 $3,000,000 $2,000,000 $1,000,000 $- 2008 2009 2010 2011 2012 2013 2014
FY 08-14 Notes & Bonds Payable $60,000,000 $50,000,000 $47,205,924 $46,895,157 $47,392,967 $47,843,238 $46,067,087 $48,380,824 $40,000,000 $39,136,683 $30,000,000 $20,000,000 $10,000,000 $- 2008 2009 2010 2011 2012 2013 2014
FY 08-15 Faculty Count 700.00 600.00 500.00 400.00 300.00 571.92 560.46 531.43 538.95 510.42 474.15 465.78 478.00 454.00 461.00 400.00 414.00 422.00 403.00 334.00 296.00 309.00 314.00 296.00 308.00 315.00 200.00 100.00 0.00 0.00 0.00 0.00 2008 2009 2010 2011 2012 2013 2014 2015 Full-time Faculty (HC) Part-time Faculty (HC) Full-Time Equivalent (FT & PT)
FY 08-15 Staff Count 350.00 300.00 288.00 281.50 279.00 274.00 275.00 271.25 288.00 305.00 250.00 200.00 150.00 100.00 156.96 141.98 124.94 128.78 131.06 132.30 107.35 81.47 79.93 84.31 87.36 91.59 173.77 177.03 98.98 108.67 50.00 0.00 2008 2009 2010 2011 2012 2013 2014 2015 Administrator Professional Clerical/Tech/Maint.
FY 08-14 Physical Plant Square Footage 2,700,000 2,652,604 2,600,000 2,500,000 2,466,872 2,400,000 2,364,919 2,364,919 2,407,655 2,407,655 2,300,000 2,244,541 2,200,000 2,100,000 2,000,000 2008 2009 2010 2011 2012 2013 2014
FY 08-14 Residence Hall Occupancy Rates 3500 3146 3090 3146 3090 2949 2957 2979 2979 3000 2801 2747 2801 2779 2846 2846 2500 2000 1500 1000 500 0 147 0 0 38 65 126 36 2008 2009 2010 2011 2012 2013 2014 Capacity Occupancy Overflow Housing