1.6 Fiscal Resources. The school shall have financial resources adequate to fulfill its stated mission and goals, and its instructional, research and service objectives. a. Description of the budgetary and allocation processes, including all sources of funding supportive of the instruction, research and service activities. This description should include as appropriate, discussion about legislative appropriations, formula for funds distribution, tuition generation and retention, gifts, grants and contracts, indirect cost recovery, taxes or levies imposed by the university or other entity within the university, and other policies that impact the fiscal resources of the school. Responsibility Centered Management Indiana University and the SPH operate according to the budget philosophy of Responsibility Centered Management (RCM). Under this system, the SPH and its academic departments possess considerable budgetary autonomy and fiscal responsibility. The RCM model is a decentralized budgeting model that produces incentives for fiscal growth and creativity among and within schools (responsibility centers [RC]). Such incentives are less likely to exist under traditional higher education budgeting systems. The RCM model also requires that schools and their underlying departments become more proficient in their fiscal administration and planning capabilities. The direct realization of RCM enables schools to take greater ownership of their fiscal affairs resulting in greater effectiveness to address important programmatic and operational issues, but also greater financial risk and responsibility to carry out these functions. School of Public Health General Fund Base Budget A unique feature of RCM is that schools are allocated virtually 100 percent of income streams directly from the campus administration (state appropriation, tuition revenue and related fees), and indirect cost income into an account identified as the general fund base budget. The operations of the IU SPH are primarily funded through its general fund base budget as depicted below for the 2013-2014 fiscal year. 2013-2014 General Fund Base Budget State appropriation $10,758,704 Tuition revenue and Related fees $42,857,206 Indirect cost income $997,500 Other income $5,200 Bloomington Campus assessments -$25,146,163 Total $29,472,447 The Dean of the School of Public Health ultimately determines department base budget allocations, in consultation with the departmental chairpersons, and the School s Committee on Budget and Planning. Academic departments within the SPH each manage a portion of the school s general fund operating budget via their own operating account system. The determination of the bottom-line allocation in each of the departmental accounts reflect a combination of factors which include, but are not limited to: A respective department s share of school credit hours generated; Special needs and circumstances; Precedence of funded line-items due to historical incremental budgeting practices. In fiscal year (FY) 2013-2014, the general fund base budgets by department were as follows: 55
2013-2014 General Fund Base Budget by Department Applied Health Science $6,962,071 Environmental Health $1,193,798 Epidemiology and Biostatistics $1,564,290 Kinesiology $6,627,938 Recreation, Park, and Tourism Studies $3,585,537 School Level Support by Dean s Office $9,538,813 Total $29,472,447 Non-General Fund Budgets In addition to the school s general fund budget, several non-general fund budgets exist to support other academic and enterprise activities. These include faculty research, continuing education activities supported by participant fees related to non-credit instruction and professional development programs; programs funded by outside entities used specifically for the benefit of the public; and funds allocated for specific program purposes such as those within institutes and centers among others. For the fiscal year 2013-2014, the school managed a total of 336 non-general fund accounts totaling approximately $14,805,855. Assessments Under Indiana University s RCM budgeting system, schools (or RC) are taxed annually. These taxes provide funding to support units on campus that do not generate tuition, state appropriation, and indirect cost revenue. These taxes are called assessments. In FY 2013-2014, the school was assessed $25,146,163. Assessments are remunerated at the school level, and are not transferred to the department or program level. Each school or RC is assessed and pays such assessments annually according to four area including: 1) total square footage of space, 2) total FTE of tenure-eligible faculty, 3) total FTE of all (non-tenure) employees, and 4) total credit hours produced. Grants and Contracts Indiana University maintains the Office of Research Administration, which works closely with school officials and individual principal investigators to ensure a comprehensive process for all actions related to extramural funding. For any sponsored program activity, a formal proposal must be routed and approved by the department, school and the campus research office before any commitments are made by the University. The SPH serves as the primary administrative unit that provides support to faculty during all activities associated with the submission of proposals and the management of awards. The school s Director of Contract and Research Administration is specifically charged with grant administration responsibilities, including the submission of proposals, awards and pre- and postaward contracts. This individual reports to the Associate Dean for Research and Graduate Studies and assists and communicates with external funding agencies on a number of issues including subcontract administration, when applicable. The director helps to resolve conflicts and consults with a number of internal sources, including the Office of Associate General Counsel. The director also utilizes all relevant electronic systems in the submission and receipt of proposals and awards, advises faculty/staff of funding opportunities, and acts as a liaison with other university offices and external agencies. 56
The Office of Research Administration is responsible for preparation of budgets, cost-sharing, forms and necessary internal and external documents. This office serves as the primary school contact for all contracts and grant activities. Office staff interpret and implement important notices regarding agency guidelines and correspondence and are charged with oversight for school grant accounts, including the assurance that funds are spent according to university, state and federal requirements. They are responsible for RC-level record keeping (tracking expenses, reconciliation of IU accounting statements, generation of monthly summary reports) and grant accounts. Additionally, they oversee the processing of financial information to accounts, resolve errors and discrepancies. They are involved in the review and approval of departmental financial transactions. The Director of Business Affairs and Budget and the Director of Contract and Research Administration are regularly engaged in complex financial administrative duties associated with federal, state, and local government agency contracts and grants. In addition, grants and contracts are awarded from business and industry; foundations and other nonprofits; educational institutions; and other organizations. These two directors work closely with the Office of Research Administration (ORA) on the submission of any external contract or grant proposal. These staff review, analyze, and interpret legal terms and conditions on both awards and sub awards. They help resolve conflicts, facilitate contract and grant revisions, communicate with campus officials, legal personnel, SPH faculty and staff, and other administrative and programmatic units within the School. They regularly monitor expenditures, interpret agency policies and award documents to ensure compliance, provide guidance on allowable expenses, and close accounts. They advise faculty and staff on proposal processes, budgeting policies, award terms and conditions, and financial policies and procedures. Indirect Cost Recovery At Indiana University, the term Facilities and Administrative Recovery (F&A) is used in all policies and procedures related to funds that are typically referred to as indirect costs. Full F&A cost recovery is to be included in all sponsored program proposals. The F&A cost rates are set through negotiations with the federal government to recover actual expenses incurred by the university. Exceptions to the policy are made for certain proposals to the State of Indiana and proposals where the agency guidelines state that no F&A cost or less than full F&A cost will be paid. Non-federal organizations whose guidelines will not permit F&A cost will be reviewed to determine if some of the F&A items might be included as direct cost. F&A will be charged at the appropriate on- or off-campus rate or a combination of the two depending on where the project is performed. A project must be off-campus for at least one semester to receive the off-campus rate. The FY2014-2015 F&A rate for research projects is 56%; the rate for instruction is 47.5%; and the rate for projects focused on service activities that have extramural funding is 32%. Exceptions to the policy are to be initiated by the respective department, and approved by the school/rc, Indiana University Bloomington Office of Research Administration, and the Assistant Vice President for Research. Each RC at Indiana University establishes its own policies for the internal allocation of funds resulting from F&A cost recovery. At present, 2.5% is retained at the University level and the remainder is allocated to the school (97.5%) where 50% of the school s allocation is retained at the dean s level and 50% is allocated to the home department of the principal investigator. At the department level, principal investigators negotiate with their respective department chair 57
regarding the extent to which their respective shares of F&A funds can be allocated specifically to help cover the needs of an individual project. Gifts and Other Contributions The School of Public Health s Office of Development and Communications serves as the liaison office to the Indiana University Foundation to facilitate ongoing relationships with alumni, friends, and corporate/foundation partners of the school in the area of private fundraising. The Office helps to ensure the school s growth and provides assistance to those who are interested in making financial contributions to the school. It secures private support, organizes alumni programming, and communicates with alumni, donors, and friends through face to face meetings, special events, e-newsletters, the Dimensions magazine, and the school s Annual Report, among many other vehicles. Private gifts to the school occur in numerous ways. Annual fund gifts support the critical need for scholarships, modern technology and equipment, and research opportunities for students and faculty. Endowed gifts are an investment in the future. These gifts, whether through cash, securities, life insurance, bequests, or charitable annuities and trusts, provide critical support in perpetuity. A named faculty position, a lecture series, undergraduate scholarships, and graduate fellowships are all made possible through endowments. Trends in Student Support Expenditures The student support lines in the budget tables represent actual expenditures for each particular fiscal year. The student support expenditures reflect the actual costs of funding assistantships or fellowships during a given fiscal year. The amount will fluctuate from year-to-year based on a number of factors, including: a) the number of students in a given cohort, b) the number of students that request an assistantship, and most importantly c) the composition of a given cohort with regard to the number of students in that cohort being classified as in-state or out-of-state for tuition purposes. In a given year, if the combination of the number of students requesting an assistantship is reduced or if the balance of in-state versus out-of-state is more weighted toward in-state, it will result in a reduction in our student support expenditures for that year; not necessarily the number of students supported. Graduate student funding for 2013-2014 is described below: Masters Student Assistantships (per recipient) as of July 1, 2014 In-state Out-of-state First Year $23,415 $43,663 Doctoral Student Assistantships (per recipient) as of July 1, 2014 In-state Out-of-state First Year $23,920 $43,970 Second Year $24,320 $44,370 Third Year $24,820 $44,870 Trends in State Appropriations State appropriation revenue has peaked in terms of total purchasing power dollars provided by the State of Indiana. This continues a trend that is a national phenomenon, and will likely continue in the foreseeable future. The School s state appropriation for fiscal year 2012-2013 was $10,644,174 and $10,758,704 for fiscal year 2013-2014. This represents only a modest increase from the past years state allocations having the effect of placing greater reliance on credit hour tuition-based income, specific course-related income, grant and contract income, 58
and revenue realized from philanthropic efforts. The MPH program itself has not been adversely affected by the diminishment in state support, but like all programs in the school, it too is subject to greater reliance on other sources of revenue to ensure its success. The school continues to rank high on campus in terms of the amount of indirect dollars generated from grant and contracts. There remains, however, considerable potential for yet additional significant increases, and this will become even more crucial as state support wanes. Likewise, philanthropic giving, in the forms of deferred giving and corporate sponsorships, are still relatively untapped means by which the school can generate substantial dollars to support its mission. b. A clearly formulated school budget statement, showing sources of all available funds and expenditures by major categories, since the last accreditation visit or for the last five years, whichever is longer. This information must be presented in table format as appropriate to the school. Table 1.6.1 Sources of Funds and Expenditures by Major Category (FY 2009-2014) Source of Funds Actual Actual Actual Actual Budget 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 Tuition & Fees $ 35,580,052 $ 37,556,449 $ 39,396,743 $ 43,582,252 $ 43,301,992 State Appropriation $ 11,229,617 $ 10,770,766 $ 10,644,174 $ 10,543,530 $ 10,440,854 University Funds $ 810,392 $ 517,088 $ 926,264 $ 532,790 $ 11,700 Indirect Cost Recovery Actual after Campus % $ 1,090,923 $ 1,104,303 $ 1,167,317 $ 855,930 $ 1,005,500 Total Revenue Before Assessments $ 48,710,984 $ 49,948,606 $ 52,134,498 $ 55,514,502 $ 54,760,046 University Tax (Assessments) $ (21,626,328) $ (22,616,808) $ (24,087,380) $ (25,146,163) $ (25,009,839) Total Revenue after Assessments $ 27,084,656 $ 27,331,798 $ 28,047,118 $ 30,368,339 $ 29,750,207 Endowments $ 3,425,919 $ 3,150,677 $ 3,701,662 $ 5,413,883 $ - Gifts $ 505,826 $ 423,615 $ 1,334,415 $ 1,825,193 $ - Grants/Contracts Revenue $ 7,958,793 $ 8,318,243 $ 8,716,938 $ 7,237,363 $ 7,237,363 Total $ 38,975,194 $ 39,224,333 $ 41,800,133 $ 44,844,778 $ 36,987,570 Expenditures Actual Actual Actual Actual Budget 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 Faculty Salaries $ 10,702,430 $ 10,840,040 $ 11,171,810 $ 11,426,105 $ 11,000,000 Staff Salaries $ 2,663,333 $ 2,751,934 $ 2,881,563 $ 3,295,575 $ 3,400,000 Non-Student Hourly $ 229,266 $ 202,278 $ 195,237 $ 224,088 $ 210,000 Student Hourly $ 174,982 $ 198,266 $ 165,452 $ 186,207 $ 200,000 Faculty & Staff Benefits $ 5,077,979 $ 5,176,541 $ 5,508,645 $ 5,841,777 $ 5,725,440 Operations $ 4,415,153 $ 4,494,827 $ 4,246,110 $ 5,437,858 $ 4,000,000 Travel $ 143,286 $ 187,511 $ 160,863 $ 233,717 $ 234,482 Student Support $ 3,403,827 $ 3,442,108 $ 3,698,285 $ 3,675,163 $ 4,980,285 Total Expenditures $ 26,810,256 $ 27,293,505 $ 28,027,965 $ 30,320,490 $ 29,750,207 Grants/Contracts Expenditures $ 7,958,793 $ 8,318,243 $ 8,716,938 $ 7,229,291 $ 7,237,363 Total Expenditures including C&G $ 34,769,049 $ 35,611,748 $ 36,744,903 $ 37,549,781 $ 36,987,570 59
c. If the school is a collaborative one sponsored by two or more universities, the budget statement must make clear the financial contributions of each sponsoring university to the overall school budget. This should be accompanied by a description of how tuition and other income is shared, including indirect cost returns for research generated by school of public health faculty who may have their primary appointments elsewhere. Not applicable. d. Identification of measurable objectives by which the school assesses the adequacy of its fiscal resources, along with data regarding the school s performance against those measures for each of the last three years. For purposes of evaluation and planning, the Committee on Budget and Planning (a subcommittee of the SPH Academic Council) is charged with monitoring the progress of the school with regard to fiscal objectives and indicators. Summaries related to evaluation and planning were provided in Section 1.2 of this self-study. Table 1.6.2 below provides a summary of the school s progress toward fiscal-related indicators over the past three years. Table 1.6.2 Performance toward Fiscal Resource Indicators 2011-2014 FISCAL INDICATORS TARGET 2011-2012 2012-2013 2013-2014 % growth per year in total new philanthropic support annual $ total indirect cost recovery maintenance of balanced budget each fiscal year total $ value of undergraduate credit hour market share % 10% 3.6% (total new giving $523, 314.00) 151.7% (total new giving $1,334,415.00) 36.8% (total new giving $1,825,193.00) $1,500,000 $1,104,303 $1,167,317 $855,930 yes yes yes yes > $ 30 million $30,313,485 $32,473,387 $36,050,691 total $ value graduate credit hour > $ 4 million $4,347,222 $4,477,963 $4,947,641 annual $ allocated in SPH budget to technology > $400,000.00 $425,400.00 $439,720.00 $619,940.00 $ allocated annually to technology replacement > $100,000.00 $103,454.00 $103,454.00 $103,454.00 % of annual school budget allocated to physical facilities > $300,000.00 $329,702.00 $334,127.00 $337,489.00 # square feet of physical space > 500,000 sq.ft. 524,489 SQ FT. 524,489 SQ FT. 528,525 SQ. FT. # square feet of lab space > 20,000 sq. ft. 21,720 SQ FT. 21,720 SQ FT. 20,523 SQ.FT. 60
e. Assessment of the extent to which this criterion is met and an analysis of the school s strengths, weaknesses and plans relating to this criterion. This criterion is met. Strengths The school has retained a balanced budget for the past four years and anticipates a balanced budget for the 2014-2015 fiscal year, with adequate fiscal resources to fulfill the school s mission, goals, and its instructional, research, service, and community engagement objectives. The school works closely with campus-level entities to prepare an operating budget each fiscal year and under the university s Resource Centered Management model, the school retains considerable budgetary autonomy and fiscal responsibility. Since its transition to a school of public health, the school has noted significant levels of growth in its gifts. The school maintains a staff structure, with key individuals in the separate departments and at the level of the school, which provides sufficient levels of support for budget management. A key component of the school s governance structure is the Committee on Budget and Planning, which is a standing committee of the SPH Academic Council and which provides consultative leadership to the school s dean and chairs of departments in order to help ensure that the school monitors and plans for the assurance of fiscal resources necessary to fulfill the school s mission. Matters related to fiscal resources are included in the school s annual evaluation and planning process. The school s undergraduate programs are strong and will strengthen over time with the addition of more majors within the BSPH degree program. The undergraduate program constitutes a significant level of stability to the school s budget. The school has retained the ability to dedicate stable resources to support graduate students via fellowship and assistantships and continues to place a great deal of priority on efforts to diversify and expand the school s extramurally funded portfolio both for research and service. The school anticipates its history of stable fiscal resources to continue, and expects the budget to grow as academic offerings are expanded through more public health-oriented coursework at the graduate and undergraduate levels and future plans to fully engage non-residential students and mid-career professionals in online courses, certificates, and degrees. Weaknesses Under the Resource Centered Management (RCM) model of fiscal management, undergraduate-based revenue (tuition) and total faculty FTE are significant components of a department s annual base budget. As a result, those departments without undergraduate programs (Department of Epidemiology and Biostatistics and Department of Environmental Health) and those that continue to build their faculty FTE, appear to be underfunded compared to others. However, initial base budgets were established for these departments to ensure stability in their growth and development. As these departments add additional degree programs (particularly majors within the BSPH degree), expand enrollments in existing graduate programs, capture additional extramural grant and contract funding, and observe expansions in their faculty FTE, they will see proportional growth in their base budgets and this disparity will no longer be as significant. Future Plans A critical factor in the school s fiscal stability is that it increases (or at a minimum retains) its 61
proportion of undergraduate credit hour market share. To accomplish this, a priority for the Committee on Budget and Planning will include collaborations with other standing committees focused on curricular enhancement, given that fiscal management is closely related to programmatic growth and credit hour production. Another issue prioritized by the Graduate Studies Committee and the Committee on Budget and Planning is that the school must increase the proportion of the school s budget that is allocated to student financial aid. Additionally, the school must enhance its efforts to increase the total dollar amounts for indirect cost recovery and extramurally funded expenses. 62