1 The Budget Process at UTPA An Overview

2 Agenda Sharing Knowledge & Engaging in the conversation of Resource Allocation  What is a Budget?  Biennial Timeline  State Appropriations  UTPA Budget Process  Resources and Fund Groups  Public Sector Budgeting  How does UTPA Compare?  Challenges Issues Questions Comments

3 What is a Budget? A budget is a plan for allocating limited resources. Vision & Goals Results Resources Plan (Budget) Strategic Plan & Mission Assessment Economy Regional Needs

4 UTPA’s 3 Overarching Goals 1. Undergraduate Access and Success 2. Enhancement of Graduate Education and Research 3. Improvement of Organizational Effectiveness Compact with UT System

5 UTPA’s 6 Strategic Goals 1. Enhance UTPA’s engagement with the community to meet challenges and maximize opportunities. 2. Infuse inter-American and global perspectives throughout the university community. 3. Optimize institutional effectiveness and efficiency consistent with high quality organizational standards. 4. Become an outstanding research institution, emphasizing collaborative partnerships and entrepreneurship. 5. Collaborate with K-12 schools to enlarge the pool of applicants who are personally prepared and academically qualified for higher education. 6. Provide students with a quality educational experience that enables them to complete their educational goals in a timely fashion. Tip: Frame your budget requests around these goals.

6 Funding Sources of FY 2006 Operating Budget FY 2006 Operating Budget: $217,934,796

7 The Appropriation & Budget Timeline

8 Legislative Appropriations Request (LAR) Outlines agencies goals Actual & projected performance measures Actual & projected costs Opportunity for Special Line Item & requests Tuition Revenue Bond (TRB) requests are traditionally submitted every other biennium Submitted prior to each legislative session Institutional hearings with: Legislative Budget Board (LBB) Governor’s Office of Budget, Planning & Policy (GOBPP)

9 Legislative Session Uses the LBB recommended bill as a starting point in developing State Budget Senate Finance Committee (SFC) and House Appropriations Committee (HAC) Conference Committee Fiscal Notes via LBB

10 Appropriations Bill Not like other bills that create or modify statutes; it establishes the State’s Budget Sections (Articles)  Various articles for; general government, judiciary, public safety & criminal justice, etc.  Article III = Education  Article IX = general provisions & contingencies

11 General Appropriations Act Funds Flow to UTPA in 3 different ways  Direct Appropriation Formulas & Special Line items or Identified Needs  Indirect Appropriation related to Institutional Staff Benefits  Other Indirect Appropriation subsequently allocated through other agencies: Texas Higher Education Coordinating Board (THECB) Higher Education Assistance Funds (HEAF)

12 UTPA – FY 2006 Direct Appropriations (Summary) Method of FinanceGoals Supported General Revenue Fund$54.9 MInstruction and Operations 1 $52.6 M Estimated Educational and General (E&G) Income (includes Statutory Tuition) 21.2 M Infrastructure Support M Special Item Support10.5 M Interagency Contracts0.3 MResearch Development0.2 M Total$76.4 M Total$76.4 M 1.Includes formula-calculated support for instruction and operations ($45.6 M) and teaching experience ($1.2 M). 2.Includes formula-calculated support for infrastructure ($8.8 M).

13 UTPA – FY 2006 Direct Appropriations (Detail)

14 HEAF Higher Education Assistance Funds Established in 1984 Funds can be used for: land, equipment, library materials, constructing and renovate buildings, retire debt HEAF vs. PUF (Permanent University Fund) Formula Elements:  Space deficit  Condition of buildings  Complexity

15 UTPA HEAF Appropriations Fiscal YearAnnual Amount $2.9M $2.9M $8.6M $6.0M 2006 & 2007$8.5M $12.8M (?)

16 Formula Funding Instruction & Operations Support (FY06 = $45.6M) Calculated according to matrix weights Liberal arts = 1.00 Teaching Experience Supplement (FY06 = $1.2M) Additional 10% weight added to undergraduate hours taught by tenure and tenure-track faculty. Infrastructure Support (FY06 = $8.8M) THECB Space Projection Model uses the following criteria to predict Educational & General (E&G) space: 1. Teaching space Level and program areas of an institution’s funded semester credit hours 2. Library space Faculty, students, approved programs, and holdings 3. Research space Research expenditures and students’ reported semester credit hours 4. Office space Faculty, staff, and current fund E&G expenditures 5. Support space A percentage of the total prediction for all the other factors

17 Instruction & Operations Support – Matrix UTPA receives support for instruction and operations according to the formula funding matrix in the Appropriations bill. A link to the matrix applicable to the FY 2006 – 2007 biennium is available on the THECB website:

18 Instruction & Operations Support – Example The funding for each class is calculated as follows: SCH (semester credit hour) count * matrix weight (per discipline and level)* funding rate. For example, if 20 upper-division undergraduates each take a 3-hour course funded under the Business Administration discipline, the formula funding calculation would yield: 60 SCH * 1.61 * $55.72 = $5, (If taught by a tenured or tenure-track professor, an extra 10% would be generated from the teaching experience supplement.) The lower of the student level or class level is used.

19 Instruction & Operations Support – Base Period The Instruction and Operations support for FY 2006 – 2007 was calculated according to the funded SCHs reported to the THECB from Summer 2004 through Spring A new one-year base period begins Summer 2006 and concludes with the Spring 2007 semester. Each funded SCH reported during this period will contribute to the annual support for the FY 2008 – 2009 biennium.

20 UTPA Budget Process (FY 2007 Month) 1. Budget packets sent to departments FEB 2. Regents approve budget policies 3. EBRS deployed with training sessions 4. Internal hearings 5. Internal review of budget requests MAR 6. Budget requests due to Budget office

21 UTPA Budget Process (cont.) 7. UT-System videoconference with UTPA APR 8. Draft budget submitted to UT-System MAY 9. …and distributed to account managers 10. UT-System technical hearing 11. Final budget submitted to UT-System 12. Regents approve budget AUG

22 Resources Available to UTPA State Appropriations and HEAF Student Tuition and Fees  Statutory Tuition (E&G)  Graduate Differential Tuition (E&G)  Designated Tuition (Designated)  Mandatory Fees  Library Tech Fee (Designated)  Computer Access Fee (Designated)  Student Service Fee (Auxiliary)  Student Union Fee (Auxiliary )  Other Fees

23 Resources Available to UTPA (cont.) Designated and Auxiliary Sales Revenue Educational Activities Housing and Meal Plans Facility Use Parking Revenue Transfers (e.g., Texas Grants) Indirect Cost Reimbursements Restricted Funds (e.g., Grants, Gifts) Investment Income Fund Balances

24 Fund Groups – Current Funds: Overview of Fund Groups Educational and General Designated Designated Service Departments Auxiliary Enterprises Restricted

25 Funds Not in the Budget: Loan Funds Endowment & Similar Funds Plant Funds* Unexpended Plant Retirement of Indebtedness Investment in Plant Agency Funds * In the budget to the extent used for operations (e.g. Oracle) and debt service.

26 Oracle Public Sector Budgeting (PSB) – Operating Budget Process Provides a complete and integrated solution for preparing the operating budget. Web-based system will replace current Electronic Budget Request System (EBRS). Advantages  Workflow notifications  Worksheets display Budget and Actual Data  Integrated with Human Resources Management, General Ledger, Projects, and Labor Distribution modules.

27 Oracle Public Sector Budgeting (PSB) – Budget Changes (Other than Restricted Funds*) Will be created and processed in PSB Process is centralized into the Budget Office Advantages  Provide instant fund checking status  Workflow notification  Process is expedited *Budget changes for restricted funds will be processed in the Oracle Projects module by the Grants & Contracts office.

28 Other Possible Processes in PSB Salary Sweep Process Salary Adjustment Cycle (Merit, Equity, Reclassification Cycle)

29 When Will You Start Using PSB and What about Training? Budget Changes - Starting in FY 2007 Operating Budget Cycle – Starting in FY 2008 Training will be available for budget users  Budget Office  Other training tools

30 How does UTPA compare to the other UT academic institutions? UT Institution FY 2006 Operating Budget Endowment Funds at 8/31/ Fall 2005 Headcount Austin $1,652,138,623$2,109,515,08149,333 Arlington 333,988,43041,857,14025,216 San Antonio 323,712,94124,675,45327,294 Dallas 264,820,695216,675,77114,387 El Paso 261,630,06598,325,57819,257 Pan American 2 217,934,79616,607,64917,049 Brownsville 120,429,2955,348,41713,316 Tyler 62,155,97651,262,2555,729 Permian Basin $37,918,685$15,429,6663,446 1.Amounts held by UT-System. Does not include Funds Functioning as Endowment. 2.Additional endowment funds of $28,614,063 were held by the UTPA Foundation at 8/31/05.

31 Current and Proposed Tuition and Mandatory Fees (resident undergraduates taking 15 hours) UT Academic Institution FY 2006FY 2007Headcount Austin (College of Liberal Arts) $3,486$3,81549,333 Dallas 3,416 3,66514,387 Arlington 2,9333,30025,216 San Antonio 2,772 3,11227,294 El Paso 2,4442,63219,257 Tyler 2,1252,3365,729 Permian Basin 2,0742,2603,446 Brownsville 1,9482,21313,316 Pan American$1,738$2,14617,049 Average$2,548$2,83119,447 UTPA $ Below Average$810$685 UTPA % Below Average32%24%

32 Challenges UTPA  Unprepared students  Shift towards research (workload adjustment)  Diminishing fund balances  Land State  Shift in cost towards the student  Little discretionary funds

33 Contact Information UTPA Budget Office website: