University of Michigan-Flint New Budget Model First Year Results

Introduction Prior budget system featured central control and fixed budgets New budget system is variable with decentralized decision-making New system began in July 2005 This report summarizes results for the first year under the new system

Objectives of New Budget Model Funding tied to revenue generated: State appropriation Tuition Special Programs Fees Facilitates enrollment growth to 8,000 students

Revenue Sources  State appropriation  Tuition  Special programs  Fees Note: Prior agreements for special programs, fees and carry forward policy are incorporated into the new budget model.

Settlement Process Timing of transfers: Fees- each semester Special programs- each semester Tuition- end of year Updates provided during the year Review handout example

Summarized Results Tuition$ 10,948 Special Programs$ 1,640,019 Fees$ 2,162,151 Total Distributed$ 3,813,118

Summarized Results CAS$ 583,438 SEHS$ 388,792 SHPS$ 354,871 SOM$ 243,122 OEL$ 511,304 Total Academic$ 2,081,527 Support Units $ 627,091 Gen. Administration $ 1,104,500 Total Distributed $ 3,813,118

Summarized Support Unit Results Chancellor$ 8,778 Provost$ 70,248 Associate Provost$ 278,828 SSEM$ 118,903 VCA$ 139,812 VCIA$ 10,522 Total Support Units$ 627,091

Summarized General Administration Results MS-CIS revenue (5%)$ 3,280 MA-Ed Tech revenue (5%)$ 5,190 MAC revenue (5%)$ 19,521 NetPlus revenue (10%)$ 138,807 Credit Option revenue (40%)$ 36,169 Online Course fee revenue$ 56,633 ($3 of the $43 charged) Registration fee revenue (100%)$ 844,900 Total General Administration$ 1,104,500

Setting FY 07 Budget Revenue targets: Undergraduate- assumed tuition up 7.9% and enrollment down 2% Graduate- assumed tuition up 4% with varied enrollment assumptions by program Change in State Appropriation Change in Fixed Costs Review handout example

FY 07 Undergraduate Revenue Targets  CAS$ 22,693,096  SEHS$ 2,977,971  SHPS$ 3,034,158  SOM$ 2,664,500  OEL$ 396,274 Total Revenue$ 31,765,999

Lessons Learned Budget model worked well Level of understanding varies Results varied by unit Graduate payouts exceeded target Undergraduate payouts somewhat disappointing Budget model payouts in line with enrollment

How to Benefit from New Model Give top priority to revenue and enrollment growth Set aside a reasonable reserve, then invest the rest to support increasing enrollment Consider deployment of limited resources to areas with highest growth potential Work cooperatively with other groups to increase enrollment

Resources VCA OfficeDave Barthelmes VCA OfficeDave Barthelmes Financial ServicesJerry Glasco Financial ServicesJerry Glasco Website Website

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