Financial Overview and Budget Recommendations David Cummins Vice President for Finance and Administration/CFO Mike Sherman Senior Vice President and Provost; Chief Operating Officer

2 Overview: FY12 General Fund Revenues Investment/ endowment income, 1% [$2M] Departmental sales, 4% [$14M] Other, 2% [$6M] Indirect cost recovery Quaker Sq. lease payments Overhead reimbursement from foundation Tuition and fees, 69% [$271M] State appropriations, 23% [$90M] Transfer-in from FY11 underspend, 2% [$8M] General Fund revenue comes from two primary sources: Tuition/fees and state appropriations. UA expects about $15M less in state appropriations. The General Fund pays for instruction, research, public service, academic support, student services and other activities. The general fund does not pay for: 1.Auxiliary Services (parking, dining, retail, etc.) 2.Residential Life and Housing 3.Most Capital projects GENERAL FUND REVENUE, FY12 BUDGET

3 Overview: FY12 Proposed Expenditures Personnel, including Dept. Sales, 42% [$164M] Fringe benefits, including Dept. Sales, 15% [$60M] Scholarships, including GA fee remissions, 10% [$39M] Auxiliary support, 9% [$37M] Central funded operational support, 8% [$29M] Non-personnel academic, 3% [$11M] Non-personnel academic support, 3% [$13M] Operations supported with dedicated fees, 3% [$13M] Departmental sales, non-personnel only, 2% [$10M] Debt retirement, 2% [$9M] Transfer to reserves, 2% [$6M] GENERAL FUND EXPENDITURES, FY12 BUDGET

4 Since 1987, the cost of higher education has shifted from the state to the student. Overview: State Support and Tuition since

5 Budget Recommendations for FY2012

$15M reduction in state funding Increase in tuition of 3.5% Projected increase in student credit hours of instruction 3.5% Transfer from FY11 to FY12 under-spending of $8.4 million 6 Major Changes in Revenue, FY11 vs. FY12 Image (to come)

7 FY12 Budget: Effect on Units Colleges = average reduction of 2% Academic Support Units = average reduction of 4% UNIT BUDGETS TO BE DETERMINED STRATEGICALLY BY: 1.Alignment with the strategic-plan priorities 2.Enrollment growth in recent years 3.Growth in budget over recent years

STRATEGIC INVESTMENTS, 39% CAPACITY AND EXCELLENCE ASSURANCE, 51% 8 FISCAL INTEGRITY, 10% Major Changes in Expenditures, FY12 vs. FY11 FUNDING ENHANCEMENTS $20 million

CAPACITY AND EXCELLENCE ASSURANCE Compensation adjustments Support for extended locations: Lakewood, Medina, etc. Additional graduate student fee remissions 9 FY12 Budget: Priority I

10 FY12 Budget: Priority II STRATEGIC INVESTMENTS Increase scholarship pool proportionally to tuition increase New student scholarships: Pell-eligible continuing students who were ineligible for general scholarships on admission, but since have earned a cumulative 3.0 with a two-semester, full-course load Select new freshmen with an ACT of 21 and a 3.0 or better New freshmen with ACT between Increase full-time faculty Start-up funds

11 FY12 Budget: Priority III FISCAL INTEGRITY Ensure appropriate reserves [Ohio Senate Bill 6 ratio of 2.5 or greater] Build the reserve Build a fund to enhance facilities

12 FY12 budget: New investments Funding enhancements = $20M NEW INVESTMENTS TO BE WEIGHED BY: 1.Alignment with the strategic plan’s priorities 2.Viability of unit’s proposal to meet criteria of Fiscal Integrity, Capacity and Excellence Assurance, and Strategic Investments

Change from FY10: – 5.6% 13 Our Budget: Selected Cost Containment Measure Our move to self-insurance in FY11 has helped contain healthcare costs. GROUP INSURANCE ANNUAL EXPENSES

Questions? 14