October 28, 2011 Michelle Quinn Sr. Vice President for Administration University of Northern Colorado MANAGING THE MONEY

Managing the Money?...

We care about the money because we care about the mission. UNC President Kay Norton

Managing the Money! …

Four Key Questions * Are we achieving strategic and financial balance? What financial measures and reporting help us assess our effectiveness in fulfilling our mission? Are we demonstrating integrity in our financial management? What is our overall financial health? * Strategic Financial Analysis for Higher Education: KPMG, Prager, Sealy & Co. LLC, Attain

Are we achieving strategic and financial balance? Making data-informed decisions Setting realistic strategic objectives given fiscal constraints Allocating resources in accordance with mission and priorities (connecting planning and budgeting)

University Finances are Complicated * Students 60%

Fiscal Constraints FY12 UNC = $32.8 M

Strategic and Financial Balance Enrollment growth Discounting Student success and support Mission-driven, data-informed “profitability” Reality of personnel costs Functions Instruction Academic Support Research Public Service Student Services Institutional Support Operation & Maintenance of Plant Auxiliary

What financial measures and reporting help us assess our effectiveness in fulfilling our mission? Basic: Budget with comparison to actual Revenue Expense Departmental Natural Functional Full cost of programs

Measures based on financial policy 11  Proportion of revenues related to: Student instruction and support Main campus Other locations Online Grants and contracts Housing, Dining Retail and events  Percent of revenues invested in innovation  Percent of revenues invested in capital  Level of reserves  Discounting tuition

Are we demonstrating integrity in our financial management? Reasonable and appropriate control of university assets Compliance with standards and regulations Using consistent principles of money management

What is our overall financial health? The sufficiency of resources to achieve our mission Adequate flexibility in deploying resources to achieve its mission Effective management of assets and liabilities (including liquidity) Operating results (relationship of revenues and expenses) 13

A little basic accounting, the balance sheet: Assets --Liabilities =Net Assets House MortgageEquity Cash Accounts Receivable Buildings Bonds Accounts Payable Fund Balance

A little basic accounting, the income statement: Revenues (current year) -- Expenses (current year) Change in Net Assets + Prior Year Cumulative Net Assets Year End Net Assets * * Assets -- Liabilities = Net Assets

Composite Financial Index (CFI) 16

Graphic Financial Profile CFI 17 Resource Sufficiency Are net assets (equity) sufficient compared to expenses? Debt Management Are net assets (equity) sufficient compared to long-term debt? Operating Results Do operating results indicate organization’s expenses are in alignment with revenues? Asset Performance & Management Are our returns (operating & non-operating) appropriate compared to our net assets (equity)?

Budgets are only a small piece of managing the money BudgetActual Year 1 - Groceries $6,000$4,000 Year 2 -- Groceries$5,000$4,500 ResultBudget Cut of $1,000 Spent $500 More

We care about the money because we care about the mission