NACUBO Update SACUBO 2004 Annual Meeting James E. Morley, Jr., President & CEO National Association of College and University Business Officers

Legislative Issues in 2004

HEA Reauthorization College Costs FY05 Budget Medicare Modernization Act of 2003

Legislative Issues: HEA Reauthorization Congress is reauthorizing the Higher Education Act of 1965, but no major action anticipated until after November elections –Current law runs out in September 2004 and can be extended The HEA impacts institutions in numerous ways –Unfunded mandates –Federal student assistance, including grants, loans, and campus-based aid –Grants to institutions –Oversight of Department of Education

Legislative Issues: HEA Reauthorization Central themes of reauthorization include: –College cost and price –Access and choice for students –Administrative efficiency –Institutional accountability

Legislative Issues: College Costs First “shot across the bow” is bill by Rep. McKeon (R-CA), originally introduced in 2003 and amended significantly in early 2004 Would create an “Affordability Index” with mandated institutional reports –Portion of bill possibly subjecting institutions to sanctions dropped –Bill also addresses transfer of credits between institutions and offers some regulatory relief

Legislative Issues: College Costs Senate Democrats introduced bill which would: –Penalize state governments reducing higher education funding by more than 10 percent in one year –Raise Pell Grant maximum to $4,500 from current $4,050 –Double size of Hope Scholarship tax credit –Offer incentives for institutions to participate in the Direct Loan program

Legislative Issues: FY05 Budget Pell Grant maximum is static for third year New loan program proposals –Loan limits raised for fist time since 1986 Expansion of Lifetime Learning Credit proposed Treasury Department plans new enforcement efforts

Legislative Issues: Medicare 2003 Prescription drug benefit rules for employer-sponsored health care programs Federal subsidy is 28% of covered prescription drug costs actually paid by participant between $250 - $5,000

Legislative Issues: HEROES Act HEROES Act extends existing law assisting military personnel with temporary deferments or delays in repayment of their federal student loans when they are called to active duty Also provides guidelines for institutions on refunding of tuition and re-enrollment processing for affected students Regulations issued on December 12, 2003

Legislative Issues: CARE Act CARE Act seeks to provide tax breaks encouraging donations to nonprofit organizations, including colleges and universities –Bill currently in political limbo in Senate and unlikely to move soon If passed, bill could positively impact donations to institutions –Allows non-itemizing individual tax filers to take a deduction of between $250 and $500 in 2003 and 2004 tax years –Permits IRA rollovers to charities without tax penalty after 59.5 years of age

Regulatory Issues in 2004

Department of Education Environmental Protection Agency Internal Revenue Service

Regulatory Issues: Department of Education (ED) eZ-Audit requires institutions to provide data elements from their financial statements over the Web along with a PDF of their audit Still must submit audit under OMB Circular A- 133 NACUBO lobbied against the program, and continues to have serious concerns Revised eZ-Audit templates available 3/15/04 Work with financial services at your institution NACUBO and other associations commenting as of 4/22/04

Regulatory Issues: Environmental Protection Agency (EPA) EPA enforcement continues to target colleges and universities EPA Sector Initiative – six associations working with EPA HQ and regions –Environmental Management Systems (EMS) –Performance Measurement –Regulatory Change

Regulatory Issues: Internal Revenue Service Information Reporting for the Education Tax Credits – 2003 first year for reporting financial data to students and the IRS on Form 1098-T New Publication 970, Tax Benefits for Higher Education, provides guidance for students and parents Focused audits on nonresident alien compliance continue

Regulatory Issues: Internal Revenue Service Student FICA withholding for certain student employees –Aimed at subjecting medical residents to FICA withholding –NACUBO Web cast available, with IRS representatives explaining details of proposed rules

NACUBO Activities: The Entrepreneurial Campus NACUBO’s Annual Meeting in Milwaukee –July –Theme: The Entrepreneurial Campus –General Sessions: Jim Collins Derek Bok Larry Sabato

Emerging Issues

Emerging Issues: Performance Measurement Started with GASB project on service efforts and accomplishments, aimed at identifying appropriate criteria for performance measures NACUBO survey in December to find out what measures are being used by colleges and universities Focused on internal measures that institutions can use to mark progress toward goals, compare programs Aiming for a practical template for institutional use

Emerging Issues: Human Resources Members are finding HR issues rising: –Health care costs –Litigation –Morale in the face of budget cuts –Demographics of work force

BUILDING ORGANIZATIONAL CAPACITY

PUBLIC TO PRIVATE GOOD

PRODUCER TO CONSUMER-DRIVEN MARKET

UNSUSTAINABLE PRICE INCREASES

NACUBO’S BUILDING ORGANIZATIONAL CAPACITY PROJECT

Vision, Mission, Goals Policies Processes Structure Systems Infrastructure Governance Culture

VISION, MISSION, GOALS: The fundamental purpose and significant aspirations of the institution or activity. POLICIES: The core principles guiding all aspects of the realization of the mission and purpose. PROCESSES: The means by which the mission and goals are realized. STRUCTURE: The organization of people and activities aligned and identified to accomplish mission, goals, and core processes.

SYSTEMS: The supporting information and other processes that promote effective communication, management, and oversight. INFRASTRUCTURE: The human, physical, and financial support assets in place to create and sustain the entire effort as defined by the vision and mission. GOVERNANCE: The exercise of authority, responsibility, and control over goals, activities, and results. CULTURE: The overall character, values, beliefs, and style of the organization—its essential personality.

OUTCOMES Cases Workshops Graduate School Curriculum

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