Framework for a New Campus Budget Process Incentive-based Budget Model Overview UCSD Campus Visit January 30, 2013

A NEW INCENTIVE-BASED BUDGET MODEL GOALS: Advances the university’s Vision of Excellence Encourages Creativity Leads to a more Transparent Budget Process Note: Model allocates funds to deans not departments Includes a Transition Strategy Model neither imposes cuts nor prints funds

A NEW INCENTIVE-BASED BUDGET MODEL KEY ATTRIBUTES: Revenue allocation tool (not a cost allocation model) Allocates funds at level of the dean or vice chancellor Allocates as much revenue as possible to units; AND Maintains resources to ensure Provost/EVC role Incentives are forward-looking; also look to remove barriers Existing budget authority retained; this is not a re-benching Use of metrics to evaluate effectiveness in annual process

REVISED TIMELINE

Budget Model Phase I Components Budget Components in Budget Model, ~$820 million Campus Budget Model

REVENUE FLOW State Appropriation Provost Revenue Sources Spending Authority HArCS Undergraduate Tuition Indirect Cost Recovery Spending Uses Other priorities Start-ups DM FTE Faculty merits TOE Initiatives Academic Plan Administrative & Academic Support Units Salary Benefits OP Tax Fixed Costs FTE Salary Benefits Start-ups Instruction TAs Lecturers Readers Fixed Costs Staff salaries Faculty salaries Benefits OP Tax

Tuition allocated directly to schools and colleges ($136 M) 60% based on student credit hours 30% based on degree majors 10% based on degrees awarded Return to Aid (RTA) ($77 M) Deducted before allocating to schools and colleges New model does not change our commitment to student support Assessment ($60 M) 30% after accounting for RTA Portion of new tuition is assessed for allocation by the Provost Budget Model Undergraduate Tuition Revenue

UNDERGRADUATE TUITION ALLOCATION Revenue is distributed as follows: 60% based on student credit hours 30% based on degree majors 10% based on degrees awarded Share of totals (two-year avg.) 18% of SCH total 5.6% of degree majors 3.6% of degrees awarded UG Tuition revenue Approximately $18 million Current Budget New Model Baseline Budget GF CBP ICR $18M UGT

Derived from a variety of sources ($428 M) Assessment on undergraduate tuition ($60 M) Graduate tuition ($55 M) Unrestricted state support ($300 M) Portion of ICR also flows to central campus ($90 M) Used to support Campuswide services from administrative and academic support units Institutional initiatives Basic operations of academic units Initially, self-balancing part of the model Budget Model Provost Allocation

PROVOST ALLOCATION & GRADUATE TUITION Initially, Provost Allocation is calculated as follows: General Fund Base Budget, plus benefits from the central pool, less undergraduate tuition revenue Provost Allocation and Graduate Tuition Approximately $20.6 million Current Budget New Model Baseline Budget PA & GT GF CBP ICR $20.6M $18M UGT PA & GT

Indirect Cost Recovery Funds Budget Model Phase I (continued) dollars in thousands 1 Total ICR generated and distributed $ 121,700 2 Less categorical set-asides (ARRA, Garamendi, etc.) $ (25,200) 3 ICR available for distribution $ 96,500 4 Distribution for Deans, VC-R (34%) $ 32,800 5 Distribution for Provost (66%) $ 63, Distribution for Deans, VC-R (34%) $ 32,800 8 Less prior year campus return program $ (14,700) 9 Less OP Tax, benefits, existing base budgets $ (8,300) 10 ICR Increase to Deans, VC-R $ 9, Distribution for Provost (66%) 13 Graduate student support, matching funds $ 10, Research support (VC-R, VC-ARM, Library) $ 18, Transition for OP tax implications$ 5, Provost decisions (debt service, start-ups, etc.) $ 30,200

INDIRECT COST RECOVERY (ICR) Revenue is distributed as follows: 66% of ICR generated to central campus 34% of ICR generated to unit Achieve a 60%-40% split by Share of ICR Approximately $1.4M $1.4M $20.6M $18M Current Budget New Model Baseline Budget UGT PA & GT ICR GF CBP ICR

BASELINE BUDGET Estimate Current Budget New Model Baseline Budget UGT PA & GT GF CBP ICR UGT PA & GT ICR

Budget news (campus, UC system, state) o budgetnews.ucdavis.edu budgetnews.ucdavis.edu Data, analysis and reports o Provost’s Dashboard: provost.ucdavis.edu o Campus Facts: facts.ucdavis.edufacts.ucdavis.edu o Campus Budget Office: budget.ucdavis.edubudget.ucdavis.edu Advocacy (critical!) o Annual financial schedules and reports o Budget Information Sources