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LEAD UNCW Financial Statements
January 26, 2017
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UNCW Sources (Revenues)
Page 1 UNCW Sources (Revenues) Two Budget Processes Today: The Enrollment Growth Model that results in Appropriations request Tuition and Fee Models that result in Tuition and Fee revenue Both combine to represent 65% of Total Revenues Done
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Total Expenses by Nature
Page 2 Total Expenses by Nature
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Total Expenses by Function
Page 3 Total Expenses by Function
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Page 4 2016 Change in Net Position
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Net Position Increased $21.1m
Page 5 Net Position Increased $21.1m
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LEAD UNCW Budget Management
January 26, 2017
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Agenda Budgeting Funding Budget Management Budget Process
Page 7 Agenda Budgeting Funding Budget Management Budget Process Enrollment Growth Funding (Appropriations) Tuition & Student Fees Summer School Fund Types
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Page 8 Budgeting Funding Budget Mgmt. Budget Process Done
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Page 9 Background UNCW operates on the State of North Carolina biennial budget cycle The university manages eight (8) different budget cycles Externally managed: Office of State Budget and Management (OSBM) UNC General Administration (GA) Internally Managed: University Budget Office Under Guidance of Chancellor, VCBA & VCAA Constant external budget compliance and reporting responsibilities Designed around these external requirements Done
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Budget Cycles External Budget Cycles Internal Budget Cycles
Page 10 Budget Cycles External Budget Cycles Biennial Continuation Budget Biennial Expansion Budget Biennial Capital Budget Supplemental Budget (mid term submission) Campus Initiative Tuition Increases (CITI) Mandatory & Non-Mandatory Student Fees Summer School Rate Increases Enrollment Projections Internal Budget Cycles University Annual Allocation Budget Special Funds Budgets (Auxiliary/Receipt Functions) Faculty and EPA Legislative Salary Increases SPA Legislative Salary Increases Facilities & Administration Receipts (Overhead) Done
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UNCW Historic Budget Process
Page 11 UNCW Historic Budget Process The campus community submits budget requests appropriate for each budget call Multiple processes restricted our ability to link comprehensive allocation decisions to any one program initiative The fragmented nature limited our creativity and collaboration among departments, schools and divisions Done
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Annual Allocation Budget Process
Page 12 Annual Allocation Budget Process UNCW accumulates available funding for one major budget process Provides a unified budget process, responsive to university strategic initiatives, promotes our shared values and encourages collaboration and creativity Strategically aligns our work to accommodate our internal plans while still meeting all of our external obligations Continues to include all external compliance and reporting responsibilities Done
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Annual Allocation Budget Process
Page 13 Annual Allocation Budget Process Budget Allocation Sources One-time annual allocation University reserves Lapse benefits Carryforward from prior year Enrollment growth Tuition Appropriations CITI Tuition associated with increasing tuition rates Student fees Done
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Annual Allocation Budget Process
Page 14 Annual Allocation Budget Process Divisional resource managers proactively determine divisional budget needs Annual allocation requests submitted through the Chancellor and Vice Chancellors Chancellor and Vice Chancellors make final resource allocation decisions based on available funds after requirements are met Done
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Page 15 Budgeting Funding Budget Mgmt. New Funding Budget Processes Enrollment Growth Campus Initiated tuition & Fees Summer School Done
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Page 16 Budgeting Funding Budget Mgmt. Enrollment Growth Done
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Enrollment Growth Timeline
Page 17 Enrollment Growth Timeline Biennium Budget Year One Enrollment Memo instructions (early fall) Campus process takes place Initial campus submission Analysis and Review by internal GA team Dialogue with campus Final submission to OSBM and FRD Year Two Enrollment Memo instructions (later fall) Campus process revises prior year submission Enrollment Growth is part of the Biennium Required to give 2 year enrollment growth projections May be able to adjust in second year
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Funding Model Student Credit Hour (SCH)
Page 18 Funding Model Student Credit Hour (SCH) Prior to the SCH Funding Model Enrollment funding based on percentage change in full-time equivalent (FTE) enrollment Percentage increase in enrollment applied to budget 1995 Session Consider alternative approaches to funding University Enrollment, including SCH funding Review opportunities for off-campus degree programs and summer school 1997 Session Examine funding required for increasing enrollment in distance education instruction 20th Century Model with 21st Century leadership and industry changes
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Funding Model Student Credit Hour (SCH)
Page 19 Funding Model Student Credit Hour (SCH) Following the 1997 Session, UNC developed and implemented an SCH enrollment-change funding model Initially used for enrollment change Distance education funded using comparable model beginning FY Recognizes program costs and degree level differences to request funding for enrollment changes
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Page 20 Enrollment Actual Fundable SCHs – Regular Term
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Page 21 Enrollment Actual Fundable SCHs – Distance Ed
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Funding Model Enrollment Growth- SCH Change
Page 22 FY Enrollment Growth
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Funding Model Enrollment Growth- SCH Change
Page 23 FY Enrollment Growth Request Regular Term Instruction Enrollment change based on campus SCH projections Input incremental number of future SCHs above or below the current budgeted SCHs SCHs are projected separately for: Undergrads, masters, doctoral Within the cost of instruction categories
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Funding Model Enrollment Growth- SCH Change
Page 24 FY Enrollment Growth Request Regular Term Instruction Number of SCHs delivered by one faculty UNC campus standard Based on data set National Study of Instructional Cost and Productivity (Delaware Study) UNC-specific data on average class size
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Funding Model Enrollment Growth- SCH Change
Page 25 FY Enrollment Growth Request Regular Term Instruction Number of instructional positions to meet SCH change Calculation: Change to SCHs divided by SCH per Instructional Position
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Funding Model Enrollment Growth- SCH Change
Page 26 FY Enrollment Growth Request Regular Term Instruction Board of Governors cost factors Low-income students Greater than 1/3 resident undergrads receive Pell Grants Diseconomies of scale Enrollment headcount less than 6,000 UNC campus standard Eligibility reviewed annually Apply to Undergrads only
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Funding Model Enrollment Growth- SCH Change
Page 27 FY Enrollment Growth Request Regular Term Instruction Instructional salary amount Calculation: UNCW - average teaching salary times total positions required Other academic costs Instructional salary amount times % Average teaching salaries - campus-specific rate, calculated by dividing general fund teaching salaries by number of budgeted FTE teaching positions Other academic costs are based on the relationship of costs to faculty salaries Other academic costs – covers faculty personnel benefits, academic supplies, equipment, etc.
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Funding Model Enrollment Growth- SCH Change
Page 28 FY Enrollment Growth Request Regular Term Instruction Library rate Calculation: Total academic costs times 11.48% General institutional support Total academic costs times 54.05% Covers student services, academic advising, campus management, facilities maintenance, institutional research, human resources, security General institutional support – registrar, financial aid office, budget, accounting, purchasing, payroll
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Funding Model Enrollment Growth- SCH Change
Page 29 FY Enrollment Growth Request Regular Term Instruction Total requirements Total costs to deliver new SCHs Instructional salary Other academic costs Library General institutional support
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Funding Model Enrollment Growth- SCH Change
Page 30 FY Enrollment Growth Request Regular Term Instruction Total revenue Calculation: New student full time equivalent (FTE) times tuition rate Appropriation request Total requirements less total revenue Appropriation covers the cost of education not covered by tuition
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Funding Model Enrollment Growth- SCH Change
Page 31 FY Enrollment Growth Request Regular Term Instruction Appropriation covers the cost of education not covered by tuition
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Campus Initiated Tuition & Fees
Page 32 Budgeting Funding Budget Mgmt. Campus Initiated Tuition & Fees Done
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Campus Initiated Tuition & Fees
Page 33 Campus Initiated Tuition & Fees 2016 Legislative Provisions Guaranteed tuition program fixes tuition rates First-time full-time resident undergrads and new transfer students Eight consecutive semesters New, incoming freshmen (FY 17-18) increase capped at 2% Student fee increases capped at 3% per year Combined tuition & fees for undergrad residents in bottom quartile of UNCWs public peers Rates for nonresident undergrad students reflect full cost of education Transfer students qualify for equivalent number of remaining semesters Must remain continuously enrolled
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Campus Initiated Tuition & Fees FY 17-18 Requested Tuition Increase
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Resident Tuition Rate Changes
Page 35 Appropriation covers the cost of education not covered by tuition
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Non-Resident Tuition Rate Changes
Page 36 Appropriation covers the cost of education not covered by tuition
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Campus Initiated Tuition & Fees FY 17-18 Requested Student Fee Increase
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Mandatory Student Fees Changes
Page 38 Mandatory Student Fees Changes
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Page 39 Budgeting Funding Budget Mgmt. Summer School Done
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Summer School Summer 2016 Tuition Increase
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Page 41 Budgeting Funding Budget Mgmt. Budget Management Done
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Page 42 What is a budget? Management plan for meeting probable revenues and expenses for a given period Serves as a control mechanism to match anticipated and actual revenue and expenditures Mechanism to keep expenditures within the budget established for the operation
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Page 43 Fiscal Year 2016, $4.6 Billion of the State $41+ Billion budget goes to Universities, 11% Source: OSBM Website
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Source: Trends in Higher Education Website
Page 44 State-Local Funding per Student FY North Carolina ranks 11th , spending 16% more than the national average. Source: Trends in Higher Education website Source: Trends in Higher Education Website
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Fund Types General Funds Trust Funds (Non-General Funds)
Page 45 Fund Types General Funds Appropriation & tuition Trust Funds (Non-General Funds) Auxiliaries Gifts Student fees Overhead receipts Grants & contracts indirect costs Capital Improvement Funds Appropriation Receipt supported (self-funded) Repair & renovation
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Page 46 Budgeting Funding Budget Mgmt. General Funds Done
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General Funds General Uses Limitations
Page 47 General Funds General Uses State appropriations and tuition support core instructional, academic support and associated administrative services Sustain and grow the operations of the university Supports faculty and staff, library operations, academic advisors and counselors, campus safety, information technology, budget and human resource personnel Limitations Funds are not allowed to support health centers, student activities, dining facilities, parking decks, athletics, or residence halls May not be used for gifts, food, and entertainment
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General Funds Increase general funds Decrease general funds
Page 48 General Funds Increase general funds Biennial budget Continuation Expansion Enrollment Growth Capital Campus-initiated tuition increase Carryforward – one-time Summer school Decrease general funds Permanent Legislative reductions One-time Reversions Holdbacks Annual Allocation
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Page 49 Budgeting Funding Budget Mgmt. Trust Funds Done
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Trust Funds General Uses Limitations General university support
Page 50 Trust Funds General Uses General university support Services to students, faculty, or staff Fee based, directly related to cost to provide the service Self-supporting activities Donations/gifts Limitations Must comply with university guidelines May allow gifts, entertainment, and food Student fees must directly support the associated student activities
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Unbudgeted Trust Funds
Page 51 Unbudgeted Trust Funds General Uses General university support Limitations May allow gifts, entertainment, and food Unrestricted donations/gifts Operation Simple budget, one budget pool Must receive revenue before spending
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Budgeted Trust Funds General Uses
Page 52 Budgeted Trust Funds General Uses Services to students, faculty, or staff Fee based, directly related to cost to provide the service Self-supporting activities Limitations Fees must directly support the associated activities Operations Detailed budget, many budget pools Spend before receiving revenue
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Page 53 Budgeting Funding Budget Mgmt. Auxiliaries Done
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Auxiliaries General Uses Limitations Examples
Page 54 Auxiliaries General Uses Services to students, faculty, or staff Fee based, directly related to cost to provide the service Self-supporting activities Limitations Fees must directly support the associated activities Examples Residence halls Food service Student health center Athletics Post office
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Page 55 Budgeting Funding Budget Mgmt. Overhead Receipts Done
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Overhead Receipts General Uses Limitations
Page 56 Overhead Receipts General Uses Supplement expenses for instruction, research, physical plant and associated administrative costs Indirect costs associated with managing grants Rate is set by negotiation between the federal government and the university Limitations Funded from facilities and administration costs (F&A) charged to federal contract and grants Expend funds only to support scholarly development or to ensure campus infrastructure
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Page 57 Overhead Revenue
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Page 58 Budgeting Funding Budget Mgmt. Capital Improvements Done
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Capital Improvements General Uses Limitations Repair and renovations
Page 59 Capital Improvements General Uses Repair and renovations Road improvements Infrastructure Land purchases New construction Limitations Funds must be used for the purpose for which they were established
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Questions, Comments, Observations
Page 60 Questions, Comments, Observations
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