1. FY2010 WEB-BASED BUDGET DEVELOPMENT PROCESS “A” FUNDS Developed and Presented by The Budget Office & eBusiness Solutions

2. Budget Office Objectives 1)Provide convenient tool for submitting base budget changes 2)Establish the FY10 base budget amount for each unique Department/Fund & object code combination 3)Improve data control and processing: Safeguard core data Reduce consolidation errors Better use of time verifying budget information - not creating spreadsheets and pasting changes 4)Allow sufficient time to compile the Board of Trustees Budget Document 5) Enable an accurate and timely posting of FY2010 base budget to the general ledger 2

3. General Information – Tuition & Fees Tuition & Fees Request for changes was due March 20 Academic units – Tuition estimates  Five years of tuition data available by semester in DataWarehouse  Unless there is a known decrease in student enrollment, units can plan tuition budget that is AT LEAST the amount it is this year  If tuition does not look reasonable we will return it or change it in consultation with the Provost ‘s Office Failure to budget tuition at the expected level results in a significant variance of budget to actual and fluctuations in carryforward University tuition increase  Amount of increase unknown at this time  Academic units do NOT budget for university increase

4. General Information – Pay Package Pay Package & Fringe  The House and Senate Budgets do not provide a pay package increase  Employer contributions for health insurance are not expected to increase on January 1, 2010.  SCRS contribution is not expected to increase on July 1, 2009 – but a small percentage increase may be needed for retiree health insurance coverage.  We expect that the employer contribution for unemployment compensation will increase in the future, but it is unlikely to change for FY10.

5. General Information – State Appropriations All USC Campus base state budgets are expected to be cut further in both the House and Senate appropriations bills for FY2010. This is a loss of recurring state support. For FY2009 total reductions since FY2008 through March to USC Columbia (excluding the School of Medicine) are $39,762,495 or 24.73%. In the initial budget development, any additional cuts will be taken in the General Fund, but will be assessed to units late in the budget development cycle or in August. The cut may be covered through a combination of tuition increase and unit reductions. Unless the state cut is covered 100% through a tuition increase, once a decision is reached on how to spread the cut to units, service units will see a reduction to the tax- in (81150) while academic units will see both a reduction to state appropriations (31500) and a reduction to the tax-out (86150). There is a possibility of additional mid-year cuts after the fiscal year begins. USC will not budget any Federal Stimulus Funding. These funds were included in the House budget, but are not currently part of the Senate Finance budget. If they are received, the President has indicated these would be used for non-recurring initiatives.

6. FY2009 ApproachFY2010 Approach Resources 31500$100,000 37302$10,000 4XXXX$200,000 Total Resources$290,000 Resources 31500$100,000 37302$10,000 36302$20,000 4XXXX$200,000 Total Resources$330,000 Less one-time transfers($20,000) Recurring web-based budget$290,000 For FY10, the web-based budget was compiled differently. In FY09 and previous years, the starting point was the 2/28/08 budget. The one-time budget allocations were reversed and the funds were restored to the unit which provided the one-time funds. In FY10, the starting point is the July 2008 beginning budget. All July one-time transfers were restored to the unit which gave the one-time funds. Only permanent fund allocations were added to this base recurring budget to arrive at the web-based budget. New Approach

7. Budget Development Basics February 28, 2009 budget is the starting point  “Freeze” on permanent transfers was February 28  Units can still make non-recurring transfers – but any changes since March 1 are not reflected in the base FY2010 budget  The March State budget cut of $2,501,188 was taken by the General Fund, by selected Below-the-Line funded items and included in the FY10 web-based budget. Why this date ?  More than half-way through the fiscal year  Fall tuition is in, tuition reports provide ability to estimate for Spring  Allows time to complete budget adjustments and prepare the web-based system 7

8. Non-Recurring Budget Changes Budget Office Adjustments – NON-RECURRING  Removed non-recurring 3’s from the July 2008 budget Within responsibility - 36400/36500 Outside responsibility - 363XX/368XX  Examined all recurring budget transfer changes processed from August through February 2009  Removed 8XXXX transfers other than the tax codes For the Evening Program under RCCE, put back in an ESTIMATE for transfers out 86100, and put back in the offsetting ESTIMATE for transfer in to the academic units who participate. For the Office of Research and the Provost Office an “E” fund transfer (81100) for indirect cost recovery was included.  To offset changes in resources, expenditure objects were changed If the BD could be reversed back to the expenditure objects that were used, they were offset If we could not tell what object was used, 50000 was offset

9. Recurring (Permanent) Budget Changes Budget Office Adjustments –RECURRING Recurring 3’s: Within responsibility - 37400/37500 Outside of responsibility - 373XX/378XX Rolled up to tax  For service units, this increased the tax in 81150  For academic units, this created a tax in 81150, or if the source is FEI funds, this increased state appropriations (31500)  Academic units 1% reallocation to the Provost was also adjusted in state appropriations (31500) Revenue Budget Office left revenue budgets unchanged 9

10. For the FY2010 base budget development - the Budget Office moved all permanent transfers to the tax except FEI transfers and Provost 1% reallocation funds. Examples: If an academic unit received permanent FEI funds, the source was 31500 All academic units had a 1% reallocation removed from 31500; if an academic unit received reallocation funds, it was returned as 31500 If an academic or service unit received a permanent transfer from any other unit, the source was 373XX If an academic or service unit sent a permanent transfer to any unit, the transfer was 378XX Permanent transfers inside a responsibility- 37400/37500 worked the same way – the tax was shifted one department/fund to another Permanent Budget Changes – Impact on Tax

11. Tax Academic Units Tax out was recalculated based on new allocation factors Service Units No additional resources are allocated at this time For the budget cuts to service units, the tax-out was reduced to academic units as the tax-in was reduced to service units

12. Tax FY2009 Base 86150 $ 145,872,141 FY2009 BOT Allocations & Impact of first 3% state cut 4,084,737 FY2009 Total Tax, Prior to Budget Cuts $ 149,956,878 Decrease in Service Units Tax-In for Budget Cuts($6,624,470) FY2010 Base 86150 $143,332,408

13. Web-based Budget Development Tool WEB BASED BUDGET

14. Units Can… Change existing resource and expense budgets within current allocation Units cannot use 31500, 31525/31526, 31533/31534 or tax codes 81150/86150 Units should not budget any pay package increase Enter unit dollar changes and comments at the object code level Budget additional resources Excluding the University tuition increase and carryforward Drill down on Dept/Fund to see all changes processed by the Budget Office Download all data to an excel file Add object code for a new revenue or new expenditure budget Establish new Dept/Fund accounts and budgets *Must submit account memoranda by May 4, 2009 Make comments for Budget Office and for unit records Confirm that resources – expenses = zero at the Dept/Fund and responsibility unit level 14

15. Object Code 50000 Units may need to budget and/or reallocate amounts in 50000 This object code may be used but should be reserved for holding funds that do not have a specific use at the time the budget is developed Units will need to remove negative budget amounts in 5XXXX objects

16. Your Work is Complete When… Unit budgets are changed and comments are provided, if necessary, at the object code level by May 4, 2009 Account memoranda are submitted for newly established Department/Fund accounts Unit budgets do not have debit amounts in revenue object codes and credit amounts in expenditure object codes All resources and expenditures are equal You send your budget analyst an e-mail indicating you have completed your budget entry Units will check box to indicate actions are complete Budget Office will lock responsibility at completion 16

17. Web-based Budget Development Dates  Web-based budget tool available for all units beginning Friday, April 17  Budget Office will email when the system is up  All units will have until Monday, May 4 to complete budget changes  System will be cut off on May 4 at 4:30 PM No exceptions  When you are finished, please email your budget analyst and check box on web-based system to indicate completion

18. QUESTIONS