1. Budget Training The University of Montana 2010/2011 Session I The Budget Environment

2. Course Outline The funding foundation The process Break The current situation and the outlook…

3. Learning Objectives At the conclusion of this session, you will be able to:  describe the types of funds utilized by the University, and identify the primary purpose of each fund  identify major sources and uses of each fund  describe the General funds appropriation and allocation processes  explain the concept of spending authority, and the fiduciary responsibilities at various levels of delegation  describe the planning / budget / assessment cycle and associated timelines.

4. Let’s Start with Fund Accounting. (Don’t be scared.)

5. What is a fund? A fund is an activity or entity separately accounted for – with its own cash, balance sheet, or income statement

6. How many different kinds of funds do we have? Current Restricted Funds Grants Contracts Gifts Current Unrestricted Funds E&G Funds –General Funds –Designated Funds Auxiliary Funds Non-Current Funds Plant Funds Loan Funds Endowment Funds Agency Funds

7. General Funds GENERAL FUNDS revenue comes from: state appropriations millage tuition and fees investment income

8. General Funds

10. General Funds support: basic teaching, research & public service mission academic and administrative support activities maintenance and operation of the University and its academic facilities The heart of university financial resources

11. General Funds Instructional programs Library operations Business services Utilities Examples of General Funds Activities

12. General Funds – Uses

14. Designated Funds DESIGNATED FUNDS revenue comes from: Fee-for-service activities Self-support activities Entrepreneurial activities Indirect cost recovery Investment income

15. Designated Funds Designated for purposes specified by the Board of Regents or the campus Separately classified to accumulate costs or to re- charge other funds or accounts

16. Designated Funds Computing & Information Services Student Course Fees Indirect Cost Recoveries Continuing Education Sales & Service Accounts Examples of Designated funded activities

17. Designated Funds – Uses

19. Auxiliary Funds AUXILIARY FUNDS revenue comes from: Primarily student-related Fee-for-service activities Self-support activities Entrepreneurial activities and Investment income

20. Examples of Auxiliary Funded Activities Residence Halls Food Services Printing & Graphics Services Golf Course Campus Recreation Center Auxiliary Funds

21. Auxiliary Funds – Uses

23. Restricted Funds Funds which are limited to purposes specified by sources external to the Board of Regents or the Legislature Specific projects or programs, which can only be expended under the terms of a governmental or private gift, grant or contract.

24. Examples of Restricted Funds Federal grants and contracts Private grants Federal financial aid Restricted scholarships Restricted gifts

25. Other Fund Types Loan Funds Plant Funds Agency Funds Endowment Funds

26. Fund Integrity So, does it really matter what fund gets used for what? Really?

27. Break!

28. Programs (Functions) Instruction Research Public Service Academic Support Student Services Institutional Support O&M Plant Scholarships

29. Programs (Functions) Instruction Research Public Service Academic Support Student Services Institutional Support O&M Plant Scholarships So… What kinds of expenses are appropriate for each of these?

30. Programs (Functions) Instruction Research Public Service Academic Support Student Services Institutional Support O&M Plant Scholarships

31. Programs (Functions) Instruction Research Public Service Academic Support Student Services Institutional Support O&M Plant Scholarships How much of our budget does each one represent?

32. General Funds – by Program

33. FY10 Budgeted General Funds by Program

34. Program Integrity So, again – does it really matter what program gets charged for what expense? Really?

35. General Funds Process How do general funds end up in your budget?

36. General Funds Process (es) “Lump Sum” $$$ Legislative Appropriations Executive Budget Proposal Allocation Campus / Unit Budgeting

37. General Funds Process (es) Executive Budget Proposal – Present Law Adjustments – Decision Packages

38. General Funds Process (es) Legislative Appropriations – HB2 – HB13 – OTO – Special Items – Others…

39. General Funds Process (es) “Lump Sum”

40. General Funds Process (es) Allocation (OCHE, Regents)

41. General Funds Process (es) Campus / Unit Budget Process (es) Biennial Annual

42. Administrative Assessment What is it, really? Why do it? Who determines how much, and how do they do it?

43. Planning, Budgeting, and Assessment

44. The Budgeting Environment Where we’ve been… The current situation!!! The outlook???

45. Where We’ve Been… The 2008/2009 Biennium – PL & Payplan funded at 85% – 0% Resident tuition increase, 6.5% Nonresident – 2.9% Payplan – Record enrollments (res & nonres) – No funding for growth – No base funding for quality or new initiatives

46. Where We’ve Been… The 2010/2011 Biennium – Appropriation failed to cover PL & Payplan – 17.6 million (6.5 million Missoula) is Fed OTO – 3% Resident tuition increase, 8.5% Nonresident – No Payplan – Record enrollments (res grew significantly, nonres down slightly) – No funding for growth – Quality, new initiatives funded from nonresident tuition

47. The Current Situation!!! FY10 tuition shortfall of $1.4 million FY11 tuition shortfall could exceed $2 million Planning for loss of $17.6 million (6.5 million in Missoula) in 2012/13 Biennium Conceptual framework in place Detailed planning & implementation will continue remainder of FY10

48. A Word (or 2) about Reallocation (…and the lump)

49. The Outlook??? State revenues down significantly, possibility of additional State appropriation reductions Enrollment prospects uncertain – Resident FTE and headcount continue to grow despite fewer MT high school graduates – Nonresident enrollment more challenging Timing of economic recovery hard to project Commitment to continued excellence and achievement of strategic goals is unwavering

50. Learning Objectives At the conclusion of this session, you will be able to:  describe the types of funds utilized by the University, and identify the primary purpose of each fund  identify major sources and uses of each fund  describe the General funds appropriation and allocation processes  explain the concept of spending authority, and the fiduciary responsibilities at various levels of delegation  describe the planning / budget / assessment cycle and associated timelines.

51. Questions? Discussion?

52. Preview of Coming Attractions

53. Thank you !