1. Budgeting and Financial Management at Case 101 Overview of the Case Budget Session 2 – November 16, 2006 John Anderson, Provost Christine Ash, VP of Planning & Budget Ginny Leitch, Associate VP of Budget & Financial Planning

2. Page 2 Budget and Financial Management at Case 101 Course Objectives Session I Understand the alignment between academic and financial priorities Understand the budget process on a university and school level Session IIAbility to read and understand the University’s Budget Book Session IIIBecome familiar with financial drivers: endowments, debt and working capital

3. Page 3 Office of Planning and Budgets Reporting Lines Provost Academic VP Planning & Budget (Split Personality) CFAO Finance and Admin.

4. Page 4 Office of Planning and Budgets Functions The reorganized Office of University Planning and Budget will oversee the following major functions (Aug. 2004): Financial planning linked to the strategic plan (five-year plans, budget development) Budget management (forecasting, compliance, control) Institutional research (benchmarking, internal/external reporting, trend analysis)

5. Page 5 Budget Reporting Structure For planning and budget purposes, the Schools, through their Deans, report to the Provost. Central Offices report to the President, the Provost, or the CFAO. All of the above have a fiduciary responsibility, and serve as financial stewards of the University.

6. Page 6 Budget/Management Systems Current System: Decentralized Every Tub on its Own Bottom (ETOB) Proposed System: Decentralized Responsibility Center Management (RCM)

7. Page 7 Financial Planning/Budget/Forecast Process (FY07) Resource Key: FSBC – Faculty Senate Budget Committee UPC – University Planning Committee UBC – University Budget Committee THIS CYCLE ASSUMES THAT A STRATEGIC PLANNING PLATFORM EXISTS – VISION/GOALS/OBJECTIVES

8. Page 8 Timeline Fall Winter Spring June Update Guidelines (Tuition Rates, Endowment Payout Rate, etc.) Prepare five-year plans Prepare the next year’s budget Budget approved by the Board of Trustees

9. Page 9 Budget Categories Income Tuition – academic year/summer, undergrad/grad/professional Endowment – restricted/unrestricted Gifts – restricted/unrestricted Research & Training Overhead State Other Auxiliaries – food services/housing Direct Expense Restricted – salary/non-salary (must equal the total of restricted endowment/restricted gifts/research & training) Unrestricted – salary/non-salary Indirect Expense University Services – examples, President’s Office/Budget Office Student Services – examples, Undergraduate Studies Office/Admissions Plant – utilities/other ITS Library Auxiliaries – see above

10. Page 10 Example of Allocation Rule Undergraduate Academic Year Tuition Every Tub on its Own Bottom (ETOB) 15% net tuition allocated on share of UG degrees 85% net tuition allocated on share of UG CHRS Responsibility Center Management (RCM) Same as above, but rather than using current year data, will use a 2 year moving average

11. Page 11 Questions and Answers