2.   Institutional Support Expenditures divided by Total Operating Expense - Auxiliary Exp.   According to the Legislative Budget Board: “provides an indicator of the proportion of operating budget being spent on administrative costs.”   Institutional Support Expenditures divided by Total Operating Expense - Auxiliary Exp.   According to the Legislative Budget Board: “provides an indicator of the proportion of operating budget being spent on administrative costs.” 2

3.   Institutional Support is a functional expense classification defined by NACUBO (National Association College & University Business Officers) used to allocate costs between higher education activities. As reported on the AFR, it tells the reader “why” an expense was incurred as opposed to “what” was purchased. 3

4. Institutional Support includes:   Executive Management – President, VPs & their staff including operations related to planning & legal   Fiscal Operations – Accounting, Bursar and bad debt expense from loans but not from receivables   General Administration– HR, Purchasing, etc.   Administrative Information Technology   Public Relations/Development Institutional Support includes:   Executive Management – President, VPs & their staff including operations related to planning & legal   Fiscal Operations – Accounting, Bursar and bad debt expense from loans but not from receivables   General Administration– HR, Purchasing, etc.   Administrative Information Technology   Public Relations/Development 4

5.  Instruction – costs  Instruction – costs directly related to instructional mission (includes department chairs).  Academic Support  Academic Support – includes dean’s offices & library, museums, academic computing & advising.  Research  Research– includes expenses for activities specifically organized to produce research whether internal (separately budgeted) or externally funded. Includes institutes and research centers.  Public Service  Public Service – non instructional activities to external groups. Includes conferences, institutes, consulting & general advisory services.  Instruction – costs  Instruction – costs directly related to instructional mission (includes department chairs).  Academic Support  Academic Support – includes dean’s offices & library, museums, academic computing & advising.  Research  Research– includes expenses for activities specifically organized to produce research whether internal (separately budgeted) or externally funded. Includes institutes and research centers.  Public Service  Public Service – non instructional activities to external groups. Includes conferences, institutes, consulting & general advisory services. 5

6.  Student Services –  Student Services – costs that have the primary purpose of contributing to students’ emotional and physical well being and intellectual, cultural & social development (outside the context of the formal instructional program.) Includes admissions & records, student IT, student health, counseling & career guidance, student activities, financial aid administration. Does not include intercollegiate athletics programs as those must be identified as an Auxiliary Enterprise by Texas law.  Student Services –  Student Services – costs that have the primary purpose of contributing to students’ emotional and physical well being and intellectual, cultural & social development (outside the context of the formal instructional program.) Includes admissions & records, student IT, student health, counseling & career guidance, student activities, financial aid administration. Does not include intercollegiate athletics programs as those must be identified as an Auxiliary Enterprise by Texas law. 6

7.  Operation & Maintenance of Plant – includes  Operation & Maintenance of Plant – includes administrative costs, building maintenance, custodial, utilities, landscape / grounds, repair & renovation, security & safety (police, disaster preparedness, environmental health & safety, etc.), logistical services (central receiving, stores) and facilities related IT.  Scholarships & Fellowships  Auxiliary Enterprises– self supporting entities  Auxiliary Enterprises– self supporting entities to furnish goods or services to students, faculty, staff or incidentally to the general public; includes food services, athletics, residence halls and all related administrative expenses.  Operation & Maintenance of Plant – includes  Operation & Maintenance of Plant – includes administrative costs, building maintenance, custodial, utilities, landscape / grounds, repair & renovation, security & safety (police, disaster preparedness, environmental health & safety, etc.), logistical services (central receiving, stores) and facilities related IT.  Scholarships & Fellowships  Auxiliary Enterprises– self supporting entities  Auxiliary Enterprises– self supporting entities to furnish goods or services to students, faculty, staff or incidentally to the general public; includes food services, athletics, residence halls and all related administrative expenses. 7

8. UTSA 5 Year Administrative Cost Trend AFR 2008AFR 2009AFR 2010AFR 2011AFR 2012 31,505,000 40,816,000 42,556,783 45,217,799 37,597,797 328,230,000363,087,000396,938,707418,830,437420,454,872 11.2% 10.7% 10.8% 8.9% FY03 (11.2%) FY04 (11.7%) FY05 (11.3%) FY06 (11.9%) FY07 (10.3%) 8

9. Institutional Support Expenditures Total Operating Expense – Auxiliary Exp. We have lowered the rate by 1.86% Source: FY12 Annual Financial Report $ 37,597,797 ____________ = 8.94% $420,454,872 9

10.   Evaluated opportunities to ‘spread’ costs coded to Institutional Support as allowed by NACUBO   $4.4M in IT expenditures allocated to Academic Support   Corrected coding, $3.0M   Capitalized PeopleSoft project team salaries, $965K- moved the expense to O&M of Plant   Administrative Overhead, $895K - moved the expense to Auxiliaries   Evaluated opportunities to ‘spread’ costs coded to Institutional Support as allowed by NACUBO   $4.4M in IT expenditures allocated to Academic Support   Corrected coding, $3.0M   Capitalized PeopleSoft project team salaries, $965K- moved the expense to O&M of Plant   Administrative Overhead, $895K - moved the expense to Auxiliaries 10

11. 11 AFR 2008 AFR 2009 AFR 2010 AFR 2011 AFR 2012 UT Tyler12.7%11.6%11.8%12.0%12.6% UT Permian Basin9.39.78.26.811.1 UT Dallas9.89.18.910.29.3 UT San Antonio11.2 10.710.88.9 UT Pan Am9.610.99.48.9 UT Brownsville7.9 6.97.9 UT El Paso7.7 7.87.77.6 UT Arlington8.08.49.312.17.6 UT Austin5.15.56.05.14.8

12.   UT System & Legislative pressures   Measures administrative efficiency   Stakeholder accountability   Affordability of higher education  Chancellor’s Framework 2. B. 1. Utilize Incentive Based Compensation Strategies:   Presidential Performance Reviews   UT System & Legislative pressures   Measures administrative efficiency   Stakeholder accountability   Affordability of higher education  Chancellor’s Framework 2. B. 1. Utilize Incentive Based Compensation Strategies:   Presidential Performance Reviews 12

13.   Overall expenditures need to increase at a rate higher than Institutional Support costs increase   Fill vacant faculty positions   Add new faculty positions   Increase restricted funding expenditures – sponsored programs & gifts   Reduce Institutional Support Costs   Overall expenditures need to increase at a rate higher than Institutional Support costs increase   Fill vacant faculty positions   Add new faculty positions   Increase restricted funding expenditures – sponsored programs & gifts   Reduce Institutional Support Costs 13