1. April, 2005 Texas Public University Cost Study

2. April, 2005 Charge To develop a defensible and acceptable “Instruction and Operations Formula” Matrix Table Sub-Charge – Develop discipline and level comparative analysis (i.e. show how much it cost schools to provide different types and levels of education)

3. April, 2005 Instruction & Operations Formula Funding ~60% of State Appropriation to Universities provided via I&O Formula Current Formula: –Rate ($51.25) * Relative Weight * SCH –Relative Weights & SCH by Level & Discipline Relative Weight are Average Statewide Cost per Level & Discipline –“Relative” to LD-UG Liberal Arts = 1.00

4. April, 2005 University Cost Study Methodology Devise an acceptable approach to a cost study that would: –Identify appropriate cost categories –Reconcile to the Institutions’ Annual Financial Reports –Allocate costs in a fair and equitable manner back to level and discipline

5. April, 2005 Five Cost Centers Plus Capital Outlay (All Current Funds) Instruction (aka “Faculty Salaries”) Academic Support Institutional Support Student Services Research (aka “Departmental Operating Expenses”) Annual, undepreciated Capital Expense for each of the five cost centers

6. April, 2005 Faculty Salaries Every institution provided the following information for each faculty member: –Salary (100%) only for faculty actually teaching (includes TA’s that are teaching) –Teaching Load Credit*, or % of effort, each faculty member receives for each course taught –By Discipline and Level of Course (e.g. Undergraduate Liberal Arts, Master’s in Science, Doctoral Fine Arts, Special Professional in Law) * TLC is Institution-Specific

7. April, 2005 Academic Support and Capitalized Equipment Includes support services for Instruction & Research, Academic Administration (Deans), Libraries, Museums Reconciled to the institution’s AFR Allocated to Level & Discipline w/ results of Faculty Salary Distribution Include undepreciated capital outlay Use all sources of funds

8. April, 2005 Institutional Support Includes Central Executive Management (President), Fiscal Operations Reconciled to the institution’s AFR Allocated to Level using Headcount and to Discipline using unweighted SCH Include undepreciated capital outlay Use all sources of funds

9. April, 2005 Student Services Includes Admissions and Registrars Office Reconciled to the institution’s AFR Allocated to Level using Headcount and to Discipline using unweighted SCH Include undepreciated capital outlay Use all sources of funds

10. April, 2005 Departmental Operation Expense to Include Research Includes Research Expenses, all elements of Instruction NOT captured in Faculty Salaries Charge to an I&O academic discipline using the institution’s departmental budget designations and institutional judgment Allocation is Institution Specific using SCH, Faculty Salaries, or combination

11. April, 2005 Summary Using these steps each institution will end up with: –All of their non-infrastructure E&G related operating costs allocated to their academic disciplines and levels of instruction –All their semester credit hours allocated to their academic disciplines

12. April, 2005 Final Steps Sum the five cost centers by level and discipline for all institutions Divide total costs allocated to each academic discipline and level of instruction by the corresponding SCH to get “Cost per SCH”, which are the calculated weights for the I&O matrix

13. April, 2005 Discipline and Level Analysis Allows for comparisons between institutions –Total Costs Basis –Discipline Basis –Level Basis