1. 1 UCLA Budget Overview and Outlook Presentation to the UCLA Academic Senate Seminar # 1: Uses of Campus Funds October 23, 2012

2. Budgeting Overview  What is a budget?  A financial plan including estimated costs, revenues and resources over a specified period, reflecting a reading of future financial conditions and goals.  A budget serves also as:  A plan of action for achieving quantified objectives.  A standard for measuring performance.  A device for coping with foreseeable adverse situations.  What are the major components of a budget?  Operating budget – an estimate of revenue and expenses in support of current operations. The planning horizon can vary, but an annual plan is typical.  Capital budget – A set of planned capital investments (plant and equipment), with projected return on investment. The planning horizon is typically 5 to 10 years.  What is the difference between a budget and a financial statement?  A budget is a plan.  A financial statement extracts data from the financial system to summarize past financial results.  All the data presented today are from the financial system and payroll system. 2

3. Some Key Terms  General Funds  Also known as 19900 funds.  The basic core operating fund supporting faculty, academic departments, and basic university operations. Funded by state, tuition, non-resident tuition, and a portion of research overhead dollars.  Core Funds  General Funds, other forms of student tuition and fees, and research overhead.  Non-Core Funds  Other revenue sources earned from operating activities.  Earned by the UCLA Health System, housing, parking, athletics, sales & services funds, gifts & endowments, et al. 3

4. Campus Expenditure Overview What is our money spent on? Who spends it? 4

5. 5 Expenditures made for ladder and non-ladder faculty salaries, staff salaries, benefits, and operating support for the core academic mission and basic operating infrastructure.

6. 6 Expenditures from all funds includes all General Funds, other non-General Fund core revenues and non- core activities, such as sponsored research and the health system.

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8. 8 The largest components of services are patient care subcontracted by the Health System and research subcontracts.

9. 9 79% of General Fund expenditures were made by academic units.

10. Recent Expenditure Trends Salaries and Wages Employee Benefits Operating Expenses 10

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14. Discussion of Recent Salary Expenditure Trends  In the past four years, spending on salaries from all funds has increased by 22.7%.  During the same period, the size of the UCLA workforce has increased by 0.65%.  Possible contributors to the remaining increase:  Faculty merit increases.  Collective bargaining agreements for represented faculty and staff.  Equity adjustments for faculty and non-represented staff.  3% COLA provided to faculty and non-represented staff in Oct 2011.  Substitution of separating employees by new employees at high salary levels.  Much of the growth in salary spend has occurred in the UCLA Health System.  Workforce and payroll have in academic units that have little ability to generate revenues, such as the College and University Library, have significantly lagged the campuswide average.  Workforce and payroll in most administrative units have significantly lagged the campuswide average.  The campus has deliberately expanded some administrative units, such as Environmental Health & Safety, and Research Administration. 14

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