University Budget Basics

University Budget Basics

December 2010

First - The Basics Fiscal year Fund Types

- Unrestricted vs. Restricted Object Codes Responsibility Organization Codes Budget vs. Actual Operating Units

- Academic or Service Auxiliary Units System Campuses

38 – Moore School of Business15000A000 – DMSB40140 – Fall Tuition Revenue52024 – Domestic Travel10-10-1-11-38-00

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More Basics – System OverviewFlagship Institution - USC Columbia

Senior CampusesUSC AikenUSC BeaufortUSC Upstate

Regional CampusesUSC LancasterUSC SalkehatchieUSC SumterUSC Union

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The System Campuses have approximately 33% of the enrollments of the system and 18% of the total current funds budget.

Total Current Funds - Unrestricted and RestrictedAt USC, this includes funds:

A, B, C, D, E, F, G, H, J, K, L, S, R & RP

Excludes funds:T, V, W, X, Y & Z

General Operating – State Appropriations, Tuition & FeesDepartmental – Student Activities, Sales and Service Auxiliary – Enterprise servicesGrants, Contracts and Gifts

Basics Continued – Alphabet Soup

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http://busfinance.admin.sc.edu/budget

http://www.scstatehouse.gov/html-pages/budget.htm

Where is the University Budget?

The University budget and unit budgets are spending plans that:

Determine sources of funds

Allow maximum use of resources

Control spending

Coordinate activities to meet goals & objectives

Serve as a communication tool

Why Do We Need to Budget?

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State lawAccreditation standardsBoard bylaws

Why Do We Need to Budget?

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Prepare the annual budget document for consideration by the Board of Trustees that reflects the mission and vision of the University of South Carolina.

Assist business officers and administrative heads of colleges, campuses and other University units in executing the Board-approved budget and in maximizing their use of limited resources to meet the University's mission of providing high quality instruction, research and public service to its customers.

Prepare and submit the University's state budget to appropriate agencies and assist legislative contacts in justifying budget requests.

Assist executive University staff and other Division of Finance and Planning staff in ensuring that the University maintains a sound financial status and operates within the budget limitations established by the General Assembly and the Board of Trustees.

What Does the Budget Office Do?

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What Does the Budget Office Do?

Budget Development

Budget Execution

Budget Analysis and Reporting

Budget Planning

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What Does the Budget Office Do?

FY2010 FY2011 FY2012 FY2013January Final Analysis Execution PreparationFebruary Execution DevelopmentMarch Execution DevelopmentApril Execution DevelopmentMay Execution Development PlanningJune Execution Development Agency Activity InventoryJuly Clean up/Carryforward Implementation CHE PresentationAugust Clean up/Carryforward Execution Accountability & Governor's BudgetSeptember Variance Execution OSB Line ItemOctober Reporting Execution OSB Line ItemNovember Analysis Execution Submit info to CHE and B&CBDecember Analysis Execution Submit info to CHE and B&CB

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How much do you think USC’s budget is?

How much is it?

How much is it?

A) $ 76,919,624

B) $ 121,345,898

C) $ 538,065,932

D) $ 1,125,137,838

E) $ 1,121,838,000

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Everyone wins!A) $ 76,919,624

- Columbia Athletics Department Budget

B) $ 121,345,898-System State Appropriations Budget

C) $ 538,065,932- Columbia “A” Fund Operating Budget

D) $ 1,125,137,838- System Total Current Funds Budget

E) $ 1,121,838,000- USC State Budget Total

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FY11 Total Current Funds Revenue Budget

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FY11 Base Cut – State Appropriations Bill

REVISED STATE FUNDS

BASE & TRAVEL CUT

ESTIMATED BASE VETOES

ESTIMATED STATE FUNDS

2009/2010 21.00% 2010/2011 SUSTAINED* 2010/2011Columbia 111,849,075 (23,488,306) 88,360,769 (1,623,719) 86,737,050School of Medicine 16,671,729 (3,501,063) 13,170,666 0 13,170,666Columbia & SOM TOTAL 128,520,804 (26,989,369) 101,531,435 (1,623,719) 99,907,716

Aiken 7,772,409 (1,632,206) 6,140,203 0 6,140,203Beaufort 1,834,243 (385,191) 1,449,052 0 1,449,052Upstate 10,138,616 (2,129,109) 8,009,507 0 8,009,507Lancaster 1,935,139 (406,379) 1,528,760 0 1,528,760Salkehatchie 1,649,214 (346,335) 1,302,879 0 1,302,879Sumter 3,061,316 (642,876) 2,418,440 0 2,418,440Union 746,001 (156,660) 589,341 0 589,341USC System TOTAL 155,657,742 (32,688,125) 122,969,617 (1,623,719) 121,345,898

*Does not include veto of Access & Equity program across all campuses totalling $110,374. These funds were allocated via CHE.

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USC System - State Appropriation Reductions

TOTAL REDUCTIONS PERCENTAGE SINCE FY2008 REDUCTION

Columbia (75,714,638) -47.08%School of Medicine (10,790,688) -46.99%Columbia & SOM TOTAL (86,505,326) -47.07%

Aiken (5,174,788) -46.22%Beaufort (1,447,898) -50.36%Upstate (6,818,715) -46.52%Lancaster (1,271,093) -45.87%Salkehatchie (1,093,288) -46.02%Sumter (2,032,690) -46.11%Union (491,477) -45.90%

USC System TOTAL (104,835,275) -46.98%

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Total Current Funds Revenue Sources

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sales & Svc Auxiliary EnterprisesSales & Svc Educ ActivitiesGifts, Grants, ContractsState AppropriationsTuition and Fees

Operating/General fundsMajority provided from tuition and fees and

state appropriationsThese funds are also called Education and

General – or “E & G” funds“A” funds are unrestricted - dollars may be

used to accomplish the goals of the unit within the constraints of State and University policies, procedures & procurement guidelines

What are “A” Funds?

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At July 1, 2010 – USC System “A” Funds Revenue

Tuition and Fees $ 440,365,81176.37%

State Appropriations $ 121,345,898 21.04%

Grants, Contracts and Gifts $ 6,257,497 1.09%

Sales, Services & Other Sources $ 8,643,696 1.5%

Auxiliary Enterprises $ 0 0.0%

Total “A” Fund Budgets $ 576,612,902

USC System “A” Fund Budgets

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USC Columbia In-State Undergraduate Tuition & Required Fees

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4,260

4,984

5,778 6,416

7,314 7,808

8,346 8,838

9,156 9,786

10.00%

17.00%

15.01%11.04%

14.0%

6.75%

6.89%5.90%

3.60%

6.90%

0

2,000

4,000

6,000

8,000

10,000

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

Actual Percentage

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Undergraduate Tuition & Required Fees ComparisonsSouth Carolina Public Higher Education Baccalaureate Institutions

FY 2011

Percentage Increase Tuition Amount

Winthrop 4.91% $12,176

Clemson 7.50% 11,908

College of Charleston 14.75% 10,314

The Citadel 13.00% 9,871

USC Columbia 6.90% 9,786

Coastal Carolina 4.90% 9,390

Lander 4.50% 9,144

USC Upstate 5.00% 9,072

SC State 5.20% 8,898

Francis Marion 6.50% 8,480

USC Aiken 6.00% 8,374

USC Beaufort 9.50% 7,940

USC Regional Campuses - under 75 hours 6.50% 5,888

FY2011 Tuition and Required Fee Comparison Public SEC Schools

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$5,020

$8,736 $8,610

$9,786

$7,382

$7,900

$6,768

$7,900

$5,731$5,436 $5,461

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The South Carolina Education Lottery provides funds to South Carolina students based on merit for use at public and private institutions in the state.

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What About the Lottery?

Higher Education Price Index

Similar to the Consumer Price Index (CPI)

Calculated by the CommonFund in Washington Interim reports periodicallyAnnually updated in July2.0% last year .9% this year

HEPI is made up of 8 variables – most personnelFaculty, administrative, clerical, and service salaries Fringe benefitsMisc. servicesSupplies and materialsUtilities

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HEPI

Labor-% of budget for personnel & fringe-Health insurance and retirement increases-Academic labor market

Technology

Utilities

Enrollments go up

Fund new initiatives

Why Does Tuition Go Up?

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Technology Fee

Enrichment/Program Fees

Lab Fees

Housing, Food, Parking, etc

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Other Fees

Who has input into developing the budget?

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External Budget Development & ExecutionBudget Development

Commission on Higher Education

Governor

General Assembly

Budget Execution

Budget & Control Board

State Treasurer

Comptroller General29

External Budget Process

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Governor’s Executive BudgetHouse Ways & Means Budget

Senate Finance BudgetConference Committee Budget

FY2012 External Budget Process

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Internal Budget Process

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For Columbia• Plan on tuition increase each year• Increase student population systematically• Cut budgets over two years and use one-time funds to bridge

• Overcut – Risk of mid-year cut – Estimation Risk

• Reduce budgets strategically (not across board)

The Baseball Bat

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Tuition Fee IncreaseEnrollment IncreaseOvercut from FY 2010Recurring Expense Reduction= Total State Reduction

Columbia: Example Only

The Baseball Bat

FY 2010-11 Recurring Cut = $23,488,306 Tuition increase 5% $12,000,000 Added enrollment 200 $1,546,395 FY 2010 Overcut   $1,418,535 Expense Reductions   $8,523,376 Total State Reduction   $23,488,306      

FY 2011-12 Recurring Cut = $20,000,000 Tuition increase 5% $24,600,000 Added enrollment 200 $4,755,164 Expense Reductions   $14,133,142 Total State Reduction   $43,488,306 34

• Travel Restrictions

• Faculty & Staff Hiring Freeze

• Post-Retirement Hires

• Retirement Incentive Plan and Voluntary Separation Plan

• Under Consideration – Cell Phones, Parking

• Focus Carolina – Cost containment & efficiency study with Huron Consulting

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Cost Management Measures

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USC Columbia Campus – FY 2011

Budget Reallocation Initiative $8,000,000University Libraries $340,000Total $8,340,000

Scholarship 4% Fee Waiver Increase - In-State Undergraduate $579,650Career Center - Experiential Education $90,000Total $669,650

Academic Support and Student Affairs Programs

Academic Programs and Services

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USC Columbia Campus – FY 2011

Utility Increases $545,550Environmental Health and Safety - Insurance Increase $29,500Environmental Health and Safety - Hazardous Waste Increase $32,000Environmental Health and Safety - Fire Extinguisher Inspection $34,000Facilities - Operation and Maintenance of New Facilities $637,500University Development and Alumni Relations - Capital Campaign $1,100,000University Communications $250,000Health Insurance Employer Cost Increase $510,800OneCarolina $1,500,000Legal - Operating $226,000Total $4,865,350

Transportation Fee $200,000Student Health Center $650,000Renovation Reserve $800,000Total $1,650,000

General Institutional Costs and Central Operations

Mandated Fee Distributions

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Strategic Planning & Budget Development

System-wide strategic planning; inclusive and transparent 

Budgets are calibrated to strategic plans

Core Mission and Access & Affordability Two-year modification of Columbia budget model

Strategic finance – includes capital and operating budgets