Shining Some Light on the Budget Process

The University of West GeorgiaSeptember 27, 2007

Plan for Today’s Presentation

1. Budget concepts -- different fund categories

Focus on E&G for the remainder of the presentation.

2. The Budget Process:

Formula from State to USG

How USG allocates to institutions

How we allocate it to Divisions

3. Internal Accountability Measures and Metrics

1. Budget concepts:The Mysteries of Fund Accounting

How come you had money to build a fountain, when we lack sufficient classes for Freshmen?

How many classes will we have to cut to build a Stadium?

I notice that there are plans to build a new parking lot on the North Campus – how many classes will we have to cut to build it?

With a $100 Million dollar budget, how come we can’t build a parking deck?

All Dollars Are Not Green!

Some General Fund Categories Educational and General (E&G)

Auxiliary: Health Services

Athletics

Housing

Bookstore

Transportation

Fees:

Technology Fees

Student Activities

MRR

Capital

Foundation

2. The Budget Process

Focus on E&G for the remainder of the presentation

Two Intertwined Processes

Governor

Board of Regents

Board of Regents

Legislature

Governor

Institutions

Deans VPs

Departments:Faculty (Staff)

PAC / President

VPsDeans

A. Budget Process and Timetable:“Before” it comes to UWG

June: Institutions submit requests for health insurance increases, new retirees, and O&M for new academic square footage

Board of Regents staff develops a budget request and Board approves a proposal for the Governor’s Office of Planning and Budget (OPB)

(FY09 request approved at August 7th meeting)

Fall: Chancellor and senior staff present, explain, and defend the budget proposal to OPB and Governor

New Process begun for FY2008

During the fall months, system budget analysts will be comparing West Georgia to peer institutions

IPEDS

USO comprehensive universities

Comparison of Expenditures per student FTE

January: Governor proposes the Budget for the entire State to the Legislature:

The major component of the USG budget is Formula Funding

Special Funding Initiatives

“B” Budget

Capital Budget

Other Adjustments, such as Budget Cuts

The Process (Continued)

The Formula

Is a mathematical device used by the State of Georgia to allocate E&G funds to Board of Regents.

Is based on student credit hours, operation and maintenance of physical plant, and other organized activities.

In the formula, upper level and graduate credit hours are funded at a higher level than lower level (1000-2000) credit hours.

The Process (Continued)

Separately, Governor proposes Salary Increases (average % and effective date) to the Legislature in January – in recent years, this % has been the same as that of K-12 teachers.

The Process (Continued)

January to March/April (40 Days): The Legislature debates the budget; House, Senate, Conference Committee. During this period, there are considerable efforts on the part of USG staff, Presidents, VPs, Legislative Advocates (friends/supporters/faculty), etc. to include items of interest to the USG.

February: System Office holds budget hearings with institutions

March/April: Governor signs budget or declines to do so (In GA, the Governor has line-item veto)

April: University System of Georgia Office receives final allocation and makes allocations to institutions

Allocations to Institutions

Useful to think of these allocations as:Continuing funds New Funds Salary raise allocations (75% of total needed)

Basis for allocations of New Funds to institutions:Credit Hours (80%) Performance (5%)Strategic / Discretionary (15%)

This is a moving target; th

ere is a

feeling that it needs to change.

Other factors:

- Strategic

- Shadow budgets …

The Process (Continued)

April/May: Institutions have a very short time (days) to finalize budget

President’s Advisory Committee – Recommends distribution of new funds to President for allocation within Divisions

June: Board of Regents approve budgets for the fiscal year starting on July 1

B. UWG Internal Processes

Sept/October: Departments formulate needs for new funds and submit requests to Deans

Mid-October: UWG receives instructions for development of FY2009 budget from USO

October: Colleges & non-academic departments submit requests for new funding to divisional VPs

November: VPs formulate requests for new funding

December: PAC completes request for new funding and submits to System Office

February: Budget hearing at System Office

April/May: The Allocation Process of New Money to Divisions

Any money allocated to specific initiatives by the USG must go to those initiatives

Contingency Reserves: If not needed for budget cuts/shortfalls, reserves are used for library acquisitions, equipment for buildings, or other (typically one-time) university needs.

“Allocable” money is computed. Portions of new funds based on

Strategic directions of USG and West Georgia

Percentage of divisional budget to total budget

FY2008 Budget Highlights

New funding related to strategic plan: $1,047,184

Retained Retention/Progression/Graduate Initiative funds, $350,000

1st Amendment includes $188,847 for Nursing initiative

UWG inclusion in “robust tier” of USG institutions – with % tuition increase equal to that of research institutions.

3. Internal Accountability Measures and Metrics

Budgeted Positions by Division FY94 – FY08

0

200

400

600

800

1000

1200

Academic Affairs Student Services Univers ityAdvancement

President/IRP* Business &Finance , Fiscal

Facilitie s Total

FY94

FY08

58%

50%

20.0%

0%

13%

1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Academic Affairs Student Services UniversityAdvancement

President/IRP* Business &Finance, Fiscal

Facilities

Percentage Change in Budgeted Positions by Division FY94 – FY08

FTE: 39%

HC: 34%

Percentage Change in Student Headcount and FTE

Academic Affairs56.0%

Business & Finance, Fiscal

10.4%

Facilities20.2%

University Advancement

4.1% Student Services8.0%

President/IRP*1.4%

Percentage of University Budgeted Positions: FY 1994

Academ ic Affairs64.2%

Business & Finance, Fiscal 8.0%

Facilities14.8%

President/IRP*0.8%

Student Services8.5%

University Advancem ent3.7%

Percentage of University Budgeted Positions: FY 2008

UWG FY2008 Original Budget by DivisionE&G only, excluding capital projects

Academic Affairs 66%Student Services 7%Univ Adv 4%B&F, Fiscal/ Facilities 16%Institutional 7%

Academic Affairs $ 50,621,680

Student Services 5,105,923

University Advancement

3,284,313

Business & Finance, Fiscal/Facilities

12,272,844

Institutional 5,336,858

TOTAL $ 76,621,618

Technology Fees $ 1,202,550

FY2009 Budget

Peer Comparisons

Accountability & Challenge

Prove RPG funds have been a benefit

Stay in “robust” tier

UWG as a destination institution

New requests from institutions must be tied to USG’s strategic goals of …

1. Renew excellence in undergraduate education

2. Create enrollment capacity – 100,000 students

3. Increase USG’s participation in research and economic development

4. Strengthen the USG’s partnerships with state’s other education agencies

5. Maintain affordability so that money is not a barrier

6. Increase efficiency

Peer Comparisons based on FY2007 expenditures

Total Expenditures per student FTE (FY2007)

“Robust” Tier

Georgia Southern

Valdosta

Kennesaw

West Georgia

UWG $8,444

Average, “robust” tier 8,278

Average, Regional & State Univ

8,793

Instructional Exp per Student FTE

% of Institutional Total Expenditures

UWG $4,219 49.96 %

Avg “Robust 4” 4,215 50.95 %

Avg

Comprehensives

4,230 48.43%

Avg, all USG 3,828 44.32 %

Academic Support* Exp per

Student FTE

% of Institutional Total Expenditures

UWG $1,521 18.01%

Avg “Robust 4” 1,080 13.05 %

Avg

Comprehensives

1,117 12.84%

Avg, all USG 1,017 13.15 %

* Library, ITS, Deans' Offices (including A&S Technical Support), Townsend Center, Graduate School, VPAA, RPG Initiative, Technology Fees, Indirect Cost Revenues, …

Institutional Support* Exp/FTE

% of Institutional Total Expenditures

UWG $1,243 14.72 %

“Robust 4” 1,485 18.05 %

Comprehensives 1,653 18.71 %

Avg, all USG 1,519 14.37 %

* Retiree payments, President’s account, Planning Initiatives (reserve), Institutional Research & Planning, Divisions of Business & Finance and University Advancement, …

Operation & Maintenance Exp per Student FTE

% of Institutional Total Expenditures

UWG $908 10.75 %

Avg “Robust 4” 905 10.84 %

Avg

Comprehensives

1,067 12.05%

Avg, all USG 1,112 13.06 %

Student Services Exp per Student

FTE

% of Institutional Total Expenditures

UWG $ 522 6.18 %

Avg “Robust 4” 548 6.58 %

Avg

Comprehensives

621 7.03%

Avg, all USG 605 5.17 %

Arts & SciencesBusinessEducation

45.0%

20.4%

34.6%

Percentage of Majors by College, FY2007

Arts & SciencesBusinessEducation

70%

13%

17%

Credit Hour Production by College, FY2007

Arts & SciencesBusinessEducation

Percentage of Degrees by College, FY2007

39.8%

20.7%

39.5%

Arts & SciencesBusinessEducation

59%

16 %

25%

Percentage Share of Colleges' Budgets

Total FY08 Original Budget including fringe

Arts & Sciences $21,147,732

Business 5,736,655

Education 8,955,422

Total $35,839,809

Summary of Today’s Presentation

1. Budget concepts -- different fund categories

Focus on E&G for the remainder of the presentation.

2. The Budget Process:

Formula from State to USG

How USG gives it to institutions

How we allocate it to Divisions

3. Internal Accountability Measures and Metrics

Thank you for all you do, and

Thank you for coming!

What questions may I answer for you?