Transcript APB Template

Budgeting
A Class by Academic Planning and Budget
November 14, 2006
Why are we here?









Overview of the Planning Process
Basic terminology
Revenue budgeting
Expense budgeting
Budget constraints
Other factors to consider when preparing a budget
Practical application through the use of group exercises and case
studies
Demonstration of Campus Budgeting Information Gateway (C-BIG)
Test of understanding
Academic Planning and Budget
2
7/16/2015
Why bother to Budget?

Which of the four images do you think we should adopt for
Budgeting?
Academic Planning and Budget
3
7/16/2015
Why bother to Budget?

Which of the four images do you think we should adopt for
Budgeting?

Which one would Charles Dickens have chosen?
Academic Planning and Budget
4
7/16/2015
UC Budget Calendar
July
August
September
October
November
December
January
February
March
April
May
June
Academic Planning and Budget
5
7/16/2015
What Shapes the UC Budget Request

The Higher Education Compact Agreement negotiated with the
Governor in 2004 promises the University:






a 3% increase in the base budget
Enrollment growth funding of $37.9 million, reflecting an increase of 5,000
student FTE in 2005-06.
An additional 1% increase to the State General Fund base beginning in
2008-09 for ongoing building maintenance, instructional equipment,
instructional technology, and libraries.
Undergraduate student fee increases of 8% in each of the next two years
and graduate academic student fee increases of 10% annually for two
years.
$305 million from Proposition 55 GO bonds for capital outlay
In return the University is agreeing to accountability measures
for improving access to undergraduate education, improving
segmental cooperation and K-12 education.
Academic Planning and Budget
6
7/16/2015
What determines the State’s Ability to
Honor the Partnership?
Academic Planning and Budget
7
7/16/2015
UCLA’s Budget and Planning Calendar
July
August
September
Chancellor’s
Budget
Allocation
Letters
November
October
Call Letter for
Next Year’s
Planning Cycle
December
January
February
Faculty Appointment Discussions
Financial Reviews with APB
Units’ Strategic
Plan submittal
March
April
May
Management Meetings
with EVC
June
Decision Retreat
with Chancellor
Units’ Budget
submittal
Academic Planning and Budget
8
7/16/2015
What is The Role of Academic
Planning and Budget?



To support the Chancellor and Executive Vice Chancellor in
Academic/Strategic Planning.
Advises the Chancellor and Executive Vice Chancellor on the
allocation and utilization of campus funds.
Interacts with the Office of the President to maximize the
campus’ financial position.
Academic Planning and Budget
9
7/16/2015
Why Plan?
Which result do you prefer?
A
Academic Planning and Budget
B
10
7/16/2015
Planning example
Academic Planning and Budget
11
7/16/2015
What is Planning?


At its simplest it’s deciding where the organization should be in
the future, and how it’s going to get there.
So, what do we need to know in order to undertake this “simple”
activity?



What’s the mission of the organization?
What are its goals and objectives?
What’s the environment within which it exists?
Now
Future
Internal
External



What are the strengths and weaknesses of the organization?
What are the organizations’ opportunities and threats?
What are the detailed operational plans needed to achieve the goals and
objectives?
Academic Planning and Budget
12
7/16/2015
Why are budgets always associated with
plans?

What is a budget?

Without a budget how can managers know whether they can
implement their plan?

Without financial, and other, benchmarks how can managers
know whether they are achieving their goals and objectives?
Academic Planning and Budget
13
7/16/2015
The Operating Budget

In order to develop the operating budget we need to understand
the plan.







What are the goals and objectives?
What is the environment within which the organization exists?
What are the organization’s SWOTs?
What are the detailed operational plans needed to achieve the goals and
objectives?
Should we just solve problems?
Should we do new things, and should the new things be additive
or replace some of the current activities?
What helps us answer many of the questions posed above?
Academic Planning and Budget
14
7/16/2015
Capital Budgeting

UCLA’s first structure. Can anyone guess where it is?
Academic Planning and Budget
15
7/16/2015
Why have a capital budget?

Capital Items




Cost a lot and require considerable planning and management focus
Last a long time
Are usually paid for by issuing debt which is repaid over an extended period
of time
Who pays for capital projects at UCLA?



The State
Donors
Campus Units
Academic Planning and Budget
16
7/16/2015
What are some of the Budget Terms that
need to be understood?

Permanent, Carryforward, and Temporary Budgets








How do these terms influence financial decisions?
Zero-based Budgeting
Incremental Budgeting
Top-down
Bottom Up
Balanced Budget
Appropriation
Block Budget
Academic Planning and Budget
17
7/16/2015
What are UCLA’s Sources of Revenue?
Regental funds
 Student fees
 Contracts and grants
 Sales and services
 Gifts and endowments


Academic Planning and Budget
Copies of All-funds Financial Report.
18
7/16/2015
Regental funds
State funds
 UC General funds
 Indirect cost recovery funds
 Patent income
 STIP
 Endowment administrative fee

Academic Planning and Budget
19
7/16/2015
Student fees
Registration fee
 Education fee
 Self-supporting degree programs
 Professional school differential fees
 Course materials fees
 Campus-based fees
 Summer session fees

Academic Planning and Budget
20
7/16/2015
Contracts and Grants
Direct costs of research activities
 Indirect costs

Academic Planning and Budget
21
7/16/2015
Sales, Services and Auxiliaries
Hospital
 Vivaria
 Housing
 Athletics
 Parking
 Mail & messenger
 Communications services

Academic Planning and Budget
22
7/16/2015
Fund Raising




Gifts
Endowments held by the Regents
Endowments held by the UCLA Foundation
Examples of uses:




capital,
endowed chairs,
scholarships,
discretionary funds

Article on UCLA’s Fund Raising
Academic Planning and Budget
23
7/16/2015
Class Exercise
Academic Planning and Budget
24
7/16/2015
What Forecasting terms do we need to
understand?
Academic Planning and Budget
25
7/16/2015
What Forecasting terms do we need to
understand?

Straight-Line

Same as Last Year plus/minus inflation/cuts

Regression Analysis

Best Guess
Academic Planning and Budget
26
7/16/2015
What Concepts do we Need to
Understand?

The Approval Process

Fiduciary Responsibility

Full Costing



Direct Costs
Indirect Costs
Revenue Projections


Rate Setting/Pricing
Volume
Academic Planning and Budget
27
7/16/2015
Individual Exercise
(Revenue Budgeting)
Academic Planning and Budget
28
7/16/2015
What Concepts do we Need to
Understand?

Expense Budgeting


Program Costs
Appropriateness of Costs

Individual Exercise: DNA Isolation Budget

Unexpended Funds

Budget Monitoring and Adjusting
Academic Planning and Budget
29
7/16/2015
Demonstration
Campus Budget Information Gateway
(C-BIG)






Competitiveness Task Force and the September 2003
Chancellor’s Retreat identified improvement in campus budget
processes as a high priority.
APB established a Steering Committee named the Campus
Budget Implementation Group (C-BIG).
Seven companies submitted proposals; only one company,
Hyperion Solutions Corp., was able to meet the requirements of
the RFP.
The new system is web-based and dependent only on a web
browser.
Allows the Chancellor to approve each organization’s annual
budget in an orderly and timely basis.
Quarterly variance reports will be produced for management
review.
Academic Planning and Budget
30
7/16/2015
Why Plan and Develop Budgets?

You have a choice to make!
Academic Planning and Budget
31
7/16/2015
Academic Planning and Budget
32
7/16/2015