Transcript Document

FY12 Spending Plan Process
Finance and Administration Advisory Group
January 18, 2012
Status of FY12 Budget
8/8/11:
Chancellor announced final budget decisions
8/31/11:
OBFP uploaded adjusted base budgets excluding any approved spending cuts
from 8% reductions scenarios into PeopleSoft (FAST has list of reductions)
9/16/11:
OBFP uploaded carry-forwards for ESS and Gifts into PeopleSoft
Next Step: Spending plans
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Loading New Strategic Amounts into FAST & PeopleSoft
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Loading of all other unrestricted carry forwards into FAST & PeopleSoft
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Movement of State Supported Salaries of Fund 11000 onto other
funding sources
Why Spending Plans?
• Spending plans are mechanisms for forecasting spending for our campus. The ability to
forecast is especially important during turbulent financial times.
• We begin the budget process many months in advance of start of fiscal year, so we need
to update our FY12 spending assumptions based on current information.
• We need an accurate projection of carry-forward spending.
• Spending plans are also accountability tool to help ensure that units have specific plans to live
within their FY12 allocations.
• Living within our expense budgets will be particularly important in FY12.
• Many departments budget at high-level, and we need to confirm that they have
feasible, detailed plans to live within their FY12 allocations.
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Strategy for Balancing the FY12 Budget
• Our FY12 budget-balancing strategy that relies on both new revenue and expense
reductions/reallocations.
ESTIMATED OF SIZE OF FY 12 BUDGET GAP
Description
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31.8
$
Revenue
Add'l Gross Revenue from 7.5% Fee Increase & Enroll
Additional Differential Fee Revenue
Increase in Other Non-Mandatory Fee Revenue
State Funding for Collins Center
Additional Use of UC Revenue
Total Change in Revenue
13.4
1.0
0.5
0.5
2.5
17.9
55%
Expense Reductions/Reallocations
Absorb Expense Growth in Base Budget
Vacancy Factor
Use Part of Remaining $4.5M FY10 Budget Reserve
Expense Reductions/Reallocations: Academic Affairs
New Electricity Contract
Expense Reductions/Reallocations: Other VC Areas
Limit Increase in Institutional Financial Aid
Central Expense Reductions/Reallocations
Total Expense Reductions/Reallocations
4.4
3.0
2.5
1.5
1.2
0.7
0.5
0.6
14.4
45%
Total Gap Closers
32.3 100%
Key Components of FY12 Budget Strategy
Involve Managing Expenses
• Moving $4.4M of expenses to trust funds.
• Doing so in effect asks departments to absorb $4.4M of expenses within their base
budgets.
• This is long-term change.
• Will continue to look at:
• Recent historical spending versus budget by major budget unit
• Trust funds with growing fund balances – capable of sustaining additional
expenses long term.
• All-funds budgeting - Similar to UMass Amherst & Worcester
• 1st step is to consolidate expenses to CTF
• 2nd step is to move $4.4M of trust fund revenue to CTF
• 3rd Step possible implementation of the General Operating Fund as currently used
on the Amherst campus
• Must achieve $3M savings target from vacancy factor
• Departments cannot use savings from vacancies to fund other positions or for other,
non-personnel purposes.
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Key Points about FY12 Spending Plan Process
• We continue to manage the spending plan process through VCs, with meeting(s) with each
VC and business staff to discuss:
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FY12 first-quarter spending
FY12 base budget
Opportunities for absorbing expense increases into base budget
Approved cuts from 8% reduction scenarios
Approved new strategic resources, including recommendations of Growth Planning
Committee.
• All-funds process: Spending plans cover all unrestricted funds.
• At level of major budget units (e.g., colleges for Academic Affairs, could be
departments in other areas).
• At subsidiary code level; account-code level for some departments..
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Proposal to Move Salaries off of State Funds Permanently
Identify the issue:
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The State Appropriation is less than the State Projected Payroll
Current State Appropriation
$69.1 million
Estimated State Payroll
$87.6 million
State Payroll to Move off State
$18.5 million
Places to move excess State Salaries to:
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Tuition Retention Available
Remaining Salaries to CTF
$ 5.7 million
$12.8 million
Moving the salaries to CTF does not solve the overall problem
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There is still a $12.8 million budget gap
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$2.5 million will be funded from reserve
$2.0 - $3.0 million will be funded from vacancy factor savings
$4.0 million will be funded from absorption of growth into base budgets
FY12 current revenue
Proposal to Move Salaries off of State Funds Permanently
Decision on who to move from State funds:
• We typically try and have union (unit) positions on State Funds
With the possibility of State funding future union pay raises
• Chose non academic areas before academic areas
Review of State Payroll:
• Approximately 1,344 benefitted employees are paid from State funds
• The Total Estimated State Payroll is $87,575,000
Paid thru 1-06-12
$44,567,000
Encumbrance @ 1-06-12
$43,008,000
Total Estimated State Payroll
$87,575,000
Proposal to Move Salaries off of State Funds Permanently
Proposal:
• Move all Non-Unit Salaries Approximately 184 people for $17.1 million off State
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127 people for $12.8 Million would move to CTF including:
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53 people for $4.3 Million would move to Tuition Retention including:
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All Non Academic Non Units
The Provost Office Non Units
The Dean’s Offices Non Units
Most Centers & Institutes Non Units
A few Centers & Institutes Non Units
All other Academic Non Units
Some Unit people from Academic areas for $1.4 million would move to Tuition Retention
Preparation for FY13 Budget Process
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Will also begin working on more long-term financial planning issues discussed with Vice
Chancellors budget workgroup and with Implementation Design Team.
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Possible topics range from cell phone policy to support staffing to improving
administrative processes.
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Not sure of process yet, but may seek volunteers from F&A to participate.
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