Transcript Illinois’ Plan for Protecting our Excellence

Budgeting
&
Finance
Senior Leadership Retreat
August 14, 2011
Two Broad Financial
Responsibilities
• Financial Planning—insuring the
effective deployment of a unit’s
resources in support of its goals.
• Financial Oversight—insuring that
expenditures meet institutional, state
and federal regulations and guidelines.
Beyond that, are public funds being
spent wisely?
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University Structure
Board of Trustees
University
Administration
UI at
Springfield
Planning & Budgeting
OBFS:
Budget Office
Purchasing
Grants & Contracts
Accounting
AITS
Human Resources
University Audits
UI at
Urbana-Champaign
UI at
Chicago
•CITES
•Management Information
•Human Resources
•Facilities and Services
•Office of Sponsored Programs & Research Administration
University Structure
Board of Trustees
President
Vice Presidents
Assistant Vice
Presidents
University
Administration
University Policy Council
President
Chancellors
Vice Presidents
AAMT Academic Affairs
Vice Presidents
Provosts
Vice Chancellors
Centralized Business Services
Chancellors
Provosts
Vice Chancellors
UI at
Springfield
UI at
Urbana-Champaign
UI at
Chicago
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Campus Budget
$
FY11 UIUC Budget
State Appropriations
Tuition (Income fund)
Institutional Funds
Grants, Contracts, & Fed Appropriations
Gifts & Endowment Income
Departmental Activities
Auxiliary Enterprises
Total
(000s)
$265,398
519,284
137,805
398,756
120,914
118,246
199,101
$1,759,504
FY11 UIUC Budget
Auxiliary
Enterprises
11%
Departmental
Activities
7%
State
Appropriations
15%
Gifts &
Endowment
Income
7%
Tuition
29%
Grants, Contracts,
& Fed
Appropriations
23%
Institutional Funds
8%
FY01 UIUC Budget
Auxiliary
Enterprises
12%
Departmental
Activities
7%
Gifts &
Endowment
Income
7%
Grants,
Contracts, &
Fed
Appropriations
25%
State
Appropriations
29%
Tuition
14%
Institutional
Funds
6%
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Managing Your Slice
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Duties of an Administrator
• To develop the academic unit strategically
within the scope of mission and within
resources accessible to the unit;
• To provide accountability at the campus
level concerning the unit’s fidelity to
mission and values; and
• To present the case (be an advocate) at the
college/campus level concerning the
unit’s relationship to strategic concerns of
the campus.
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Duties of an Administrator
• To assure that the academic unit has an
effective process for planning and
budgeting;
• To manage the academic unit’s resources
as required to adapt to changing
opportunities and needs;
• To assure that units, programs, and other
subsidiary organizations are accountable
on appropriate grounds.
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Duties of an Administrator
• To be appropriately entrepreneurial—
look to gifts, self-supporting activities,
and partnerships with other units;
• To work with the resources available to
your unit (no deficits!);
• To be responsive to the needs of the
institution as a whole.
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Managing Unit Finances
• Develop a summary plan for the year that
involves all funds
• Each month someone needs to reconcile
your account statements. Sit down
quarterly to review status
• Know who owes you money; don’t forget
to collect
• Have at least two people review
transactions
• Have your staff attend training
Fund Accounting
• Universities track “funds” separately. For
most departments:
– State/tuition. The main operating account for
most units
– ICR. Overhead on grants & contracts
– Gifts. Each separately tracked. Individual
restrictions important
– G&C. Each separately tracked. Individual
purpose important
Big Picture/Small Details
• Know the full set of resources available to
unit:
– Unrestricted for unit use: State/tuition, ICR,
unrestricted gifts
– Restricted funds whose use coincides with
unit need: some restricted gift funds, selfsupporting
• Each fund separately tracked
– Each statement reconciled
– Rules of fund use honored (particularly watch
donor intent)
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Budget Process
&
Distribution of Funds
Budgets are About Making Choices
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The Budget Process
• Spring – Campus/U of I requests developed
•July – BOT reviews preliminary budget request
•September – BOT approves U of I budget request
•Oct/Dec – IBHE/University interaction
•December/Jan– IBHE recommendations submitted to the Gov.
•February – Governor’s budget recommendations submitted to
Legislature
•May/June – Legislature acts
•June/July – Governor signs appropriation
- Budget allocation to units
College Level Planning
• Nov./Dec. - Colleges develop annual
report following campus planning
guidelines
• Feb./Mar. - Budget hearings (one per
college) led by Provost with assistance
of Campus Budget Oversight Committee
(CBOC)
• Late Spring – campus allocates funds to
colleges
• Summer – College leadership reconciles
request with actual allocation
State Planning Environment
Improving Statewide
Finances
Some good news:
• GRF before transfers and adjustments is up 17.5%,
personal income tax is up >21%.
• Before adjustments, GRF is up 17.5%, mostly based
on the tax increase ($3.2 billion)
• Unemployment ticked down to 8.7%.
However:
• The state still has a massive backlog of unpaid bills.
Owes the U of I alone >$300m!
• Unemployment is down because of “a sharp fall in
labor force participation”
Real Gross Domestic Product by State
1997 – 2008
(Millions of Chained 2000 Dollars)
160
Top Five States*
150
Index
140
130
The decline of manufacturing has
held back growth in Illinois
compared to the nation
United States
Illinois
120
110
100
*Average of top five performing states.
Source: U.S. Bureau of Economic Analysis.
State of Illinois Unfunded Public Pension Obligations
(SERS, SURS, JRS, GARS, TRS)
(Dollars in Billions)
$90
$85
$80
$75
$70
$65
$60
$55
$50
$45
$40
$35
$30
$25
$20
$15
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
(At end of Fiscal Year, FY 2003-04 sale of Pension Bonds)
Planning Considerations
• Revenue
– State Funds—declining industrial base;
significant unfunded retirement costs
– Tuition—One of the highest cost publics;
cost growing beyond capacity to pay
• Expense
– Personnel—80% of total costs
– Utilities—significant cost growth in recent
years. Facilities still require investment
– Financial Aid—major investment required
Planning Considerations
(cont.)
• Buildings/ Maintenance
– State stopped supporting facilities in 2002
– Campus stepped up to cover desperately
needed remodeling and facilities
– Deferred maintenance of $550 million!
– Below average $ per square foot to
maintenance—and it shows!
Campus Planning Efforts:
Taking action so that Illinois can thrive
• Protecting our ability to:
– Hire & retain the best faculty—our reputation
depends on it
– Protect quality and access for our students
– Ensure Illinois remains a leader in higher
education
Moving from a Defensive to
Competitive Posture
Strengthening our Foundation
Through interconnected efforts to:
Ensure Financial Stability
Reduce Central
Costs
Reduce College
Costs
Enhance Our
Revenue Base
Enhancing Financial Stability
& Reducing Central Costs
• Increased financial oversight
• Reducing staff size to control costs and
accelerate efficiencies (400+ FTE decline)
• Implementing sunset provisions for
centrally funded projects
• Investing in energy conservation—$8m+ in
annual savings
Planning is More Important than Ever
Unit Budget Planning
• Unit’s planning should come from goals in its
strategic plan—units should look for tie in
with college and campus plans
• Know how your unit is spending its resources.
Does that spending match goals?
• In challenging times, planning should not be
dependant on growth. How can a unit best
deploy existing resources?
• Be creative—find ways to partner with others,
find new funding sources, focus efforts on
highest priorities
Take Control!
• Meet with those who have been successful
• Attend leadership/training programs
• Make choices—don’t do everything you
have always done, but with less
• Find ways to reduce “backroom” costs.
Shared services are taking off
• Start from the bottom up in redesigning
your organization
Resources
• Accounting Customer Service—Ron Miner,
Assoc. Director. 265-5315
• Budgets and Financial Analysis—Pat Hoey,
Director.
244-0542
• University Audits—Darla Hill, Director. 2655400