Transcript Proposed Changes to RCM - University of New Hampshire

Proposed Changes to RCM
STATUS UPDATE
3/12/2010
Goals
 Align RCM incentives with institutional goals
 Identify source of central strategic funds
 Simplify RCM as much as possible
 Develop greater financial accountability for all RC
units including central service units
 Establish criteria and process for subventions
 Implement strong incentives for net revenue growth
Status
 FY08 and FY09 models have been built
 Initial recommendations developed
 Follow-up meetings with constituent groups are
almost complete
Initial Recommendations
General Assessment
1.
Eliminate revenue/personnel general assessment and fund central
administration from a direct % of undergraduate net tuition, F&A recovery, net
mandatory fee, room and board revenue and state appropriations.





20% of net undergraduate tuition revenue (UNHD) and 5% of UNHM undergraduate net tuition
revenue
20% of F&A revenue
5% of PAU state appropriation
5% of Mandatory Fees Room and Board revenues
5% of Continuing Ed and Graduate net tuition revenue
Central administration funding to be limited to President approved level (after
central budget committee deliberation).
3.
Any revenue collected over and above approved central administration budget
will go to University Subvention fund.
Undergraduate Net Tuition
1.
Adjust credit hour weighting to reflect cost to generate undergraduate credit hour
2.




2.
3.
COLSA – 1.15, COLA - .8, CEPS – 1.55, WSBE – 1.0, CHHS – 1.0
No course level based weighting for any tuition allocation
Continue two year averaging for undergraduate net tuition
100% of undergraduate net tuition to unit of instruction
20% of UNHD and 5% of UNHM undergraduate net tuition to central admin
$15,000,000 of state funding to resident institutional financial aid
Recommendations, cont.
Graduate Net Tuition
1.
Allocate grad net tuition to unit of matriculation including CGPS program revenue
2.
5% of net graduate allocated to Central Administration
Continuing Education Net Tuition
1.
Allocate continuing education net tuition (including summer and January Term) on
a weighted credit hour taught basis
2.
5% allocated to Central Administration
F&A Recovery
1.
70% to RC unit, 20% to Central administration, 10% to PI
2.
Default home/host splits: Provost’s council discussion
State Appropriation
1.
PAU revenue allocated to RC unit where PAU resides
2.
5% of PAU revenue to central administration
3.
Allocate state ACE funding to institutional fund to offset financial aid costs
4.
$15 million to financial aid to cover resident financial aid costs in year 1 and
incremental amounts in future years
5.
Remainder to subvention fund – max subvention fund $3 million
6.
Changes in state funding (increases, rescissions) required to be discussed by CBC
with recommendations to the President on how to allocate
Recommendations, cont.
Mandatory Fee, Room and Board Revenue
1. 5% of mandatory fee, room and board revenue net of debt
service allocated to central administration
Other Revenue
1. 100% to unit where it is generated
Facilities Services
1. Keep existing facilities services allocation structure above
2. Keep phasing in of new space costs
Reserves
1. Allow units to spend up to 20% of their reserves without
additional approval as long as minimum reserve balance is
met on an all funds basis
Proposed Model Inputs/Summary
Undergraduate Net Tuition
Credit Hour Weighting:
COLSA
COLA
CEPS
WSBE
CHHS
Academic Affairs
Graduate Net Tuition
% for Central Admin
5%
Continuing Ed Tuition
% for Central Admin
5%
FY09 Model Inputs
1.15
0.8
1.55
1
1
0.8
Home/Host Split:
Home
Host
0%
100%
% of UNHD net tuition for Central Admin
% of UNHM net tuition for Central Admin
20%
5%
Reallocate financial aid to aux?
n
Central Admin Funding
Sources:
Undergraduate Net Tuition
Graduate Net Tuition
Continuing Ed Tuition
Other Revenue
F&A Recovery
Net Mandatory Fees Room and Board
State Appropriation
Total
$
$
$
$
$
$
$
$
29,235,091
750,652
685,317
3,622,925
6,568,951
34,873,689
75,736,625
Uses:
Library
Academic Affairs
UNH IT
VPFA/Pres/UCM/Advancement
Research Service Unit
Student and Academic Services
Institutional Fund
Mail Services
Facilities ECD
Facilities O&M
Total
$
$
$
$
$
$
$
$
$
$
$
15,776,039
14,683,120
4,803,057
9,218,177
7,341,182
4,179,649
19,334,401
401,000
75,736,625
F&A Recovery
% for Central Admin
20%
Mandatory Fees, Room and Board
% for Central Admin
5%
Other Revenue
% for Central Admin
0%
Facilities
Allocate facilities costs?
All units on NSF basis?
y
n
State Funding
Amount to Allocate to Subsidize Resident Students $
% of PAU for Central Admin
Amount to Allocate to Financial Aid?
$
5%
15,000,000
State Funding
PAU Funding
Library/USNH/AA
Resident Tuition Subsidy
Financial aid
Subvention
Total
15,975,885
34,873,689
16,598,440
415,982
67,863,996
$
$
$
$
$
$
FY09 Net Revenue/Expenses
Unit
Current Model
COLSA
$
(1,871,798)
COLA
$
914,235
CEPS
$
348,587
WSBE
$
1,519,475
CHHS
$
1,890,088
UNHM
$
226,806
Library
$
271,743
Coop Ext
$
(129,852)
EOS
$
87,991
Research Centers
$
1,408,808
Athletics
$
(825,834)
Business Affairs Aux:
Housing
$
723,177
Dining
$
355,543
Conf Ctr
$
(20,460)
Printing/Mail
$
(56,759)
NEC
$
(1,354,901)
Trans Svcs
$
184,146
Bus Affairs
$
(392,894)
Total Business Affairs
$
(562,148)
Student and Academic Services:
Campus Rec
$
(8,684)
Whitt Arena
$
361,936
MUB
$
2,235
Health Services
$
(469,166)
Counseling Ctr
$
23,570
Student Affairs
$
63,866
Total Student and Academic Services
$
(26,243)
UNH IT
$
1,516,505
VPFA/Pres/UCM/Advancement
$
(195,218)
Research Service Unit
$
(148,546)
Academic Affairs
$
741,180
ECD
$
1,584,930
Facilities O&M
$
857,733
Institutional Fund
$
4,176,641
Total
$ 11,785,083
Proposed Model
$
873,718
$
1,153,046
$
(461,412)
$
1,777,403
$
1,282,350
$
127,704
$
271,743
$
8,577
$
264,193
$
1,656,423
$
(2,121,401)
$
$
$
$
$
$
$
$
$
$
$
Variance
2,745,516
238,811
(809,999)
257,928
(607,738)
(99,102)
138,429
176,202
247,615
(1,295,567)
$
$
$
$
$
$
$
$
(220,762)
494,056
(48,653)
(56,759)
(1,444,496)
85,764
(320,674)
(1,511,524)
$
$
$
$
$
$
$
$
(943,939)
138,513
(28,193)
(89,595)
(98,382)
72,220
(949,376)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(114,416)
138,143
271,758
(248,637)
123,029
63,866
233,742
1,516,505
(195,218)
(148,546)
741,180
1,334,930
773,037
4,176,641
11,753,091
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(105,732)
(223,794)
269,523
220,529
99,459
259,985
(250,000)
(84,696)
(31,992)
FY08 Net Revenue/Expenses
Unit
Current Model
COLSA
$
(129,378)
COLA
$
(830,983)
CEPS
$
(381,988)
WSBE
$
122,110
CHHS
$
(858,426)
UNHM
$
(433,472)
Library
$
(33,042)
Coop Ext
$
(354,951)
EOS
$
424,615
Research Centers
$
2,230,021
Athletics
$
(395,738)
Business Affairs Auxiliaries:
Housing
$
852,150
Dining
$
(57,612)
Conf Ctr
$
(61,842)
Printing/Mail
$
(146,221)
NEC
$
(371,137)
Trans Svcs
$
128,350
Bus Affairs
$
57,155
Total Business Affairs Aux
$
400,843
Student and Academic Affairs:
Campus Rec
$
(18,542)
Whitt Arena
$
221,286
MUB
$
(31,078)
Health Services
$
865,639
Counseling Ctr
$
57,016
Student Affairs
$
(26,212)
Total Student and Academic Affairs
$
1,068,109
UNH IT
$
382,760
VPFA/Pres/UCM/Advancement
$
776,099
Research Service Unit
$
(829,074)
Academic Affairs
$
1,120,559
ECD
$
1,045,826
Facilities O&M
$
(1,395,809)
Institutional Fund
$
1,379,031
Total
$
3,307,112
Proposed Model
$
1,612,992
$
(903,790)
$
(1,729,680)
$
232,989
$
(1,365,300)
$
(557,083)
$
(33,042)
$
(102,249)
$
412,209
$
2,340,266
$
(1,852,948)
$
$
$
$
$
$
$
$
$
$
$
Variance
1,742,370
(72,807)
(1,347,692)
110,879
(506,874)
(123,611)
252,702
(12,406)
110,245
(1,457,210)
$
$
$
$
$
$
$
$
(47,885)
(213,946)
(47,007)
(146,221)
(506,752)
9,801
120,382
(831,626)
$
$
$
$
$
$
$
$
(900,035)
(156,334)
14,835
(135,615)
(118,549)
63,227
(1,232,469)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(192,554)
57,478
208,653
1,010,538
121,921
(26,212)
1,179,824
382,760
776,099
(829,074)
1,120,559
800,963
(1,565,809)
1,379,031
467,090
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(174,012)
(163,808)
239,731
144,899
64,905
111,715
(244,863)
(170,000)
(2,840,022)
Recommendations, cont.
Subvention Funds
1.
Reserve approximately $3 million of state appropriation for
subvention funds to be allocated by the President.
2. Allocate subvention funds on a temporary, unit by unit basis, not
to exceed 3 years.
3. Allocations will be based on unit achievement of University goals.
4. Subventions may be renewed by the President
Strategic Initiative Funds
1.
Strategic initiative funds will be funded from the following
sources:




2.
Unallocated subvention funds
Contribution of “off the top” revenues above what is necessary to fund central
administration
Unrestricted gifts
1/3 of Ecoline reserve
Fund level - $5 million to $15 million
Recommendations, cont.
 Implement in FY12 and run parallel model in FY11.


Provides for year of planning and adjustment
Further analysis of credit hour weight values
 Formal review in FY17
 Central Budget Committee serves as the oversight group
for central administration and facility funding levels,
changes in state funding allocations and any RCM
formula adjustments.
 Financial accountability for all units


Mitigation process for units in deficit
Units must maintain minimum reserve level
Recommendations, cont
Central Administration budget review and approval
 CBC would assign 1-2 members to work with individual central admin units to
understand operations and budgets resulting in a written budget request
submitted to the CBC.
 Central admin units are: AA – Library, AA – Research AA – Student and Academic Services, AA – All
other, VPFA – Facilities, VPFA – IT, VPFA – All other, Advancement, President – Athletics, President – All other,
Institutional
 Each unit would present on a 3 year basis and receive a 3 year budget
commitment
 Units would provide a budget request in the form of a report to the CBC with an
accompanying presentation describing scope of work, budget history and
forecast, HR trends and forecast, strategic initiatives, customer feedback,
benchmark information
How Does the Proposed Model Address Goals?






Align RCM incentives with institutional goals
1.
Incentives for revenue growth, particularly in the areas of graduate studies, continuing education, gift revenue, research,
technology transfer
2.
No disincentives for interdisclipinary activity
Identify source of central strategic funds
1.
Subvention funds
2.
Unrestricted gifts
3.
Excess “off the top” revenues
Simplify RCM as much as possible
1.
Elimination of revenue/expense based general assessment
2.
Elimination of targeted allocations to central administration units
3.
Elimination course based credit hour weighting
4.
Elimination of state appropriation allocation based on weighted faculty salaries
Develop greater financial accountability for all RC units including central service units
1.
Tie subvention allocations to performance
2.
Minimum reserve policy
3.
Strong deficit mitigation process
4.
CBC review of administrative budgets
Establish criteria and process for subventions
1.
University goal - based allocations
Implement strong incentives for net revenue growth
1.
Incentives to generate revenue – unit keeps majority
2.
Low tax on graduate, continuing ed, grant, gift and all “other” revenues
3.
Revised reserve policy
Questions Remain
 What are the specific subvention criteria?
 Financial aid sharing between schools/colleges and
auxiliaries
 Split of home/host unit F&A allocation
 Final credit hour weights
What Next?
 Meet with remaining constituent groups – GSO,
Student Senate and staff councils
 Refine model and recommendations based on
constituent group feedback
 Present final model and recommendations to
President Huddleston by March 31.
FY11 Work
 Answer remaining questions
 Develop FY10 Model
 Work with each unit to develop transition plan and





fully understand impact of new model on each unit
Develop policies and procedures (reserves, CBC role
and process, subventions, mitigation process, etc)
Finalize credit hour weights and F&A splits
Finalize revenue assessment rates
Develop subvention criteria and process
Develop financial performance metrics