Transcript Illinois’ Plan for Protecting our Excellence

Budgeting
&
Finance
Senior Administrator Orientation
August 17, 2009
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 Policy
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
$
FY10 UIUC Budget
State Appropriations
Tuition (Income fund)
Institutional Funds
Grants, Contracts, & Fed Appropriations
Gifts & Endowment Income
Departmental Activities
Auxiliary Enterprises
Total
(000s)
$288,005
457,161
133,933
406,442
128,969
125,727
199,455
$1,739,692
FY10 UIUC Budget
Auxiliary
Enterprises
11%
State
Appropriations
17%
Departmental
Activities
7%
Gifts &
Endowment
Income
7%
Tuition (Income
fund)
27%
Grants &
Contracts
23%
Institutional
Funds
8%
FY00 UIUC Budget
Auxiliary
Enterprises
13%
State
Appropriations
27%
Departmental
Activities
5%
Gifts &
Endowment
Income
7%
Grants &
Contracts
24%
Tuition (Income
fund)
13%
Institutional
Funds
11%
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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
State Financial Issues
• The state’s General Revenue Fund appropriation is
approximately $26 billion for operations.
• The state started FY 2010 with $2.8 billion in unpaid
vouchers. There is no revenue source to pay these
past due bills.
• The state used one-time funds ($5.7 billion from
borrowings, $2 billion stimulus funds, $300 million
fund sweeps) to help cover this year’s costs.
• Even with these one-time funds, the state sliped
further behind with its payments.
The state will start FY11 with a minimum
shortfall of $9 to $13 billion—or 35% to
50% of the state’s operating
appropriation!
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!
Covering the Shortfall
• Cut the cost of our operations: purchasing, IT,
space. . .
• Reduce our footprint in a selective way:
eliminate, downsize or reorganize some
activities
• Highly differentiated unit budget reductions
based on a number of factors, such as:
– Duplicative activity
– Strategic need
– Source of funds
• Funds already set aside
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