UCLA Budget Overview and Outlook

Presentation to the UCLA Academic Senate Seminar # 1: Uses of Campus Funds October 23, 2012

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Budgeting Overview

   What is a budget?

 A financial plan including estimated costs, revenues and resources over a specified period, reflecting a reading of future financial conditions and goals.  A budget serves also as:    A plan of action for achieving quantified objectives.

A standard for measuring performance.

A device for coping with foreseeable adverse situations.

What are the major components of a budget?

  Operating budget – an estimate of revenue and expenses in support of current operations. The planning horizon can vary, but an annual plan is typical.

Capital budget – A set of planned capital investments (plant and equipment), with projected return on investment. The planning horizon is typically 5 to 10 years.

What is the difference between a budget and a financial statement?

  A budget is a plan.

A financial statement extracts data from the financial system to summarize past financial results.

 All the data presented today are from the financial system and payroll system.

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Some Key Terms

   General Funds   Also known as 19900 funds.

The basic core operating fund supporting faculty, academic departments, and basic university operations. Funded by state, tuition, non-resident tuition, and a portion of research overhead dollars.

Core Funds  General Funds, other forms of student tuition and fees, and research overhead.

Non-Core Funds   Other revenue sources earned from operating activities.

Earned by the UCLA Health System, housing, parking, athletics, sales & services funds, gifts & endowments, et al.

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Campus Expenditure Overview

What is our money spent on?

Who spends it?

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Travel and Entertainment; $4 Communications & IT; $19 Supplies & Equipment; $19

General Fund Expenditures $793 million in 2011-12

Operation and Maintenance; $72 Student Support; $3 Services; $64 Faculty Ladder; $210 Expenditures made for ladder and non-ladder faculty salaries, staff salaries, benefits, and operating support for the core academic mission and basic operating infrastructure. Benefits; $100 Other Faculty; $116 Staff; $188 5

All Funds Expenditures: $5.9 Billion in 2011-12

Student Support; $321 Operations & Maintenance; $265 Other; $172 Ladder Faculty; $339 Other Faculty; $615 Services; $907 Travel & Entertainment; $76 Communications & IT; $123 Supplies & Equipment; $766 Staff; $1 591 Expenditures from all funds includes all General Funds, other non-General Fund core revenues and non core activities, such as sponsored research and the health system.

Benefits; $763 6

Expenditures by Category 2011-12

100% 90% 80% 30% 20% 10% 0% 70% 60% 50% 40% 56% Total Funds Salary & benefits make up 56% of total spending, but 78% of General Fund spending 7 General Funds 78% Other Student Support Operations & Maintenance Services Travel & Entertainment Communications & IT Materials & Supplies Benefits Career Staff Temp Faculty Ladder Faculty

O&M 10% Equipment 8%

Operating Expenses -- All Funds 2011-12 $2.65 Billion

Student Support 12% Indirect Costs 7% General Supplies 5% Scientific Supplies 16% Services 25% Consultants/Temp.

9% Info Tech 3% Communications 2% Travel & Entertain 3% The largest components of services are patient care subcontracted by the Health System and research subcontracts.

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Who Spends the Money?

General Fund Expenditures 2011-12: $793 million

Administrative Services; $82 UCLA Healthcare; $13 Campus Operations ; $71 College; $247 Academic Support; $77 Other Academic Units; $29 Health Sciences Prof Schools; $114 General Campus Prof Schools; $159 79% of General Fund expenditures were made by academic units.

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Recent Expenditure Trends

Salaries and Wages Employee Benefits Operating Expenses 10

Spending on Academic Salaries

All funds, in millions

$1 200 $1 000 $800 $600 $170 $96 $400 $245 $200 $ $289 FY 2007-08 $176 $102 $258 $305 FY 2008-09 $175 $102 $267 $177 $104 $293 $185 $105 $326 $308 FY 2009-10 11 $329 FY 2010-11 $339 FY 2011-12 Acad Other Acad Apprentice Temp Faculty Ladder Faculty

Spending on Staff Salaries

All funds, in millions

$1 800 $1 600 $1 400 $1 200 $1 000 $800 $600 $400 $200 $ $96 $1 178 FY 2007-08 $105 $108 $1 263 FY 2008-09 $1 267 FY 2009-10 $109 $117 $1 354 FY 2010-11 $1 474 FY 2011-12 Non-career Career 12

8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 4,1% 1,0% 0,0% Ladder Faculty

Average Annual Growth in Salary Spending All Funds, 2007-08 to 2011-12

7,4% 2,1% Temp Faculty Acad Apprentice 2,0% Acad Other 5,8% Career Staff 5,1% Non-career staff 13

Discussion of Recent Salary Expenditure Trends

       In the past four years, spending on salaries from all funds has increased by 22.7%.

During the same period, the size of the UCLA workforce has increased by 0.65%.

Possible contributors to the remaining increase:      Faculty merit increases.

Collective bargaining agreements for represented faculty and staff.

Equity adjustments for faculty and non-represented staff.

3% COLA provided to faculty and non-represented staff in Oct 2011.

Substitution of separating employees by new employees at high salary levels.

Much of the growth in salary spend has occurred in the UCLA Health System.

Workforce and payroll have in academic units that have little ability to generate revenues, such as the College and University Library, have significantly lagged the campuswide average.

Workforce and payroll in most administrative units have significantly lagged the campuswide average.

The campus has deliberately expanded some administrative units, such as Environmental Health & Safety, and Research Administration.

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Total Benefits -- All Funds

$350 000 000 $300 000 000 $250 000 000 $200 000 000 $150 000 000 $100 000 000 $50 000 000 $ FY 2007-08 FY 2008-09 Medical (Health/Dental/Vision) FY 2009-10 FY 2010-11 UCRS (Employer Contribution) FY 2011-12 All Other Benefits 15

4% 2% 0% -2% 18% 16% 14% 12% 10% 8% 6%

Annual Percent Change in Operating Expense 2007-08 to 2011-12

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