Transcript Slide 1

Productivity Funding
Understanding the Student Credit
Hour (SCH) Funding Model at the
University of Utah
Please “click” with your mouse button to advance through these slides.
The following slides provide an overview of the Productivity
Funding (often referred to as SCH Funding) model at the
University of Utah. A brief description of the process is presented,
followed by a multi-year example.
If you have further questions, please contact Mark Winter in the
Budget Office at 585-3982, or [email protected] .
Calculation of Budget SCH Totals
Student Credit Hours (SCH) are used for a variety of institutional analysis and reporting needs. It is important
to realize that “Budgeted SCH” are only used internally to calculate and distribute funding designated as
productivity funding. Budgeted SCH numbers will likely never match SCH numbers used in other analysis and
reporting needs for a variety of reasons. The most common reasons for differences are noted below. You can
not compare Budgeted SCH numbers with SCH numbers obtained from the Institutional Analysis website, or
class rosters obtained from the Registrar’s office.
Budgeted SCH numbers are taken from a download of student data at the end of the third week into the
Semester (Summer Semester census is taken at the end of the semester). We exclude contract courses and
courses that AOCE offers through its direct pay mechanism. The former are self-sustaining and therefore not
included in SCH calculations within the budget model. The latter, which AOCE uses to balance the curriculum
at the off-campus sites, are assigned to AOCE within the budget model. In addition, we exclude all students
who were dropped for non-payment of tuition, House Bill 60 students, any student not taking the course for
credit, and any student with an official withdrawal from the course before the census date. Study Abroad
courses are listed separately and are handled by the International Center. Other adjustments are occasionally
made based on unique circumstances or agreements.
Once the SCH numbers have been adjusted for Budget purposes departments are notified by email that they
have been posted on the web for review (If you do want to be added to this distribution list, please contact
Joyce Garcia in the Institutional Analysis office at 581-6135). It is critical that you use this opportunity to verify
the accuracy of the numbers we have compiled. After this review period is completed Budgeted SCH numbers
are considered final and further adjustments require the approval of the Associate VP for Budget and
Institutional Analysis.
Calculation of Budget SCH Totals
Please note:
(1) The Office of Budget and Institutional Analysis (OBIA) does not maintain records of SCH agreements. If you are uncertain
about SCH agreements in your department or college, OBIA suggests working with the person(s) responsible for such
arrangements. Often SCH agreements are informal and undocumented.
(2) Because of this, OBIA can only be responsible for reassignment of SCH. OBIA will not (and cannot) make decisions about SCH
agreements or disagreements. If there are disagreements or negotiations pertaining to SCH distributions, they need to be handled
internally, agreed on by all departments/colleges affected, and approved by the Associate Vice President for Budget and Planning
before OBIA can make reallocations. If you have questions about these procedures please feel free to contact Mark Winter,
Manager of Budget and Planning, or Paul Brinkman, Associate Vice President for Budget and Planning
A. Revenue Side
Viewed from a departmental perspective, the first step is to examine carefully the student credit hour (SCH)
data supplied three times a year by OBIA staff. Each department needs to ensure that it is receiving the SCH
taught by its faculty, unless other arrangements have been made. If there are contested SCH, perhaps
because a course was team taught or taught by a faculty member with a joint appointment, it is up to the
departments involved to resolve the issue and convey the agreed upon distribution of SCH to staff in OBIA.
Once all agree as to the attribution of SCH to particular departments, OBIA staff take the next step which is to
calculate the difference in student credit hour production from the prior year to the current year. That
difference in SCH is calculated at four levels of instruction (see below). The dollar value of the change in SCH
as determined by the SCH x dollars-per-SCH calculation, summed across the four levels, is then added to the
current amount of productivity funding.
Amount paid per SCH by course level
LD = $60 per SCH
UD = $70 per SCH
BG = $85 per SCH
AG = $95 per SCH
(course #’s 1000 to 2999)
(course #’s 3000 to 5999)
(course #’s 6000 to 6999)
(course #’s 7000 to 7999)
Remote Site Incentive SCH are paid at 1.5 times normal rate.
Interdisciplinary Courses SCH are paid at 1.5 times normal rate.
A. Revenue Side -Continued
At the point in time when this funding model was first adopted, FY 2000, SCH generated in FY 1998 became
the base year for the productivity calculation. The difference between SCH generated in 1999 and SCH
generated in 1998, multiplied by dollars-per-SCH, determined the initial amount of “growth” funding. In
addition, academic units that generated SCH through AOCE were allocated funds based on those SCH
multiplied by the same dollars-per-SCH structure (i.e., money was taken from AOCE and given to the
academic units). Together the growth funds and the AOCE-related funds comprised “productivity” funds,
which were allocated to the deans at the start of FY 2000.
The rationale for adopting a “lagged” model was that it mirrored the state’s approach to funding changes in
enrollment, i.e., institutions received increased appropriations in the year following enrollment growth.
Note:
1) SCH is calculated as the number of students registered as of the census date times credit hours per
student, course by course. For example, a three-hour course with 40 students registered at census yields
120 SCH).
2) What is added as incremental funding may be a negative number depending on the change in credit hours
by level of instruction.
3) While the calculation of productivity funding is undertaken at the department level, all productivity funds are
sent to the deans of the respective colleges who then allocate the funds as they see fit.
A. Revenue Side -Continued
Beginning in the fall of 2006, the SCH funding model changed from a “lagged” to a “real-time” approach. It is
worth noting how this change will affect the timing of fund transfers to the colleges. In the past, productivity
funding was calculated in the spring and productivity funds were transferred at the beginning of the following
fiscal year, with no change occurring until the next budget cycle. Under the new process, there are two times
in each year’s budget cycle when fund transfers occur. The first time is in July at the start of the fiscal year,
based on the prior year’s SCH production and any price level increases or any other adjustments to the prior
year’s funding (e.g., some funds may have been hardened and thus removed from the SCH budgeting
process). The second transfer happens in February or March and is an adjusting entry based on actual SCH
number for the year. This entry may result in funds being transferred to your College or funds being
transferred out of your College. In an effort to provide information to assist with your planning and budgeting an
estimate of this transfer will be prepared in late October and sent to your College. This number is provided
early enough in the year to allow you to adjust spending patterns as necessary to deal with additional or
reduced funding.
B. Expenditure Side
Productivity funding can be used for any legitimate Fund 1001 purpose. The only limitation is that productivity
funds may not be used to hire a benefit’s eligible employee (faculty or staff) or to increase the salaries of
benefits eligible employees without the permission of the Senior Vice President for Academic Affairs. Any
request to hire a benefit’s eligible employee or to increase salaries of such employees will entail discussion of
the impact of such actions on the benefits pool. A department chair should expect to be required to use some
of the productivity funding to pay for benefits as well as salary in such cases.
C. An Example -Continued
College
Total SCH $'s
$3500
$3000
$2500
$2000
$500 in
additional
SCH funding
calculated
this period.
$1500
$1000
$500
$0
Yr. 1
Yr. 2
Yr. 3
Yr. 4
Yr. 5
In the graph
above, the academic unit has increased its SCH in Year 2 and
Calculation of Funding:
therefore will receiveYr.additional
productivity funds in the $2,000
form of “growth”
2 amount =
funding going into Year
3.
+ Change in Growth Funds =
$ 500
At the beginning of Year
3, the unit will receive $500 more
than it received at
Total Productivity Funds Beginning Yr. 3 =
$2,500
the beginning of the previous year, or $2,500 in total.
C. An Example -Continued
College
Total SCH $'s
$3500
$3000
$2500
$2000
$1500
$1000 loss in
additional
SCH funding
calculated
this period.
$1000
$500
$0
Yr. 1
Yr. 2
Yr. 3
Yr. 4
Yr. 5
Again SCH levels are calculated at the end of the year. In the graph above, the
Calculation
Funding:
academic
unitof generated
fewer SCH in Year 3 and therefore will lose
Yr. 3 in
amount
$2,500 going forward.
productivity funds
the=form of negative growth funding
+ Change in Growth Funds =
($1,000)
Totalof
Productivity
Yr. 4 = $1,000$less
1,500 than they received the
At the beginning
Year 4,Funds
theyBeginning
will receive
previous year, or $1,500 in Year 4.
D. Summary
Given the change from one productivity funding adjustment per year to twice per year, the
example above is a simplified representation with respect to the new process. The underlying
approach, however, is appropriately represented. The budget model reacts to changes in SCH
production. Each successive adjustment in productivity funds, in concert with the number of SCH
being generated, becomes the starting point for measuring the change in SCH production and the
attendant change in the funding associated with SCH going forward.
The funding allocated by means of the SCH funding model is best viewed as being “soft” because
the amount of the funding varies in response to SCH production. At the same time, it should be
noted that during the period when “base” budgets were being reduced in the early years of this
decade, funds allocated through the SCH funding model were not reduced.
E. SCH Reports
The following slides provide an example of the budgeted SCH reports which are distributed to
Colleges each year. Brief explanations are provided, however, if you have specific questions or
need clarification, please contact the Budget Office at 585-3982.
SCH Reports
SCH Reports
SCH Reports are sent to the Deans Office in each College. Each report
shows the SCH totals by department, level and semester. SCH totals
from the current year and prior year are included as well as the
difference and the related financial calculations.
SCH Reports
Prior Year and Current Year SCH Totals for each Department
are shown in these columns.
SCH Reports
Change in total SCH and calculated Growth Pay
are shown in these columns.
SCH Reports
A Summary Report is provided with total dollars calculated for each department.
SCH Reports
Totals by Department are Shown in these columns. Beginning Prod Funds is the total
productivity funds at the beginning of the Fiscal Year. This is last years ending totals. Budget
Change is the amount increased by additional appropriations during the legislative/budget
process. New Growth is the total of growth funds based on the change in SCH for the
current year. It is positive if there is a net increase in SCH and negative if there is a net
decrease in SCH.
The adjustment column is used for rare manual adjustments. The final column is the total
Productivity Funds for the new year.
SCH Reports
If sufficient growth funds exist and have been recurring for several years, Colleges can request to have
them “hardened” which moves them out of the productivity funding model and places them in
permanent base funds. When productivity funds are hardened a portion of those funds must be
reallocated to the benefits pool to cover benefits. The amount that is taken for the benefits pool will be
negotiated by the College with the Senior Vice President of Academic Affairs, or Health Sciences.
Total amounts to be transferred to the College are shown in the column titled Pass July 1, XX Prod
Funds (where XX equals the fiscal year). The mid year adjustment which is made in March is also
listed. This adjustment is the amount of productivity funds either earned or lost during the year since the
original estimated amount was transferred in July.
The final column shows the total expected transfer to be made at the beginning of the new fiscal year.
This amount can be thought of as a pre-payment for productivity funds for the coming year, which
assumes you will have the same exact SCH in the new year as you did in the prior year. It is not a
payment for SCH that you “earned” during the current year.
Questions?
Please call Joyce Garcia at 581-6135 ([email protected]) with questions related to SCH
counts and reallocations.
Please call Mark Winter at 585-3982 ([email protected]) with questions related to budget
related calculations and reports.