Budget Update September 19, 2008. FY 2008 Spending Plan FY 2008 Spending Plan.

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Budget Update Budget Update September 19, 2008 September 19, 2008

Transcript of Budget Update September 19, 2008. FY 2008 Spending Plan FY 2008 Spending Plan.

Budget UpdateBudget UpdateSeptember 19, 2008September 19, 2008

FY 2008

Spending Plan

FY 2008

Spending Plan

TODAY’S BUDGET DISCUSSION WILL FOCUS ON FY2008 AND

FY2009 OPERATING BUDGETS –

This does not include funding for:

1. Capital Projects (new building)

2. Federal, State, and private grants (student aid)

3. Endowment – Scholarships

WHERE DOES THE UNIVERSITY RECEIVE WHERE DOES THE UNIVERSITY RECEIVE ITS RESOURCES?ITS RESOURCES?

FY2008FY2008

Student Tuition and Fees $78,400,258 Student Housing & Food 19,420,806 Other Student Fees (app fee, cont. enrollment fee) 4,536,083

– Total Collected from Students $102,357,147 (57%)

State Appropriation $48,371,011 Fringe Benefits (state contribution for

employee benefits) 24,357,107– Total State Support $72,728,118 (40%)– Other Revenue (rental, interest

earnings, commission) $5,645,238 (3%)

– Total Revenue FY2008 $180,730,503 100%

95.3% OF SOUTHERN’S REVENUE IS ENROLLMENT DRIVEN

Total Collected from Students $102,357,147

Appropriation basedon enrollment 69,849,793

$172,206,940

$172,206,940 / $180,730,503 = 95.3%

HOW ARE THE RESOURCES SPENT?

PERSONNEL

Full Time Personnel $65,510,293

Part Time Personnel 16,911,256

Additional Compensation(overtime, longevity) 4,159,384

Fringe Benefits 32,092,294 *

Total Personnel Costs $118,673,227(66%)

* State support is $24,357,107

OPERATING EXPENSES

Utilities $8,704,094 Institutional Financial Aid 7,259,423 Professional Services 5,556,605 Food Service Contract 5,255,285 Insurance 3,204,938 Repairs/maintenance Supplies 2,880,674 Library Materials/Books 2,204,510 Equipment 2,034,669 Other Expenses (travel, advertising,

office supplies, postage) 12,667,266

Total Operating Expenses $49,767,464(27%)

DEBT SERVICES (per BOT Policies)

System Debt Service $7,062,542

Parking/Residence

Hall Debt Service 4,906,068

Total Debt Service $11,968,610 (7%)

Total Expenses $180,409,301 100%

Total Favorable $321,202 *

* 1/5th of 1.0% of total budget

HOW ARE SCSU’S DISCRETIONARY DOLLARS USED TO SUPPORT FUNCTION/PROGRAM?

Instruction $63,851,016 43.50%Research 2,449,208 1.67%Academic Support 8,727,242 5.95%Library 6,449,292 4.39%Scholarships, Loans 7,668,049 5.22%Student Support Services 19,664,996 13.40%Institutional Support (Admin) 20,588,593 14.03%Physical Plant (Facilities) 16,952,650 11.54%Public Service 435,553 0.30%

FY 2008 NEW BUDGET INITIATIVES (1.4 million)

FY2008 SUMMARY

95.3% funding – student driven

61% of current budget – spent in support of academic programs

70% of new dollars = new faculty

FY 2009

Spending Plan

FY 2009

Spending Plan

BUDGET DEVELOPMENT FOR FY2009

December 2007 – January 2008

FY2008 mid-year review

Established 08-09 AY financial aid budget

Established guidelines for divisional budgets

February 2008 – April 2008

– Received preliminary FY2009 Spending Plan guidelines from CSU System Office

Estimated State Appropriation

Final enrollment numbers for state supported funding

Office of Policy & Management (OPM) Inflation factors

THE ORIGINAL BASE BUDGET FOR FY 2009IDENTIFIED A SHORTFALL OF $4.8 MILLION

($ WE NEED VS $ WE RECEIVE)WHY?

Original enrollment targets for FY 2008 were not achieved

+

Other CSUS Universities exceeded their enrollment goals

=

Reduced share of State Appropriation from fundable enrollment

Fundable EnrollmentCentral Eastern Southern Western

FY2007 Fundable Enrollment 6,955 3,443 7,172 3,694

FY2008 Fundable Enrollment 7,222 3,625 7,132 3,915

FY2008 Student Change 267 182 - 40 221 3.8% 5.3% - 0.6% 6.0%

FY2008 Original Enrollment Goals 0.1% 2 .8% 2 .0% 2 .0%

FY2008 Distribution Share 32 .71% 16.19% 33.73% 17.37%

FY2009 Distribution Share 32 .99% 16.56% 32 .58% 17.89%

Change in Distribution Share 0.26% 0.37% -1.15% 0.52%

Impact on Southern's FY2009 Budget

Distribution Percentage BudgetPool Change Change

206,180,993 x 1.15% = (2,371,081)

OTHER FACTORS THAT CONTRIBUTED TO SHORTFALL:

Revised CSUS distribution ($500,000 lost revenue)

The original budget assumed no vacant positions

Therefore…

Reexamined FY 2009 enrollment targets with the Enrollment Management Council

– FT undergraduate > +1.0%

– FT graduate > flat

Resulted in $500,000 increased revenue

Staggered hiring; kept some staff positions vacant resulting in $1.7 million

Reduced operating expenditures by $1.4 million

Utilize $1.2 million from Unrestricted Reserve Balance

NOTE: Reserves continue to be in compliance with BOT policy.

ESTIMATED CURRENT UNRESTRICTED RESERVES

Debt Service $8,600,544

Required per BOT Policy 9,303,668

Designated Reserves 4,373,251

TOTAL $22,277,463

May 2008 – July 2008

Balanced FY09 Spending Plan was presented to the Board of Trustees

o June 13, 2008 Reviewed by BOT

o July 17, 2008 BOT approves FY2009 Spending Plan

JULY 2008–GOVERNOR INITIATES A 3% RESCISSIONIMPACT BY EXPENSE CATEGORY

Full Time (turnover) ($200,000)University Assistants (295,948)Part Time Staff (193,534)Overtime (189,213)All Other P.S. (shift differential) (107,034)Fringe Benefits (667,719)Other Expenses (consulting & prof. services) ( 383,268)

Total ($2,036,716)

STRATEGIES THAT ARE BEING APPLIED TO MANAGE THE BUDGET:

• Focus of budget management is adherence to Strategic Plan

• Enrollment teams:o Enrollment Management Councilo Enrollment Operations Committeeo Summer Enrollment Committeeo Graduate Councilo Deans Council

• Energy Conservation:o Locked rate for electricityo Planned reverse auction for natural gaso Conservation initiatives (switches, controls, temp.

regulation & light bulbs)o New electrical & mechanical systems for Earl Hall,

Jennings & Lyman

• Facility Usage:o Ensure that we are recovering our costs for outside

facility rentalo Pursue opportunities to increase other revenue streams

• Vigilance on the expense side of the budget

HIRING FREEZE - EFFECTIVE MAY 29, 2008

• All administration and faculty positions are covered by the freeze

• University may request an exemption for public health and safety reasons

• Every effort must be made to minimize overtime expense

• There will be no relief from the part-time cap in the current AAUP collective bargaining agreement

• Use of outside consultants will be closely scrutinized

• Any management positions that become vacant in the Fall 2008 will remain vacant at least until January 2009

OUT-OF-STATE TRAVEL – RESTRICTION

May 29, 2008 – Chancellor Carter requested the university presidents to authorize out-of-state travel requests that are “deemed essential to university business.”

Exceptions are:• Contractually–mandated travel• Student clubs/organizations funded from student

activity funds• Grant funded travel

Quarterly reports to demonstrate savings If savings are not apparent, then an overall

moratorium will be placed on out-of-state travel

WHERE ARE WE NOW?

1. Expecting another 2% rescission

2. Developing strategies to increase enrollment where we have interest and capacity (Graduate School)

3. Focusing on recruitment of transfer students (Compac Agreements)

4. Working to retain undergraduate students through to graduation