1 / 30

Community College Budgets: Process and Prospects

Community College Budgets: Process and Prospects. Jennifer Haygood, EVP and Chief Financial Officer North Carolina Community College System. Overview. Overview of State and NCCCS Budget Budgeting Process College Budget Allocation Process On the Horizon: Prospects for the Future

dick
Download Presentation

Community College Budgets: Process and Prospects

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Community College Budgets:Process and Prospects Jennifer Haygood, EVP and Chief Financial Officer North Carolina Community College System

  2. Overview • Overview of State and NCCCS Budget • Budgeting Process • College Budget Allocation Process • On the Horizon: Prospects for the Future Please feel free to ask questions at any point!

  3. State General Fund Budget by Revenue Source: FY 2011-12 (in millions) Source: Fiscal Research Division, August 8, 2011

  4. FY 2013-14 State General Fund Budget • Of the State funds allocated to community colleges for current operating: • 83% supports direct classroom instruction (66%) and academic and student support (17%). • 90% supports salaries and benefits of community college employees.

  5. State General Fund Appropriations for Education:FY 2013-14 (in millions)

  6. Financial Support of Institutions State G.S. 115D-31 • Operating costs for instruction, administration, and support services Local G.S. 115D-32 • Operation and maintenance of plant Capital construction is the legal responsibility of the county. However, G.S. 115D-31 authorizes the State to provide capital funds to local institutions, provided that it is matched on a dollar-to-dollar basis.

  7. Sources of NCCCS Funding:FY 2013-14 (in millions) Total: $1.8 billion Source: August 2012 BD-701, DCC 2-1 Summary. Includes college current expense (Purposes 1XX-6XX) and equipment; chart does not include proprietary activities, student aid, and capital improvement projects.

  8. NCCCS State Budget: FY 2002-2014 Budget Drivers: Enrollment Growth and Salary Increases Source: BD 701: FY 2002-2013 June 30 Authorized Budgets, FY 2013-14 Aug 31 Authorized Budget

  9. NCCCS State Budget: FY 2002-2014 Source: BD 701: FY 2002-2013 June 30 Authorized Budgets, FY 2013-14 Aug 31 Authorized Budget

  10. Biennial Budget Cycle: FY 2013-15 • Summer and Fall 2012: • Develop continuation budget • Develop expansion budget request • Identify reduction options • 2013 Long Session (begins in January): • Adopt a two-year budget • 2014 Short Session (begins in May): • Adjust second year of the budget

  11. The Gubernatorial Process • Per the NC Constitution, the Governor shall: • Serve as “Director of the Budget” • Prepare and recommend a budget to the General Assembly • Administer the budget as enacted by the General Assembly

  12. Legislative Budget Process Governor’s Recommended Budget Full Appropriations Appropriations Subcommittees Full Appropriations House/Senate Floor Sent to Other Chamber House and Senate Appoint Conferees House and Senate Vote on Conference Report Conference Report Adopted Budget Bill Enrolled, Ratified, and Sent to the Governor to be Signed into Law The House and Senate alternate preparation of the initial budget bill. Originating Chamber Fails to Concur The Conference Report must be voted up or down as submitted by the conference committee; it cannot be amended on the House or Senate floors. Gov. veto can be overridden by 3/5 vote of each chamber.

  13. State Board Approval • State Aid Allocations and Budget Policies • Guidelines Related to Salaries and Benefits of Community College Employees • Formula and Categorical Allotments • Use of State Funds and Budget Flexibility • Tuition and Fees • Other Budget Policy Issues

  14. College Allotments: FY 2013-14 59% Total Allotments: $1.41 billion Less Management Flex Cut: $0.07 billion Net Allotments: $1.34 billion 34% 4% 2% .3% Source: FY 2013-14 Summary of Budget Allocations. Note that this graph only captures funds distributed to colleges through the routine budget allocation process. This graph does NOT account for any subsequent reversions required by the Governor or allocations.

  15. Full-Time Equivalent (FTE) Student • Curriculum FTE = 16 hours x 16 weeks x 2 semesters = 512 Membership Hours • Non-Curriculum FTE = 16 hours x 16 weeks x 2 semesters + 16 hours x 11 Weeks = 688 Membership Hours

  16. Budgeted FTE • Budgeted FTE means the number of FTE which determines a college’s operating budget • Curriculum budgeted FTE counting period = Fall, Spring (academic year) • Non-curriculum budgeted FTE counting period = Spring, Summer, Fall (calendar year)

  17. Budget FTE • For each instructional area (curriculum, con ed, and basic skills), a college’s budget FTE is determined by calculating the higher of : • the prior year; or • the average of the two previous years’ enrollment • Budget FTE are further categorized based on actual FTE proportions : • Curriculum: • Tier 1: FTE in high cost areas of health care, technical education (construction, engineering, industrial systems, and transportation system sciences), lab-based science, and college-level math courses • Tier 2: All other curriculum FTE • Con Ed (OE): • Tier 2: Con ed courses that are a) mapped to a third-party credential, certification, or industry-designed curriculum and b) are 96 hours in length. • Tier 3: All other con ed FTE • Basic Skills FTE: All Basic Skills FTE are designated Tier 2.

  18. Curriculum Instruction Allotment Example College: Curriculum FTE – 1,500 Con Ed FTE – 600 Basic Skills FTE - 115 Step 1 Base Allotment: $383,579 Step 2Multiply Tier 1 BFTE by Tier 1 equivalent value: = 500 X $3,636.31 = $1,818,155 Step 3 Multiply Tier 2 BFTE by Tier 2 equivalent value: = 1,000 X $3,160.79 = $3,160,790 FY 2013-14 Equivalent Values Tier 1: $3,636.31 Tier 2: $3,160.79 Step 4Sum steps 1 through 3: $5,362,524 Total Curriculum Allotment: $5,362,524

  19. Con Ed Instruction Allotment Example College: Curriculum FTE – 1,500 Con Ed FTE – 600 Basic Skills FTE - 115 Step 1 Base Allotment: $63,930 Step 2Multiply Tier 2 BFTE by Tier 2 equivalent value: = 300 X $3,160.79 = $948,237 Step 3 Multiply Tier 3 BFTE by Tier 3 equivalent value: = 300 X $2,685.38 = $805,614 FY 2013-14 Equivalent Values Tier 2: $3,160.79 Tier 3: $2,685.38 Step 4Sum steps 1 through 3: $1,817,781 Total Curriculum Allotment: $1,817,781

  20. Basic Skills Formula Calculation Example College: Curriculum FTE – 1,500 Con Ed FTE – 600 Basic Skills FTE - 115 • Step 1FTE Allotment: • State: 115 X $2,545.30 = $292,710 • Federal: 115 X $ 615.49 = $ 70,782 • 115 X $3,160.79 = $363,492 • Step 2Performance-Based Allotment: • GEDs/AHS Diplomas Awarded = 100 • 100 X $874.53 = $87,453 • Step 3Sum steps 1 through 2: $450,945 • FY 2013-14 Values • FTE Allotment: • Tier 2: $3,160.79 • State: $2,545.30 • Federal: $615.49 • Performance-Based Allotment: • $874.53 per GED/AHS Diploma Total Basic Skills Allotment: $450,945

  21. Institutional Support Calculation Example College: Total Budgeted FTE 2,215 • Step 1 Base allotment: $2,154,280 • Step 2 MCC Allotment (if applicable): $0 • Step 3 Enrollment Allotment: • Calculate allowable FTE: 2,215 – 750 = 1,465 • Calculate FTE allotment: 1,465 x $1,676 = $2,455,340 • Step 4 Determine President’s Salary with Salary Schedule • Total President’s Salary Requirements: $144,477 • Step 5 Sum steps 1 through 4: $4,754,097 FY 2013-14 Values Base Allotment $2,154,280 MCC Allotment (if applicable) Level 1: $500,919 Level 2: $839,311 Enrollment Allotment $1,676 per FTE above 750 President’s Salary Per Salary Schedule Total Administrative Allotment: $4,754,097

  22. Why Do the Formula Factors Change? • Legislative salary increases (if provided) • Other changes in benefit rates (i.e. hospitalization, retirement) • Legislative or State Board adjustments to the formula

  23. Performance-Based Allocations In FY 2013-14, $9 million was allocated to colleges based on performance on six performance measures: • Success rates of developmental students in subsequent college-level English courses • Success rates of developmental students in subsequent college-level math courses • Progress of first-year curriculum students • Curriculum student retention and graduation • Attainment of licensure and certifications by students • Performance of students who transfer to a four-year institution In FY 2014-15, the General Assembly has directed the State Board to allocate $24 million based on performance. In addition to the six measures above, two additional measures will be added: • Progress of basic skills students • Attainment of GED diplomas by students For each measure, funds are allocated based on two factors: • Quality: Funds allocated based on percentage of students who succeed on each measure • Impact:Funds allocated based on the number of students who succeed on each measure

  24. Rewarding Quality: In Concept • For each measure, colleges would earn PBF based on how they compared to both a floor and a goal: • If a college did not meet the floor, it would receive $0 in PBF for that measure. • If a college exceeded the floor, but did not meet the goal, it would receive a portion of its potential PBF for that measure. • If a college met the goal, it would receive 100% of potential PBF for that measure. • If a college exceeded the goal, it would receive more than 100% of potential PBF for that measure. Goal Floor

  25. Rewarding Impact: In Concept • Funds not allocated through the Quality component would be allocated among colleges through the Impact component. • Impact = the number of students that succeed on the measure • Step 1: Determine Impact Funding = Total PBF Funding – Quality Allocation • Step 2: Determine Impact Funding per Student = Impact Funding / Total # of Successful Students • Step 3: Determine College’s Impact Allocation = Impact Funding per Student * College A’s # of successful students

  26. Example College’s Total Formula Allotment • Curriculum: $5,362,524 • Continuing Education: $ 1,817,781 • Basic Skills: $ 450,945 • Institutional Support: $ 4,754,097 • Performance-Based Funding: $ 78,252 Total Formula Allotment: $12,463,599

  27. Budget Flexibility • The General Assembly has allowed colleges to have flexibility in order to meet individual college needs • Formulas are for allocation purposes only • Colleges can spend the money however they choose with the following exceptions: • Basic Skills funding may only be used for basic skills programs • Federal vocational education funding may not be transferred • Customized Training funds may not be transferred • Certain State-supported allocations approved by the State Board outside the budget package

  28. On the Horizon: Summer Term FTE • Section 10.4 of S.L. 2013-360 amends G.S. 115D-5:“Community colleges may teach technical education, health care, developmental education, and STEM-related courses at any time during the year, including the summer term. Student membership hours from these courses shall be counted when computing full-time equivalent students (FTE) for use in the budget funding formulas at the State level.” • Effective Summer 2014 term

  29. On the Horizon: Fourth Tier? • Section 10.4A of S.L. 2013-360: “It is the intent of the General Assembly that, beginning with the 2014-15 fiscal year, the State Board of Community Colleges shall implement a fourth tier….in order to fund curriculum programs leading to immediate employment at the highest available funding level.”

  30. On the Horizon: NC GAP? • Section 11.17 of S.L. 2013-360, as amended:“The Joint Legislative Education Oversight Committee…shall study the feasibility of establishing an alternative admission program to be known as NC Guaranteed Admission Program (NC GAP).” The goals of NC GAP shall be : • To encourage and assist students to obtain a baccalaureate degree within a shorter time period; • To provide students with a college education at significantly lower costs for both the student and the State; • To help decrease the amount of debt resulting from loans that a student may owe upon graduation; and • To provide easier access to academic counseling.

More Related