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Performance-Based Budgeting

Performance-Based Budgeting. Steering Committee January 28 th , 2013. Agenda Introductions Where we left off (20 min.) PBB working group report –revenue and cost attribution tool (40 min). Revenue Costs (Direct and Indirect)

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Performance-Based Budgeting

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  1. Performance-Based Budgeting Steering Committee January 28th, 2013

  2. Agenda • Introductions • Where we left off (20 min.) • PBB working group report –revenue and cost attribution tool (40 min). • Revenue • Costs (Direct and Indirect) • Committee discussion of strengths and weaknesses of using the revenue and cost attribution tool to inform a budget model (60 min)

  3. Where we left off • 2011-2012 Built a Revenue and Cost Attribution tool – prelude to PBB • Essential for understanding our budgetary environment (long term: revenue = expenses) • Attribution tool is not the budget model • The attribution tool is not an SCH model. It examines the source of all revenue and attributes it accordingly . It will adjust to future changes (State Allocation based on degrees granted, credit for prior learning versus SCH) • Cross subsidies are acceptable, but must be understood and have an upper limit.

  4. What is in a name A common language • Attribution tool (AT) • Budget Attribution Tool (BAT) • Revenue and Cost Attribution Tool (RCAT)

  5. PBB Working GroupThe Revenue and Cost Attribution ToolSEE HANDOUT • Built using 2012-2013 budgets and current enrollment. • REVENUE • Tuition (Undergrad and Grad)Actual versus theoretical tuition collected, residency, differential, UNST classes, SCH redistributions, includes tuition from summer and Salem Center • Remissions • IDC (predicted, can be updated) • Targeted revenue • State Share of research funding • State Share of Instruction

  6. RCAT • EXPENDITURES • Direct Expenses • Summer Session and Salem Center Adjustments (1 year only) • NACUBO Categories- (expenditure classification by function)

  7. RCAT • INDIRECT EXPENDITURES • NACUBO Categories • Drivers per steering group recommendations

  8. Cost DriversAlternatives • Research – fixed per steering committee instructions (FEA- faculty FTE, research support- sponsored research $) • 2-Close Calls Institutional support and Indirect Component of O and M • Summary of effect of changing these drivers • Vote whether group wishes to change these 2 drivers

  9. Effect of Different Drivers vote 56% 19% 25 % ? 57% 37%

  10. Performance Based-Budgeting: strengths and weaknesses of using the RCAT to inform a budget model • Objectives • Get input from the group on the RCAT • At the end of today’s session we will have a better sense of: • It’s effectiveness for budget modeling • What modifications might be needed to the RCAT

  11. Questions for the Team • 1) What is in the RCAT that might make it an effective tool to inform a budget model? • 2) What is missing from the RCAT that prevents it from being an effective tool to inform a budget model? • a) which ones could be incorporated into the RCAT • b) which ones cannot be incorporated into the RCAT

  12. Work Session • Every member of the Steering committee uses as many post-it notes possible to provide responses to each of the questions (put your initials in the lower right corner) • Stick post-its randomly on the white board with the appropriate question number • Break up into assigned groups and categorize individual responses • Label the categories

  13. Group Conversation • Have a group conversation about the categories • Do they feel right? • What is missing?

  14. PBB- next steps…..

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