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Budgeting at UNC Pembroke Enrollment Growth funding FY-2011 FACTS FY-2012 Planning. Board of trustees Meeting September 23, 2010. Purpose of Today’s Presentation. Develop a better understanding of State budgeting and the associated processes Discuss UNCP budgeting in detail.

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board of trustees meeting september 23 2010

Budgeting at UNC Pembroke

  • Enrollment Growth funding
  • FY-2011 FACTS
  • FY-2012 Planning

Board of trustees MeetingSeptember 23, 2010

purpose of today s presentation
Purpose of Today’s Presentation

Develop a better understanding of State budgeting and the associated processes

Discuss UNCP budgeting in detail

UNC Pembroke

why do we budget
Why do we budget?
  • The North Carolina Legislature and the State Constitution
  • The “State Budget Act” as defined in General Statue 143C-1-1 establishes procedures for the following:
    • Enacting the State budget
    • Preparing the recommended State budget
    • Administering the State budget.

UNC Pembroke

preparing the recommended state budget
Preparing the Recommended State Budget

North Carolina General Statute 143C-2-1 provides that the Governor is Director of the Budget. As such, the Director has responsibility to prepare and recommend the State budget, and the Director’s powers extend to all agencies, institutions, departments, bureaus, boards and commissions of the State of North Carolina.

UNC Pembroke

delegation of powers
Delegation of Powers

The Governor may -- and does -- delegate certain powers and authorities of the Governor as Director of the Budget to the Office of State Budget and Management (OSBM) (G.S. 143C-2-1(a)).

UNC Pembroke

office of state budget management
Office of State Budget & Management
  • The Governor has delegated the authority to OSBM to:
    • Prepare the recommended budget
    • Certify the ratified budget
    • Distribute the budget to state agencies
    • Monitor, report, and control the State budget.

UNC Pembroke

office of state budget management1
Office of State Budget & Management

Issues Biennial Instructions for Budget Preparation

Requests State Agencies Develop Budget Request

Prepares Economic and Revenue Forecast

Reviews Agency Budget Requests

Governor Finalizes Biennial Budget and Six-Year Capital Improvement Plan

UNC Pembroke

state budget development time line
State Budget Development Time Line

Governor Presents Budget Message to General Assembly

Presents Governor's Budget to General Assembly

Appropriation Subcommittees Review All Budget Requests

General Assembly Finalizes Budget and OSBM Certifies

UNC Pembroke

unc budget process
UNC Budget Process

Legal Basis

State Executive Budget Act

Higher Education Reorganization Act of 1971

Board of Governors’ Role:

Presents comprehensive financial plans to General Assembly

Modifies plans based on resources made available by Legislature

Establishes annual budgets which are administered by the constituent institutions

UNC Pembroke

unc budget process1
UNC Budget Process

“A single, unified recommended budget for all public senior higher education.”

Statute prescribes form of budget requests – three categories:

  • Continuing Operations (enrollment, utilities, vehicle replacement) – allocated to institutions
  • Academic Salary Increases – lump sum to Board of Governors and then allocated to campuses
  • Expansions/Reductions, when appropriate – by priority – lump sum to Board of Governors and then allocated to campuses

• New and expanded programs

• Capital improvements

• Increases to remedy deficiencies

UNC Pembroke

unc budget process2
UNC Budget Process

Key steps in process of budget preparation:

  • UNC President receives general instructions from Governor via State Budget Office.
  • Budget workshops are conducted separately with three groups:
    • UNC General Administration Council
    • Chancellors
    • Board of Governors

UNC Pembroke

unc budget process3
UNC Budget Process

Key steps in process of budget preparation: (continued)

  • In conjunction with the decisions reached at the budget workshops, instructions are provided to the campuses for preparation of institutional budget requests.

• Continuation budgets

• Academic salary increases

• Expansions and improvements

  • Chancellor is responsible for the preparation of budget requests for the institution and the assignment of any institutional priorities that may be applicable. The process of campus involvement is determined by the Chancellor, who appoints delegates to work with UNC General Administration.

UNC Pembroke

unc budget process4
UNC Budget Process

Key steps in process of budget preparation: (continued)

  • Institutional budgets are reviewed:

• Continuation Budget – reviewed by Vice President-Finance for general consistency and conformance.

• Academic Salary Increases – campus data reviewed by Senior Vice President for Academic Affairs and the Vice President-Finance in a similar manner to continuation budgets.

• Expansions and Improvements – reviewed by internal review committee, headed by Senior Vice President-Academic Affairs, composed of the General Administration Council.

UNC Pembroke

unc budget process5
UNC Budget Process

Key steps in process of budget preparation: (continued)

  • President confers throughout the process with the Chancellors.

• Afterward, Vice President-Finance prepares recommendations for Board and its Budget and Finance Committee.

  • After a final budget workshop for the full Board, the Budget and Finance Committee recommends the adoption to Board.
  • Board takes final action, then submits to Governor and Advisory Budget Commission

UNC Pembroke

unc budget process6
UNC Budget Process

Key steps in process of budget preparation: (continued)

President represents University in any hearings with Governor.

Governor forwards recommendations to General Assembly.

President, or his designees, represent University in Legislative hearings.

UNC Pembroke

enrollment budgeting overview
Enrollment Budgeting Overview

The SCH enrollment change formula is driven by the projected change in student credit hour (SCH) production as classified in a 12-cell funding matrix comprised of 4 areas of instruction assigned a cost category and 3 levels of instruction.

UNC Pembroke

overview
Overview

The three levels of instruction are undergraduate, masters, and doctoral. These three levels are based on differences in the cost of instruction associated with average class size.

UNC Pembroke

fundable or not fundable that is the question
Fundable or Not Fundable…That is the Question

In general, SCHs are fundable if they are derived from degree creditable instruction in the regular term (fall or spring semester) via on-campus or distance learning efforts.

SCHs are deemed non-fundable if covered by other state appropriations, or if tuition is set to cover the full cost of instruction.

UNC Pembroke

fundable
Fundable

Regular term degree credit instruction delivered on campus or at off-campus resident credit centers

Distance education degree credit instruction delivered to NC resident students, regardless of location, summer and regular academic year

Distance education degree credit instruction delivered to non-resident students within NC

Repeated courses

Degree credit instruction offered via electronic delivery

UNC Pembroke

non fundable
Non-Fundable

Non-degree-credit instruction

Certain instruction offered below the baccalaureate level

Instruction to students auditing courses

Instruction generating continuing education units (CEU’s)

On-campus instruction delivered during the summer term

Distance education delivered outside NC to non-resident students

Instruction to university employees where employee tuition waiver is claimed

UNC Pembroke

fy 2009 revenues
FY 2009 Revenues

UNC Pembroke

uncp budgeting process
UNCP Budgeting Process

Operational Funding

  • Over-arching parameters provided by VC for Business Affairs as set by General Administration.
    • Continuation Budget Request – developed and entered into GA budget system by Director of Budget and Financial Planning. Various divisional employees provide input especially facilities staff.

UNC Pembroke

uncp budgeting process1
UNCP Budgeting Process
  • Expansion and Reduction Requests
    • Divisional input solicited from appropriate departments, prioritized, and submitted to Budget Director.
    • Budget Director summarizes input to be shared with the executive staff (ES) and Chancellor.
    • ES sets University priorities.
    • Chancellor approves priorities or modifies.
    • Approved data entered into GA budget system.

UNC Pembroke

uncp budgeting process2
UNCP Budgeting Process
  • Capital Budgeting (new projects, appropriated and non-appropriated as well as repair and renovation requests)
    • Asst. VC for Facilities directs the process with direction given by General Administration.
    • Six year plans for new projects and for the repair and renovations.
    • Divisions- Request for projects or needs is made to departments and prioritized and shared with Asst. VC for Facilities.
    • Asst VC- Summarizes all requests by category. Shares with ES and Chancellor.
    • Chancellor- Approves or modifies the recommendations.

UNC Pembroke

uncp budget planning fy 2012
UNCP Budget Planning FY 2012

Budget Memo # 1

  • Expansion/Reductions
  • Submit top 3 expansion requests
  • Plan for 5% and 10% reduction of base budget
  • GA will request funds for enrollment growth
  • GA will consider requests for
    • Salary increases
    • Campus safety

UNC Pembroke

uncp budget planning fy 20121
UNCP Budget Planning FY 2012

General Planning Information

  • Tuition Increase Approved – 218/yr
    • 6,676 FTE @ $218 = $1,455,368
    • 9% Tuition increase
  • Additional Tuition Increase - $500/yr
    • 6,676 FTE @ $500 = $3,338,000
    • 20.6% tuition increase
  • Reductions
    • 5% = $3,000,000
    • 10% = $6,000,000
  • Prior Year Unallocated Enrollment Growth ???

UNC Pembroke

uncp budget planning fy 20122
UNCP Budget Planning FY 2012

Budget Memo # 2

  • Capital
    • Appropriated six year plan
    • Non-appropriated six year plan
    • Repair and renovations six year plan

UNC Pembroke

links for information
Links for Information

Instructions for Preparation of the 2011-13 State Budget http://www.osbm.state.nc.us/files/pdf_files/BudgetInstructions1_2011-13.pdf

The UNC Budget Development Process http://www.northcarolina.edu/finance/budget/Budget_Process.pdf

NC General Assembly Senate Bill 897 http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S897v8.pdf

Enrollment Change Funding Model http://qed.ncat.edu/ir&p/funding-manual.pdf

UNC Pembroke

budget decisions facts fy 2011
Budget Decisions/Facts FY 2011

How/what to fund from unallocated resources.

How current year decisions impact next year’s budget challenges.

Concern that many administrative departments are under funded and under staffed.

How to maintain current student/faculty ratios during this period of enrollment growth with budget reductions and reversions.

UNC Pembroke

budget facts options for fy 2012
Budget Facts/Options for FY 2012
  • Anticipated 10% budget reduction ($6.0M)
  • Approved tuition increase $218

(9% increase, $1.5M additional revenue)

  • Possible reversions (1%-3%)
  • Possible programmatic reductions (administrative and academic)
  • Consider possible additional tuition increases (per General Administration, up to $500/year 20% increase ,$3.4M)
  • Prior year unallocated budgets

UNC Pembroke