Budget OfficeDivision of Business and Finance

DEVELOPING A UNIVERSITY-WIDE BUDGET

An Overview of the External Budget Development Process

Total Current Funds - Unrestricted and Restricted

At USC, this includes funds:

A, B, C, D, E, F, G, H, J, K, L, S, R & RP

Excludes funds:

T, V, W, X, Y & Z

At the state level, our funds are:

General Funds (state appropriations)

Other Funds (also called earmarked funds)

Restricted Funds

What is the University-Wide Budget?

UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLYSummary of Current Funds Revenue

1996-2006

ACTUAL FY 1996

ACTUAL FY 2005

TEN YEAR CHANGE

BUDGET FY 2006

Tuition and Fees 97,475,826 201,309,864 103,834,038 207,157,910 % of Total Revenue 27.3% 32.3% 106.5% 33.1%

State Appropriations 132,913,554 132,240,959 (672,595) 138,415,181 % of Total Revenue 37.2% 21.2% -0.5% 22.1%

Gifts, Grants and Contracts 69,621,484 200,051,679 130,430,195 176,227,793 % of Total Revenue 19.5% 32.1% 187.3% 28.1%

Sales & Services and Other Sources 20,260,276 9,229,441 (11,030,835) 14,077,609% of Total Revenue 5.7% 1.5% -54.4% 2.2%

Sales & Services Auxiliary Enterprises 37,345,276 80,505,680 43,160,404 90,374,539% of Total Revenue 10.4% 12.9% 115.6% 14.4%

TOTAL CURRENT FUNDS REVENUE 357,616,416 623,337,623 265,721,207 626,253,032% of Total Revenue 100% 100% 74.3% 100%

10 Year Growth in Current Funds Revenue 74.3%

UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLYSummary of Current Funds Revenue

FY2006 Budget

Tuition and fees33.1%

Grants, contracts, and

gifts28.1%

Sales and service educational and other sources

2.3%

Sales and service auxiliary

enterprises14.4%

State Appropriations

22.1%

*Does not include School of Medicine

ACTUAL FY 1996

ACTUAL FY 2005

TEN YEAR CHANGE

BUDGET FY 2006

Instruction 126,319,671 178,257,640 51,937,969 213,876,865 % of Total Current Funds 35.4% 29.0% 41.1% 32.3%

Research 41,910,018 93,412,816 51,502,798 95,049,115 % of Total Current Funds 11.7% 15.3% 122.9% 14.4%

Public service 24,989,211 37,330,615 12,341,404 34,574,317 % of Total Current Funds 7.0% 6.1% 49.4% 5.2%

Academic support 31,849,449 48,833,099 16,983,650 48,238,983 % of Total Current Funds 8.9% 8.0% 53.3% 7.3%

Student services 10,694,125 16,117,563 5,423,438 26,865,558 % of Total Current Funds 3.0% 2.6% 50.7% 4.1%

Institutional support 28,050,151 23,796,442 (4,253,709) 34,566,886 % of Total Current Funds 7.9% 3.9% -15.2% 5.2%

Operation and maintenance of plant 21,412,714 34,944,390 13,531,676 38,011,819 % of Total Current Funds 6.0% 5.7% 63.2% 5.8%

Scholarships and fellowships 18,544,116 75,816,731 57,272,615 79,291,214 % of Total Current Funds 5.2% 12.4% 308.8% 12.0%

TOTAL EDUCATION & GENERAL EXPENDITURES 303,769,455 508,509,296 204,739,841 570,474,757

Net Mandatory and Non-Mandatory Transfers 11,065,410 30,324,727 19,259,317 19,733,998 % of Total Current Funds 3.1% 5.0% 174.0% 3.0%

Auxiliary enterprises 42,302,219 72,815,231 30,513,012 69,314,217 % of Total Current Funds 11.8% 11.9% 72.1% 10.5%

TOTAL CURRENT FUNDS EXPEND. & TRANSFERS 357,137,084 611,649,254 254,512,170 659,522,972

UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLYSummary of Current Funds Expenses

1996-2006

10 Year Growth in Current Funds Expenditures 71.3%

UNIVERSITY OF SOUTH CAROLINA – COLUMBIA ONLYSummary of Current Funds Expenses

FY2006 Budget

Instruction32.4%

Research14.4%

Public service5.2%

Academic support7.3%

Student services4.1%

Institutional support5.2%

Operation and maintenance of

plant5.8%

Scholarships and fellowships

12.0%

Auxiliary Enterprises

10.5% Transfers3.0%

*Does not include School of Medicine

USC Campuses

USC Columbia USC Aiken

USC Lancaster USC Beaufort

USC Salkehatchie USC Upstate

USC Sumter USC Union

Senior and Regional Campuses account for over $200M (24%) of the Total Current Funds of USC

Enrollments on these campuses are 30% of USC’s total student count

External Budget Development & Execution

Budget Development

Commission on Higher Education

Governor

General Assembly

Budget Execution

Budget & Control Board

State Treasurer

Comptroller General

The South Carolina Commission on Higher Education (CHE) operates pursuant to South Carolina Code of Laws (Title 59, Chapter 103) to serve as the coordinating board for South Carolina’s 33 public institutions of higher education.

The major functions are: advocacy and coordination, information services, accountability, and administration.

The CHE is organized into four divisions: Academic Affairs and Licensing, Finance, Facilities and Management Information Services, Student Services, and Access and Equity.

Mission Resource Requirements Model Performance Funding Reporting Below the Line Requests Capital Budget Requests Access & Equity Funding Academic Endowment Incentive Lottery Funds – Scholarships

Commission on Higher Education

Sector I – Research InstitutionsUSC Columbia (includes School of Medicine)ClemsonMUSC

Sector II – Teaching InstitutionsThe Citadel LanderCoastal Carolina SC StateCollege of Charleston USC AikenFrancis Marion USC BeaufortUSC Upstate Winthrop

Sector III – Regional CampusesUSC Lancaster USC SumterUSC Salkehatchie USC Union

Sector IV – Technical Colleges (16)

Commission on Higher Education – Public Institutions

South Carolina’s 33 higher education institutions are split into four sectors

Act 359 passed in 1996 gave authority to the CHE to submit the annual budget request for all of higher education and to establish the funding methodology for all institutions based on the institution’s achievement of performance funding standards.

As part of the implementation of performance funding, the CHE designed the Mission Resource Requirements (MRR) to provide an estimate of the budget needs of all public institutions.

Commission on Higher Education

Performance Funding & Mission Resource Requirements

The MRR is a 10 step model:

Step 1: Instruction: Three year average credit hour production by discipline Pre-determine student/faculty ratio Pre-determine faculty salary average Allowance for fringes

Step 2: Research Calculated at 30% of sponsored research expenditures

Step 3: Public service Calculated at 25% of sponsored public service and non-general fund public service

expenditures

Step 4: Libraries Prior year’s expenditures per FTE inflated by HEPI

Step 5: Student Services Prior year’s expenditures per headcount inflated by HEPI

Mission Resource Requirements

Step 6: Physical Plant Calculated by five formulas for general services, building maintenance, custodial services,

grounds maintenance and utilities

Step 7: Administration Calculated at 25% of Steps 1-6

Step 8: Total Education & General Cost Sum of Steps 1-7

Step 9: Revenue Deduction Target revenue based on 50% of in-state undergraduate student revenue and 100% of out-

of-state undergraduate revenues Actual fee revenues are deducted for graduate students Medical students are calculated at 30% in-state and 75% out-of-state

Step 10: State Support Needs Amount Step 8 less Step 9

Mission Resource Requirements – continued

FY 2005-2006 Mission Resource Requirements

Mission Resource Requirements – FY 2005-2006

All South Carolina Public Institutions

MRR - ALL INSTITUTIONS

Step 1 Instruction 1,097,870,413 Step 2 Research 87,577,791 Step 3 Public Service 21,077,020 Step 4 Libraries 78,904,694 Step 5 Student Services 149,794,112 Step 6 Physical Plant 150,532,220 Step 7 Administration 411,508,028

Step 8 Subtotal E & G 1,997,264,278

Step 9 Revenue Deduction (860,127,447)

Step 10 Total State Funding Needed 1,137,136,831

Total Recurring State Appropriations 651,086,444

Unfunded Higher Education Need 486,050,387$

USC Columbia’s performance funding score is consistently one of the highest in the state with a “substantially exceeds requirements” rating – but no new funds are currently tied to performance funding.

USC Columbia

MRR - USC Columbia

Step 1 Instruction 219,594,170 Step 2 Research 24,107,092 Step 3 Public Service 9,416,749 Step 4 Libraries 20,191,273 Step 5 Student Services 21,306,278 Step 6 Physical Plant 36,845,258 Step 7 Administration 86,336,088

Step 8 Subtotal E & G 417,796,908

Step 9 Revenue Deduction (199,832,695)

Step 10 Total State Funding Needed 217,964,213

Total Recurring State Appropriations 160,024,457

Unfunded USC Columbia Need 57,939,756$

Mission Resource Requirements – FY 2005-2006

Change in State Appropriations - Columbia Campus (excludes School of Medicine)

USC Columbia FY 1996 FY 2006

State Appropriations $132,913,554 $138,481,591

% of Total Current Fund Revenue 37.2% 22.1%

*Does not include School of MedicineReduction in State Appropriations FY2001 to FY 2006 - over $45,000,000

State Funding Changes – Columbia Campus(excludes School of Medicine)

New state funding is for designated purposes, not for general operationsThese new funds do not offset the over $45M reduction in state funding Pay package increases require a commitment of University dollars as the state covers approximately two-thirds of the increaseFor FY2005 the USC amount of the 3% pay package was $1,483,041For FY2006 the USC amount of the 4% pay package was $2,457,957

Institute for Public Service and Policy Research 716,454Small Business Development Center 686,534African-American Professors Program 178,805Law Library 344,074Nano-Technology 1,000,000Hydrogen Research 1,000,000School of Public Health - Epilepsy 75,000

Total 4,000,867

Palmetto Poison Control Center 200,000

Below-The-Line Funding

Below-The-Line Funding (Non-Recurring)

Augusta Baker Chair in Childhood Literacy 1,500,000 Deferred Maintenance 475,000 Gambrell Hall Renovations 500,000 West Campus Safety Improvements 400,000 Steamline Replacement/Repair 500,000

Note: These items are not included in the USC "A" funds

operating budget as their purpose is restricted.

Special Funding - Restricted - Non-Recurring

USC Columbia State Appropriations - Below-the-Line and Special Funding

Columbia Campus State Appropriations and Tuition & Fees

Tuition & Appropriation

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

$220,000,000

2001 2002 2003 2004 2005Tuition

Appropriation

USC Columbia Campus Enrollment Headcount History

Enrollment Headcount

20000

21000

22000

23000

24000

25000

26000

27000

28000

1998 1999 2000 2001 2002 2003 2004 2005

State Detail Budget Submission - “Line-item” Budget Report three years each fall: actual for fiscal year just ended,

update current year for legislative changes, and plan next fiscal year Establish spending authority for all unrestricted and restricted funds

Governor’s Submissions Operating & capital requests and provisos Agency Activity Inventory New for FY2007 – Agency Accountability Report based on Baldrige

criteria (in conjunction with Institutional Planning and Assessment)

Fiscal Impact Statements Throughout legislative session, complete fiscal statements with USC

impact from various legislation

Budget & Control Board - Office of State Budget

Timeline

FY2006 FY2007 FY2008January Execution PreparationFebruary Execution DevelopmentMarch Execution DevelopmentApril Execution DevelopmentMay Execution Development Below the Line RequestJune Execution Development Agency Activity InventoryJuly Clean up/ Carryforward Implementation CHE PresentationAugust Clean up/ Carryforward Execution Baldrige Accountability Report & Governor's RequestSeptember Variance Execution OSB Line ItemOctober Reporting Execution OSB Line ItemNovember Execution Submit info to CHEDecember Execution Submit info to CHE

QUESTIONS