multi-year budget planning - provost · 2018-10-24 · krannert. office of the provost 25...
TRANSCRIPT
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O F F I C E O F T H E P R O V O S T
O F F I C E O F T H E P R O V O S T
Multi-year Budget Planning Strategies and Implementation Under the Budget Reform Initiative
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O F F I C E O F T H E P R O V O S T
• Motivation for multi-year planning
• Operational Excellence @ Illinois
• Budget reform parameters
• Dialogue
2
Outl ine
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O F F I C E O F T H E P R O V O S T
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O F F I C E O F T H E P R O V O S T
Multi-year PlanningPerspective
Incremental + Incentives +
Uncertainty
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O F F I C E O F T H E P R O V O S T
Why Multi-year Planning?
IdentifyOpportunities
Transparency
Uncertainty
Margins
Accountability
Focus on excellence
Conditions of
Consequences
ParticipatoryDecision-Making
Budget AwarenessComprehensivePlanning
PrioritizeOpportunities
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O F F I C E O F T H E P R O V O S T 6
O p e r a t i o n a l E x c e l l e n c e @ I l l i n o i s I n i t i a t i v e
Develop Smarter
BudgetingSystems
Innovate Processes and
Services
Manage Cash
Strategically
Streamline Decision Making
Enhance Productivity
Identify Cost and Scale
Efficiencies
Reduce Redundancies
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O F F I C E O F T H E P R O V O S T
Decl in ing Margins
-
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19estimated
UG Tuition Change from Previous FYNew UG Money
Note: $19 million increase Salary, Wages, Promotion, & Retention
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O F F I C E O F T H E P R O V O S T
Two Components of PlanningWhat impacts your budget allocation?
IUsMajors (UG, Grad & Professional)FTEICR GenerationSpaceUtilities UsageHistorical Expenditures
How do you plan to spend your allocation and other budget sources?
Faculty *Staff *Administration *Teaching/Research Assistants*ScholarshipsPlant transfersOther strategic prioritiesOther personnel expenses *Other nonpersonnel expenses…* separate new and continuing
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O F F I C E O F T H E P R O V O S T
Budget Reform Parameters
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O F F I C E O F T H E P R O V O S TO F F I C E O F T H E P R O V O S T
Integrated• Across disciplines,
mission areas • Within strategic
priorities • Via strategic plan
• Offers units flexibility in future plans
• Provides commitment to investments
• Ensures consistency with values, priorities, and excellence
Value-Centered
Integrated and Value-Centered Budgeting
INVEST IN EXCELLENCE ACROSS MISSION AREAS
Research • Teaching • Outreach
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O F F I C E O F T H E P R O V O S TO F F I C E O F T H E P R O V O S T
Budget Modeling • Revenue
o Tuitiono ICR
• Costs: space, utilities, technology
• College investments: administration, public goods, services
• University investments:campus, unit priorities
• Unit needs and wants• Best practices• Leadership training• Long-term forecasting• Collaborate w/System offices
- accounting infrastructure
Financial Management
Reporting
Processes &Practices
• Efficient processes• Effective & transparent
budget reviews • Decision-making at
the appropriate level• Streamline approval
processes
Integrated and Value-Centered Budgeting
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O F F I C E O F T H E P R O V O S TO F F I C E O F T H E P R O V O S T
CBATF Findings
• Transparency• Predictability• Encourage wise
stewardship• Accountability• Responsiveness to
strategic goals/priorities• Facilitate multi-year
planning• Stimulate appropriate
incentives
• Transparency• Accountability• Integrated• Value-centered• Trust and confidence• Comprehensive vision• Balance• Responsiveness to
internal and external factors
Budget Reform Implementation
• Transparency• Accountability• Predictability• Adaptability • No “right turns”• Transition time
Guiding Principles
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O F F I C E O F T H E P R O V O S T
Adequate Time to
Transition
EffectiveShort and Long Term Planning
Data Available at All Levels
Data Support Systems
Predictability Enhances Planning
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Critical Implementation Elements
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O F F I C E O F T H E P R O V O S T 14
Col lege Budget ing Framework
SOURCES of FUNDS:
TuitionIndirect Cost Recovery (ICR)University Value-Based Investment
Sources Total
USES of FUNDS:
Existing College BudgetFacilities, Utilities & Technology ServicesInvestment in Administration & Public Goods
Uses Total
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O F F I C E O F T H E P R O V O S T
Sources
State Appropriation
19%
Tuition67%
ICR14%
Campus Unrestricted Sources
$1.21 billion
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O F F I C E O F T H E P R O V O S T
E s t i m a t e d Tu i t i o n P a r a m e t e r s
Note: Need adjustments for 2019 projectionsAll differentials return to college + 20% of nonresident tuition returns to collegeGraduate and professional tuition return to college of enrollment
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O F F I C E O F T H E P R O V O S T
I n d i r e c t C o s t R e c o v e r y : C o l l e g e M a n a g e d
Facilities and Administration F&A
45% College Distribution Home of College PI
27% Attributed to Colleges
55% Campus Portion
Tuition Remission100% attributed to college enrollment of RA
28% Central Campus Cost Offset
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O F F I C E O F T H E P R O V O S T
I n d i r e c t C o s t R e c o v e r y : I R U M a n a g e d
Facilities and Administration F&A
45% College Distribution Home of College PI
27% Attributed to Colleges
55% Campus Portion
Tuition Remission100% attributed to college enrollment of RA
28% IRU
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O F F I C E O F T H E P R O V O S T
U s e s o f F u n d s
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O F F I C E O F T H E P R O V O S T 20
D i r e c t C o s t A s s e s s m e n t s B u i l d i n g a n d S p a c e
F&S Building Costs to Allocate Centrally-held budget
accounting for direct-billed services
Includes centrally-funded leases
F&S attributed costs from campus
Adjusted for direct billing by F&S for services
Centrally-budgeted costs added to cost of the F&S
Include indirect utility costs
WeightedBy Space Type Office
(DMI) Lab 100% Office 46% Classroom 37% Study 38% Special 37% General 37% Support 37% Health Care 100% Residential 100%
$13.24 to $13.75 per weighted NASF
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O F F I C E O F T H E P R O V O S T 21
C e n t r a l Te c h n o l o g y S e r v i c e s
Tech Services Costs to Allocate
Centrally-held budget adjusted for direct-billed services
Tech Services attributed costs from campus (utility, space, etc.)
Accounts for direct billing by Tech Services and library IT fee
Student weight 25% ($56 per UG, $1.90 per IU, $125 per grad) *
Employee weight 75% ($1,710 per weighted FTE)
* Estimates: will need to adjust for revised student FTE numbers
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O F F I C E O F T H E P R O V O S T 22
University System Office
Changing their budget model
Likely based on size of budgets among Universities
Neutral impact in first year
For an organizational charthttp://www.pb.uillinois.edu/documents/staffing/SO-Org-Chart.pdf
Incomplete list
President’s OfficeVP Academic AffairsUniversity Council
Business and Financial ServicesAccounting
AuditsPayroll
TreasuryCapital Financing
Cash ManagementRisk Management
Budget Planning \ReportingGovernment Relations
System HR Economic
Development/InnovationOTMAITS
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O F F I C E O F T H E P R O V O S T 23
Research and Campus Interdisciplinary Research Units
Institutes generate resources
Building, space, utilities and tech services costs added
Allocation: 25% on all expenditures (adjusted) 75% on research expenditures
OVCRBeckman
NCSAIGBiSEEIHSIIPRHPRI*
* PRI has a separately budget allocationfrom the state and costs are notallocated to the units.
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O F F I C E O F T H E P R O V O S T 24
Administrative and Campus Public Goods
Centrally-Budgeted Units
Costs allocated based on all expenditures (adjusted)
Incomplete list
LibraryEnrollment Management
Extension Grad CollegePublic Safety
OVCIACITL
Office of ProvostOffice of ChancellorHuman Resources
MuseumsKrannert
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O F F I C E O F T H E P R O V O S T 25
Investments, Initiatives and Risk Management
Risk Management Enrollment changes Shifts in demand across colleges Provide stability buffering in
costs/salary programs
Costs Allocated based on all expenditures (adjusted)
Incomplete list
Fire service contract Promotion and tenure
Hazardous wasteLeases
Grad assistant benefitsWorker’s comp
MedicareAdvancement road map
funding TOP
DUALRisk Management
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O F F I C E O F T H E P R O V O S T 26
College Investments in Administration and University Wide Excellence Estimated Parameters
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O F F I C E O F T H E P R O V O S T
• Hold cost parameters constant (possibly 3 years, aids predictability)
• Expenditures: 2-year average with 1-year lag (FY20 calc: average of FY17 & FY18)
• Research Expenditures: 2-year average with 1-year lag (FY20 calc: average of FY17 & FY18)
• Utilities: 2-year average with 1-year lag (FY20 calc: average of FY17 & FY18)
• FTE: Prior year October DMI snapshot (FY20 calc: October 2019 DMI)
• Student Numbers: Prior year October DMI snapshot (FY20 calc: October 2019 DMI)
• Square Footage: Prior year DMI snapshot (FY20 calc: October 2019 DMI code)
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Details
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O F F I C E O F T H E P R O V O S T
Fundamental Implementation Concepts
Campus investments (gray box) is used to bring all colleges to FY19 baseline
Changes from this baseline impact college budgets not absolute levels
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O F F I C E O F T H E P R O V O S T 29
College Budget Year-to-Year Changes
Baseline Tuition ICR
University Value –Based Investments
Majors Instructional
Units Graduate/prof.
tuition Centrally Funded
Financial Aid
ICR Generation Tuition
Remission
Transparent leadership discussions
State appropriation changes
Annual changes from baseline
Sources of Funds
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O F F I C E O F T H E P R O V O S T 30
College Budget Year-to-Year Changes
College BudgetSpace/Facilities
UtilitiesTech Services
Administration CampusGoods
Inflation Investments Staffing Benefit shift Other
operating costs
Space footprint Utility usage Students FTE Employees
Expenditures
Research expenditures
Baseline
Annual changes from baseline
Uses of Funds
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O F F I C E O F T H E P R O V O S T
Next Steps
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O F F I C E O F T H E P R O V O S T
• Update white paper version (3) & technical appendix• Make revisions to parameters• Meet with college teams in Nov to review baselines
• Make addition revisions to parameters/baselines
• Assist college teams with model and potential applications to departments
• Data available - unit levels
• Looking for colleges to develop 3 year plans this winter• Encourage transparent discussions• Campus focus on comprehensive budgeting – not transaction
budgeting
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What is next?
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O F F I C E O F T H E P R O V O S T
Discussion