Performance-Based Budgeting

Steering CommitteeJanuary 28th, 2013

AgendaIntroductions

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)

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.

What is in a name A common language

Attribution tool (AT) Budget Attribution Tool (BAT) Revenue and Cost Attribution Tool

(RCAT)

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

RCAT

EXPENDITURES

Direct Expenses Summer Session and Salem Center

Adjustments (1 year only) NACUBO Categories- (expenditure

classification by function)

RCAT

INDIRECT EXPENDITURES

NACUBO CategoriesDrivers per steering group recommendations

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

Effect of Different DriversINSTITUTIONAL SUPPORT

Cost Driver UGE CLAS SSW SBA GSE MCECS FPA CUPA Total

Student, Faculty & Staff Headcount 50,544$ 11,124,858$ 1,031,982$ 3,115,147$ 1,449,575$ 2,645,555$ 2,451,158$ 2,896,750$ 24,765,570$ Student, Faculty & Staff FTE 1,674,998$ 12,529,519$ 782,350$ 2,339,343$ 1,773,164$ 1,457,363$ 1,837,261$ 2,371,572$ 24,765,570$ Net Effect of Change in Driver (1,624,454)$ (1,404,661)$ 249,633$ 775,804$ (323,589)$ 1,188,191$ 613,897$ 525,178$ -$

OPERATIONS & MAINTENANCECost Driver UGE CLAS SSW SBA GSE MCECS FPA CUPA Total

Student, Faculty & Staff FTE 1,442,630$ 13,119,151$ 1,126,328$ 2,098,800$ 1,675,063$ 3,225,190$ 3,304,710$ 2,952,702$ 28,944,574$ Student, Faculty & Staff Headcount 310,474$ 12,140,179$ 1,300,308$ 2,639,493$ 1,449,539$ 4,053,295$ 3,732,563$ 3,318,723$ 28,944,574$ Net Effect of Change in Driver 1,132,156$ 978,972$ (173,980)$ (540,693)$ 225,524$ (828,105)$ (427,853)$ (366,021)$ -$

56%19%25 % ?

57%37%

vote

Performance Based-Budgeting: strengths and weaknesses of using the RCAT to inform a budget model

Objectives

Get input from the group on the RCATAt 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

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

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

Group Conversation

Have a group conversation about the categories Do they feel right? What is missing?

PBB- next steps…..