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Directives set at the October 2011 BOT retreat…

1. Improve undergraduate education2. Initiate renewing 150‐year‐old campus facilities

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The 2012‐2013 Operating and Capital Budget identifies how we will spend resources to advance goals priorities identified in the University’s strategic plan

Goal 1: Prepare students for leading roles in an innovation‐driven economy and global society

Goal 2: Promote research and creative work to increase the intellectual, social, and economic capital of Kentucky and the world beyond its border

Goal 3: Develop the human and physical resources of the University to achieve the institution’s Top 20 goals

Goal 4: Promote diversity and inclusion

Goal 5: Improve the quality of life of Kentuckians through engagement, outreach and service

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2012‐2014 Budget DevelopmentGuiding Principles

• Affordability for students and their families• Protecting as much as possible the teaching of students• Ensuring that direct patient care is not compromised• Finding ways to invest in our people• Finding ways to invest in our campus ‐‐ better living, learning, research and work space of our faculty, students and staff

• Flexibility and longer‐term planning with biennial budget

• Support excellence and improvement

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Budget Development TimelineDate ActivityFall 2011 Budget development process began with collecting revenue estimates; fixed 

cost increases; and programmatic budget requests

Jan 3 General Assembly convened

Jan 4 Governor’s Budget Address

March 30 General Assembly enacted a budget

April 11 Governor approved budget with line‐item vetoes not impacting UK appropriation

April 20 CPE adopted tuition parameters

May 1 Units submitted preliminary FY13 reallocation plans for review

May 8 UK Board of Trustees approved 2012‐13 tuition and fee rates

June 19 Board of Trustees approves FY 2012‐13 Operating and Capital Budget

June 21 CPE approves 2012‐13 tuition and fee rates

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$295$289

$288$280

$306$312

$335

$310 $311

$307$303

$200

$220

$240

$260

$280

$300

$320

$340

University of KentuckyState Appropriations Support (in millions)

Actual Original Budget

$284 $284

*Includes ARRA funds of $21.1 million in 2009‐10 and $17.3 million in 2010‐11

Revenues

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Revenue Sources

$0$50

$100$150$200$250$300$350

FY07 FY08 FY09 FY10 FY11 FY12*

$155 $138 $138

$227

$167 $153

$280$247 $258

$338$299

$278

Sponsored Project Awards

Federal Total*Estimated

$30.9 

$33.3  $33.9 

$30.1 

$30.2 

$24.5 

$17.7 

$0$5

$10$15$20$25$30$35$40

Endowment and Investment IncomeOriginal Proposed Budget (in millions)

Realized F&A IncomeFY2009 $44.5 millionFY2010 $50.6 millionFY2011 $52.8 millionFY2012* $50.3 millionFY2013* $45 million*Estimated

Tuition and Mandatory Fee Revenue

$255 $265 $284 $289$314

$339

 ‐ 50

 100 150 200 250 300 350 400

FY08 FY09 FY10 FY11 FY12 FY13

Millions

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Student Profile 

Status Residency Classification

Part‐time3,010 

Non‐resident 7,008 

Full‐time25,084 

Resident 21,086 

Grad/Prof7,942 

FTFR*4,139

Other UG16,013

Fall 2011

*FTFR – First‐time freshman 3,8654,110 4,153 4,328 4,139 4,500

4,800

 ‐

 500

 1,000

 1,500

 2,000

 2,500

 3,000

 3,500

 4,000

 4,500

 5,000

Fall First‐time Freshman Cohort

Non‐Resident ResidentFall 07       Fall 08     Fall 09      Fall 10     Fall 11      Fall 12      Fall 13

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Student Profile(Cost and Affordability)

Percentage ChangeUnder‐graduateResident  Annual

4 Year  Average

03‐04 $ 2,274  14.4%04‐05 $ 2,583  13.6%05‐06 $ 2,906  12.5%

06‐07 $ 3,255  12.0% 13.1%07‐08 $ 3,548  9.0% 11.8%08‐09 $ 3,868  9.0% 10.6%09‐10 $ 4,062  5.0% 8.8%10‐11 $ 4,305  6.0% 7.3%11‐12 $ 4,564  6.0% 6.5%12‐13 $ 4,843  6.0% 5.8%13‐14* $ 4,983  3.0% 5.3%

*Preliminary

$(948)

$1,209 

$2,250 $2,476 

 $(1,000)

 $(500)

 $‐

 $500

 $1,000

 $1,500

 $2,000

 $2,500

 $3,000

Lowest AvgFamily Income

$14,544

Low‐Mid AvgFamily Income

$56,873

Mid‐HighFamily Income

$94,191

Highest AvgFamily Income

$171,293

Average gross tuition and mandatory fees billed = $4,579 based on full‐time dependent undergraduate Kentucky resident student and does not includecosts for room and board or other ancillary costs associated with attendance.Net tuition is calculated as the total tuition and mandatory fees billed less total student financial aid from all scholarships & grants.  Student loans or work study wages are not included in financial aid amount.

Fall 2011 Full‐time Dependent Undergraduate Kentucky ResidentsAverage Net tuition by Income Quartile

(8,219 students)

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Tuition & Mandatory Fees Per Semester Rate

University of KentuckyConsolidated Budget (in billions)

$1.3$1.5

$1.8

$2.2$2.5

$2.7 $2.6

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

37%

40%

7%16% Hospital

General Fund

Auxiliary Fund

Restricted

Revenues

48%

42%

5%2%3% Expenditures

Personnel

Operating Expenses

Student Financial Aid

Capital Outlay

Debt Service

The decline in the UK consolidated budget from FY 2011‐12 to FY 2012‐13 is primarily the result of a reduction in projected fund balances and a change in GASB accounting practices regarding the reporting of bad debt expense, both of which are related to UK HealthCare. FY 2011‐12 included an exceptionally high level of fund balances due to the timing of the receipt of patient care reimbursements from prior years during May and June 2011. As a result of the accounting change, patient care revenues are reflected net of bad debt expense effective with FY 2012‐13. In prior years, patient care revenues were reported gross and bad debt was reported as an operating expense. This change in the accounting practice created a $139 million variance in revenues and expenses. If the accounting practice had not changed, the FY 2012‐13 consolidated budget would have increased by $59 million over the FY 2011‐12 budget instead of decreasing by $80 million.

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Where the money comes from and what it pays for2012‐13 Operating Budget ‐ $2.6 Billion) 

6%

13%7%

Auxiliary Funds

Money comes from:• UK Athletics • Housing• Dining• Parking

Pays for:• Self‐supportingauxiliary units pay all theirexpensesand receive no taxpayer or tuitionsupport

Restricted Funds

Money comes from:• Research grants and contracts

• Endowment income• Gifts• Federal and state student aid        

Pays for:• Research• Scholarships• Public service

Fund Balance

Money comes from:• Savings from prior years

Pays for:• Capital projects• Faculty start‐up packages• Pilot programs

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Where the money comes from and what it pays for2012‐13 Operating Budget ‐ $2.6 Billion 

51%

23%Undesignated General Funds

Money comes from:• State appropriations• Tuition• Investment income• Service assessments

Pays for:• Instruction• Public service• Administrative support• Scholarships

Designated GeneralFunds

Money comes from:• UK HealthCare• County 

appropriations• Mandatory fees• Course and 

program fees 

Pays for:• Public service• Instruction• Student Services• Academic Support 12

FY 2012‐13 and FY 2013‐14 Operating BudgetsChange in Undesignated Recurring General Funds (In Thousands)

Revenues: FY 2012‐13 FY 2013‐14 Planning purpose only

Adjustment % Chg. Adjustment % Chg.State Appropriations ($19,518) ‐6.4% $0 0.0%Tuition 23,688 8.3% 23,537 7.6%Other (1,391) ‐5.5% 357 1.6%

Total change in Revenues $2,777 0.5% $23,895 3.9%Expenses:PersonnelFaculty Investments $1,108 $1,138Merit Salary Increase  (5%) 0 21,203Benefits (2,928) 1,162

OperatingStudent Financial Aid 10,328 9,270Strategic Initiatives 5,843 3,407Utilities / M&O 1,041 1,487Capital Renewal Pool 1,000 1,000Capital debt service pool 5,000 7,000Other 618 1,500

Total Change in Expenses $22,012 $47,169Funding Gap ($19,174) ($23,274)Reallocations: 

Academic Units ‐3.3% ‐4.2%Administrative Units ‐5.0% ‐6.4%

Undesignated General Funds

Pct. Chg.

FY12 Base $611,793

Change $2,777 0.5%

FY13 Base $614,570

Change $23,895 3.9%

FY14 $638,465

23%

Undesignated General Funds ‐ 23%

Money comes from:• State appropriations• Tuition• Investment income• Service assessments

Pays for:• Instruction• Public service• Administrative 

support• Scholarships

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2012‐13 Operating BudgetNew or enhanced investments in support of Strategic Plan goals

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Area Investment(in thousands) Goal 1: 

StudentsGoal 2: Research

Goal 3: Faculty, Staff and Facilities

Goal 4: Diversity

Goal 5: Service

Faculty investments (promotions & fighting fund) $1,108  Benefits* ($2,928)  Student Scholarship Investments $10,328  Academic Readiness $530  Development staffing initiative $675  Emergency preparedness/planning $120  Enrollment Management investments $1,814  Information technology investments $750  Quality Enhancement Program / SACS $285 

TIIF and Summer $2,150  Facility M&O $1,041  Capital renewal $1,000  Capital debt service pool $5,000  Other $139  Total Net Investments $22,012 *Benefits credit is a result of net of a savings created from an updated rate calculation.  Employee benefit package was not reduced.

University of KentuckyCurrent Funds Revenue Budget (in thousands)

2011‐12 2012‐13 Change Pct. Chg.

Recurring:Undesignated General Funds $611,793 $614,571 $2,777 0.5%Designated General Funds $1,330,367 $1,298,202 ($32,165)* ‐2.4%Auxiliary Funds $162,137 $170,077 $7,939 4.9%Restricted Funds $343,112 $342,820 ($292) ‐0.1%

Non‐recurring:Fund Balances $251,346 $192,706 ($58,639)* ‐23.3%

Total $2,698,757 $2,618,377 ($80,379) ‐3.0%

*The decline in the UK consolidated budget from FY 2011‐12 to FY 2012‐13 is primarily the result of a reduction in projected fund balances and a change in GASB accounting practices regarding the reporting of bad debt expense, both of which are related to UK HealthCare. FY 2011‐12 included an exceptionally high level of fund balances due to the timing of the receipt of patient care reimbursements from prior years during May and June 2011.  As a result of the accounting change, patient care revenues are reflected net of bad debt expense effective with FY 2012‐13. In prior years, patient care revenues were reported gross and bad debt was reported as an operating expense. This change in the accounting practice created a $139 million variance in revenues and expenses. If the accounting practice had not changed, the FY 2012‐13 consolidated budget would have increased by $59 million over the FY 2011‐12 budget instead of decreasing by $80 million.

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2012‐13 Consolidated Budget

12.8%

10.6%

12.1%

0.9%4.1%

1.5%

5.7%

2.8%4.7%0.7%

6.9%

37.2%

InstructionResearchPublic ServiceLibrariesAcademic SupportStudent ServicesInstitutional SupportOperations & MaintenanceStudent Financial AidDebt ServiceAuxiliary ServicesHospital

4.3%

34.0%

5.5%0.9%

37.8%

6.0%

11.5%

PresidentProvost & CollegesEVPFAResearchUK HealthCareUniversity WideAffiliated Corporations

47.9%

41.9%

4.8%

2.4% 3.0%

Personnel Services

Operating Expenses

Student Financial Aid

Capital Outlay

Mandatory Transfers

Major Function                             Organization                             Natural Object

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2012‐13 Operating and Capital Budget Book and Other Budget Information

http://www.uky.edu/OPBPA/

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