Pennsylvania State System of Higher EducationFiscal Year 2013/14 Budget Information Request Instructions

Table of Contents

Section/Excel File Sheet Name Title/Description

DetailedInformation

PageIntroduction 2Overview 2

Enrollment Enrollment 3FY2013/14 Revenue Expectations FY2013/14 Revenue Expectations 3FY2013/14 Expenditure Requirements

FY2013/14 Expenditure Requirements 4

Start Basic File Data 4Assumptions Budget Assumptions 5Utilities Future Year Utility Cost Projections 6Data Miscellaneous Data 6Student Profile Student Profile 6Work force Annual Work Force Requirements 7Vacancies Data related to vacancies 8Step Increase Calculate value of one step increase 8E&G Educational & General Fund 8Aux Auxiliary Fund 11Re Restricted Fund 12ALL All Funds 12Function Board of Governors’ Functional Budget

Summary 12BOG Summary Board of Governors’ Budget Request Summary 12BOG Narrative Explanation of Changes in E&G Budget 12Strategy Budget Strategy 13PDE Supplement Tuition Discounting Practices 13Summary Summary of Budget Request 13Edit Checks Edit Checks for BUDRPT 13Appendix A Projected High School Graduation

Demographics 14Appendix B 2011/12 Academic Program Actions 15

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Appendix C Instructional Faculty FTE Calculations 19Pennsylvania State System of Higher Education

2013/14 Budget Information Request Instructions

IntroductionThis manual contains instructions to assist Pennsylvania State System of Higher Education (PASSHE) administrators in preparing the Budget Report, or BUDRPT. The BUDRPT is a series of spreadsheets contained in a Microsoft Excel electronic file. The Universities must enter information specific to their institution. This information is primarily financial; however, enrollment, work force, and other data are requested as well. This information is then assembled by the Office of the Chancellor into a budget request for the entire System, which is presented to PASSHE’s Board of Governors (BOG) and, with its approval, to the Governor’s Budget Office, Department of Education, and the Commonwealth General Assembly.

This year’s BUDRPT submission is due, via electronic transmission, to the Office of the Chancellor by Tuesday, September 4, 2012. It should be emailed to Ginger S. Coleman, Manager of Budget Planning and Analysis, at gcoleman@passhe.edu. When transmitting your file, please name it with the first two letters of your institution, according to the chart in the Start sheet of the BUDRPT.

Although there are changes in the BUDRPT this year, the basic structure remains similar to what has been used in previous years. The file has a separate sheet for each fund: Educational & General (E&G), Auxiliary (Aux), and Restricted (Re). Each sheet has cells for entering revenue and expenditure information. The sheet labeled ALL pulls information from the three funds and provides a picture of the institution’s overall budget.

The same color-coding conventions have been used: green cells are for entering information, and blue cells indicate formulas that pull information from another sheet within the workbook. When entering data, please use whole dollars; do not enter cents. If you are using a formula to calculate the new revenue or expenditure figure, please use the “@round” function at the beginning of your formula to remove the cents.

This year’s BUDRPT requests information for three fiscal years. The Prior Year is the fiscal year just ended June 30, 2012 (FY2011/12). The Current Year is the fiscal year ending June 30, 2013 (FY 2012/13). The Request Year is the fiscal year ending June 30, 2014 (FY2013/14).

Overview As we begin the fiscal year 2013/14 budget process, it is clear that Pennsylvania’s economy continues to be challenged by the current national economic environment. Fiscal year 2011/12 presented unprecedented times when the Commonwealth reduced the general fund budget by four percent, partially through an eighteen percent reduction in PASSHE’s appropriations. The final Commonwealth fiscal year 2012/13 budget includes level funding for PASSHE’s appropriations. The continued focus on reducing the size and cost of government at all levels will be present in Pennsylvania for at least the next few years. Although state revenues have

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exceeded projections in recent months, there remains concern regarding state revenue growth and the Commonwealth’s funding of PASSHE in 2013/14 and beyond. As the Commonwealth will continue to implement budget-cutting strategies, PASSHE needs to do so as well.

While state appropriations are a diminishing portion of PASSHE’s revenue, most PASSHE universities are experiencing enrollment declines with a corresponding adverse impact on tuition and fee revenues. At the same time, much of PASSHE’s compensation expenditure requirements for 2012/13 and 2013/14 remain unknown due to ongoing negotiations with the Association of Pennsylvania State College and University Faculties (APSCUF), for faculty and coaches, and the State College and University Professional Association (SCUPA). In the midst of these uncertain fiscal circumstances, PASSHE’s emphasis must continue to be on addressing the structural gap between revenues and expenses through strategic changes to its business models to ensure financial sustainability.

Therefore, the following assumptions are to be used when creating the fiscal year 2013/14 budget request. These changes are highlighted below and are discussed in further detail in the explanations for each tab in the BUDRPT template.

EnrollmentThe flexibility provided for tuition pricing in recent changes to Board of Governors’ Policy 1999-02-A, Tuition, may allow new opportunities for identifying and attracting new student markets. When projecting enrollment for 2013/14, consideration must be given to potential changes in enrollment management efforts and the cost/benefit of growth in certain market segments.

2011/12 was the first year PASSHE saw a decline in enrollment in over 16 years; combining that with sluggish enrollment commitments for fall 2012 may indicate stress on some Universities’ demand. PASSHE universities continue to be highly dependent upon the traditional college student, which is a shrinking customer base in Pennsylvania. Appendix A provides information on the changing demographics of high school graduates in Pennsylvania and the correlation with PASSHE’s enrollment. University-specific demographic trends are also provided on the budget SharePoint site. As these trends differ across the state, the impact will vary by university, based on location, geographic diversity of enrollment, and the extent to which the university has entered into secondary enrollment markets and/or revitalized academic programs. Universities must be realistic about enrollment projections. If enrollment is projected to decrease in 2012/13, 2013/14 enrollment projections should show no growth, or a corresponding decrease in enrollment, unless growth is in targeted new market areas.

Fiscal Year 2013/14 Revenue Expectations

State Appropriations: Given Pennsylvania’s current fiscal landscape, PASSHE must be prepared for another reduction in state appropriations. This year’s BUDRPT is to be completed with an assumption of no change in state appropriations, but universities also

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should be preparing internal planning scenarios with reductions in 2013/14 appropriations.Tuition: At this time, no tuition rate increases are to be considered in the budget request. However, tuition and fee revenue adjustments should be made based on changes in enrollment.Other Revenue Sources: As Universities are becoming less dependent on state and federal funding, it is anticipated that other revenue sources will grow. Use of Carryforward: To the extent funds from previous years have been reserved for specific one-time purposes in the current and/or request years, they should be included as a revenue source, with a corresponding adjustment to expenditure requirements. If Carryforward funds are needed to meet ongoing costs, this can only be done as a transitional step toward implementing lasting changes to the University’s cost structure. In addition, any university with unrestricted net assets in excess of 10% of their operating budget should reflect a planned Use of Carryforward in both the current and request years. An explanation should be provided in the BOG Narrative for the intent of all activities funded with this source. It is anticipated the explanation would be consistent with the University Financial Health report submitted by the president December 2011.

Fiscal Year 2013/14 Expenditure RequirementsOnly essential cost increases are to be incorporated in 2013/14 expenditure estimates; assumptions for these cost increases are provided in other sections of the BUDRPT instructions.

Salary and Wage Rates: 2012/13 and 2013/14 compensation are to reflect known pay adjustments as well as an increase for Nonrepresented employees. To date, this includes AFSCME, SPFPA, PDA, PSSU and OPEIU employee groups. If any of the remaining bargaining units—APSCUF for both faculty and coaches, and SCUPA--ratify agreements prior to submission of the BUDPRT, guidance will be provided for Universities to include associated compensation increases in their submission. A separate section of the BUDRPT requires additional data to assist the Office of the Chancellor in adjusting compensation for faculty, coaches and/or SCUPA employees, in the event that agreements are reached prior to PASSHE’s budget submission.Positions: Universities must address staffing needs within existing funds. It is expected that some vacant positions will be filled; however, there should be no increase in Educational and General funding requirements due to new positions. Additional information is required for vacancy information in the Vacancies and Eliminated Positions spreadsheet.

Multiyear Budgeting

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As always, the BUDRPT requires data for the prior year (FY 2011/12), the current year (FY 2012/13), and the request year (FY 2013/14). Both the prior and current years must be balanced; it is expected the request year will be submitted unbalanced so that PASSHE’s revenue requirements can be determined. This year, there is no requirement to submit budget projections beyond fiscal year 2013/14, since so much is unknown about both the expenditure requirements and revenue expectations. However, it is important for Universities to be prepared for multiple years of difficult budgets and to model various scenarios into the future. Salary and benefit assumptions for 2014/15 are provided in the “Assumptions” tab for planning purposes only.

These instructions provide the guidelines for ensuring the consistent development of minimum budget requirements for fiscal year 2013/14. More detailed information about changes to individual sheets can be found below under the headings that correspond to each sheet’s name.

StartThis page contains general information regarding the BUDRPT file, including the fiscal years covered and the due date. There is also a chart that lists the two-letter code for each University and the name you should give your file when it is returned to the Office of the Chancellor. The only fields requiring input on this page are the placement of your University’s two-letter code, in capital letters, in the green cell and your contact information. This will automatically fill in the University’s name at the top of each sheet.

AssumptionsThe types of information provided on this sheet remain largely unchanged from previous years. As usual, rates on this sheet for the request year remain subject to change after the BUDRPTs are submitted and throughout the year. You will be notified as these changes occur.

Salary increases represent the fiscal impact of contract agreements and Board actions. These estimates take into consideration the impact of midyear increases in each fiscal year. Throughout the BUDRPT, the work force is divided into categories based on the type of employee. Faculty refers to those represented by the Association of Pennsylvania State College and University Faculties (APSCUF), except coaches who fall within Other. AFSCME refers to those represented by the American Federation of State, County and Municipal Employees. Nonrepresented includes all managers, executive-level employees and any other nonstudent employee not covered by a collective bargaining agreement. SCUPA refers to employees in the State College and University Professional Association. The final category, Other, encompasses, as the name implies, employees not in one of the unions or categories mentioned earlier. This includes, but is not limited to, coaches, nurses, student employees, security, and police personnel.

The Social Security data represents the latest information available from the Social Security Administration.

Retirement rates are finalized for the prior and current years. SERS and PSERS rates for fiscal year 2013/14 are based upon language in Act 120-2010 that was signed

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into law in November 2010. The TIAA-CREF/alternative retirement program rate is set by statute and is not likely to change.

The Hospitalization Insurance section lists AFSCME and SCUPA first. This plan is administered by the Pennsylvania Employees Benefit Trust Fund, to which PASSHE makes per-eligible employee payments. The rates are set in the collective bargaining agreements. In addition to AFSCME and SCUPA employees, this plan also covers the physicians’ union (PDA), and the social services union (PSSU). Faculty and Nonrepresented are listed next. These rates are determined by PASSHE’s benefits office, with the assistance of the healthcare provider, and are affected by the faculty collective bargaining agreement. Rates for fiscal year 2012/13 are final; however, if new collective bargaining agreements are reached and dictate a change in the design of the healthcare plan, rates are subject to change. Rates for fiscal year 2013/14 are unknown at this time; however, estimates have been provided to aid in completion of the 2013/14 budget request and are subject to change before presentation to the Board of Governors. Employee contribution rates are based on tiers (single, two-person, family) and participation/nonparticipation in a wellness program. The employer contribution rates are not differentiated in the same manner; they are blended composite rates calculated by taking all of above variations into account.

Annuitant hospitalization rates for the prior and current years are final. The rates for the request year are subject to change.

It is important to note that there are 26 pays periods in 2012/13 as compared to 27 pay periods in 2011/12. Therefore, the biweekly rate change for hospitalization, annuitant and supplemental healthcare is larger than the annual cost impact.

Two inflation factors are listed. The consumer price index for the prior year comes from the Federal Bureau of Labor Statistics. Estimates for the current and budget years come from the Congressional Budget Office. Utility rate increases are estimated based upon the mix of utilities used within PASSHE’s E&G facilities and correlating anticipated rate increases. University experience may vary significantly.

Salary and benefit assumptions for 2014/15 are provided in the “Assumptions” tab for planning purposes only. There are no salary assumptions for faculty, coaches, and SCUPA employees, as contract requirements are unknown at this time. Healthcare projections are based upon the current healthcare structure.

UtilitiesAdditional information for projecting utility costs is provided. Individual University utility costs will vary, depending on mix of utilities, local utility providers, and usage. This spreadsheet provides cost projections for each energy source (electricity, gas, coal, and oil). This information serves as a guide; your facilities directors may have better information. This spreadsheet only addresses predictions in Northeast energy commodity rate changes; university utility contracts may result in a delayed impact of rate changes. In addition, changes in energy usage, due to weather, conservation efforts, and changes in square footage also may have a significant impact on each University’s utility costs.

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DataThis sheet contains University-specific information for use in preparing the BUDRPT. Of particular note are the columns for state appropriation. Both here and on the E&G spreadsheet, the state appropriation is divided into several categories of funding related to the E&G appropriation. The first is the portion of the base allocation produced through the allocation formula and transferred to the Universities on a monthly basis. The second is the portion of the base allocation dedicated to the Academic Facilities Renovation Program (AFRP). The next data component provides performance funding. Actual performance funding amounts are listed for fiscal year 2011/12. Performance funding for fiscal years 2012/13 and 2013/14 are prorated based upon the actual awards of E&G performance funding for fiscal year 2011/12. This distribution is for budget purposes only, and is meant to minimize fluctuations in the appropriation estimate due to changes in performance funding. The 2012/13 distribution will be provided when it becomes available; BUDRPTs will be adjusted accordingly. The final category is for the E&G allocation for other purposes, such as the McKeever Environmental Learning Center. Additional explanations for this data can be found in notes on the sheet.

Attached as Appendix B is information on new academic programs (or revisions to existing programs) that have been approved by the Board of Governors and any programs that have been terminated or placed in moratorium. Revenue, expenditure, enrollment, and compliment requirements associated with the implementation of these program changes should be addressed in your budget development.

Student ProfileThe Student Profile sheet collects enrollment information by headcount and annualized full-time-equivalent (FTE) students. Prior year fall headcount totals by graduate and undergraduate should match headcount figures provided in the Data spreadsheet. Annualized FTE totals by graduate and undergraduate for all three years must match those provided concurrently to the System Research Office by your University’s Institutional Research Office for the Program Budget. Some Universities may be at or near student capacity. Enrollment estimates should be based upon University leadership’s planning goals and market demand. Annualized FTE is calculated as follows: 30 undergraduate credit hours = 1 FTE; 24 graduate credit hours = 1 FTE. All credit hours taken (summer 2, fall, winter, spring, summer 1) should be used in annualized FTE calculations. Nonresident enrollment must be reported based on whether or not the students were part of a tuition plan target market. Beginning in 2011/12, a change was made to the way nonresident undergraduate tuition is charged. Previously, universities were required to charge undergraduate nonresidents a tuition rate set at 250% of the in-state rate, unless they had an approved plan to charge an alternative rate (between 150% and 250% of the in-state rate) to a certain nonresident population. Now, a minimum out-of-state tuition rate of 150% of the in-state rate has been established and plans are approved to charge any rate above this. If your University charges an alternative rate (greater than the minimum rate) to any or all nonresidents, they should be reflected as Alternate Rate students. In addition, any nonresident distance education students charged tuition rates established by your president should be reflected as Alternate Rate students. Please note, unless your University has an

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approved alternative rate, the tuition rate for international students is 250% of the resident undergraduate tuition rate.

2011/12 was the first year PASSHE saw a decline in enrollment in over 16 years; combining that with sluggish enrollment commitments for fall 2012 may indicate stress on some Universities’ demand. PASSHE universities continue to be highly dependent upon the traditional college student, which is a diminishing commodity in Pennsylvania. Appendix A provides information on the changing demographics of high school graduates in Pennsylvania and the correlation with PASSHE’s enrollment. University-specific demographic trends are also provided on the budget SharePoint site. As these trends differ across the state, the impact will vary by university, based on location, geographic diversity of enrollment, and the extent to which the university has entered into secondary enrollment markets and/or revitalized academic programs. Universities must be realistic about enrollment projections. If enrollment is projected to decrease in 2012/13, 2013/14 enrollment projections should show no growth, or a decrease in enrollment, unless growth is in targeted new market areas.

Work forceThe University’s work force is counted in annualized full-time-equivalent (FTE) employees. Annualized Employee FTE should include all positions for which funds are budgeted. In general, your FTE should be adjusted downward for planned vacancies. If, for instance, you are holding a position vacant for a year, your FTE count should not include that position; if you are holding a position vacant for six months, that position should be reflected as .50 FTE. With the exception of faculty, 1.00 FTE should reflect 37.5 or 40 hours of work (or normal workweek) for 52 weeks. If an employee works half-time year-round, he/she should be reflected as .50 FTE. If an employee (including coaches) works full-time for three months, he/she should be reflected as .25 FTE. Employee FTE figures should include only salaried employees, not wage employees. This may differ from payroll FTE definitions, which are computed based upon the percentage of a normal workweek in a given pay period. Faculty FTE should be calculated based on the number of contract hours, where 24 contract hours in a fiscal year equals 1.0 FTE. In addition, faculty on full sabbatical should be reflected as 1.0 FTE, rather than 0.5, as reflected on payroll. Although faculty workload may exceed 1.0, faculty FTE for budgeting purposes should not exceed 1.0 FTE for any particular employee.

The template includes a detailed request for workload information. For each employee group, annualized FTE is requested for (1) positions permanently filled, and (2) permanent positions that are currently filled on a temporary or interim basis. For faculty, there is also a third category for temporary or adjunct faculty that may not be associated with a permanent position.

Do not adjust FTE downward for normal turnover in positions; however, cost projections should incorporate salary savings anticipated due to normal turnover. A new line has been added to the “E&G” tab (row 186) to record the projected compensation savings from turnover in the current and request years. This should be entered as a negative number.

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Instructional faculty FTE positions should be estimated for the current, request, and future years. In previous years, this was based upon the Common Cost figures for the actual year. PASSHE is currently transitioning away from Common Cost Accounting to the National Study of Instructional Costs and Productivity. The definition of instructional faculty is different in these two methodologies. Instructional faculty should now be defined similar to the National Study of Instructional Costs and Productivity, which includes all faculty whose primary purpose is instruction. The FTE count for those faculty is based upon the human resources definition (e.g., a full-time faculty member is hired as 1.0 FTE). Instructional faculty will no longer exclude portions of faculty time for non-instructional activities. See Appendix C for an excerpt from the National Study of Instructional Costs and Productivity instructions, which give a more detailed explanation on how to count instructional faculty.

In the Current Year Retirement Program Participation: E&G Only section, provide the institution’s unrestricted headcount and total employer contribution dollars for each retirement program by bargaining unit. The Current Year Health Care Program Participation: E&G Only section requests unrestricted headcount for each healthcare program by full-time and part-time employees by bargaining unit.

Vacancies and Eliminated PositionsAs PASSHE continues to face financial challenges and Universities work within constrained budgets, many Universities are holding positions vacant, or eliminating vacant and/or filled positions. Frequently questions arise concerning changes in PASSHE’s complement. The purpose of this spreadsheet is to provide consistent information that can be reported externally on the number of positions that are vacant, frozen, or eliminated for 2011/12, 2012/13, and 2013/14.

For the purposes of this report, vacancies are unfilled authorized positions, based upon the agreed upon definition for Position Budget Management as follows.

Authorized Position: A position which has been approved by executive staff for inclusion in the budget; the position may or may not have a direct funding source in the current budget year. 

Please include in this spreadsheet information concerning all vacant positions that were/will be at least partially funded in the University budget during the prior, current or request year. Also include all authorized positions that were/will be eliminated in the prior, current, or request year, even if they are not currently vacant. Also, please indicate if the position was filled when eliminated.

Step Increase Contract increases for AFSCME, SPFPA, PDA, PSSU, and OPEIU are the only known increases for fiscal years 2012/13 and 2013/14 at this time. As the fiscal year 2013/14 budget request is being built, other union contracts may be ratified and appropriate pay adjustments will need to be made. To aid in the building of the request, it will be helpful to know the value of one step increase, by fund, for each bargaining unit at your University, for which there is no ratified union contract. Please report the value of one step increase, the value of cash payments equivalent to one step for those at the top of the payscale, and the associated benefits (social

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security and retirement), if one step increase was given on July 1, 2013. Note: These numbers are to be excluded from salary estimates provided on the E&G, Auxiliary and Restricted tabs of the BUDRPT. This information may be used as the System-wide budget strategy is developed.

E&GBelow are specific instructions for certain data components in this spreadsheet.

Tuition and Fee Revenue: Changes in student revenues due to anticipated enrollment and/or anticipated changes in institutional fees should be reflected.

As in previous years, tuition should be reported based on whether it comes from the regular academic year or intersession (summer and winter) terms. It should also be categorized based on the type of student: undergraduate versus graduate, resident versus nonresident, and nonresidents paying the minimum nonresident price versus those paying an alternative rate. This includes any nonresident distance education student who is being charged tuition rates established by your president. Please note that BOG Policy 1999-02-A, Tuition, was revised in January 2011, providing Universities more flexibility in tuition rates for summer/winter sessions, graduate tuition and nonresident undergraduates. If your University is utilizing these new pricing policies, be sure to incorporate the impact on revenue in your estimates. No changes in the technology tuition fee rates should be assumed for the request year. Any changes in the technology tuition fee revenue collected should be based solely on anticipated changes in enrollment. The current and request year revenue estimates for fees set by your University’s Council of Trustees should incorporate changes for both enrollment and projected rate changes.

State Appropriations: The state appropriations minor object (412) has been divided into four categories. E&G Base Appropriations are those E&G funds that Universities receive each month as a result of the allocation formula (excluding AFRP), and constitute the bulk of the state appropriations. AFRP refers to the portion of the base allocation that is set aside for debt service in support of the Academic Facilities Renovation Program. Since all AFRP projects have been fully funded at this point, the current funding level for AFRP is expected to remain unchanged for several years. The remaining categories are Performance Funding and Other E&G. The numbers in these cells for all fiscal years should correspond to those in the Data spreadsheet. For fiscal year 2011/12, all numbers are actual. For fiscal year 2012/13, the Base Appropriations, AFRP, and Other E&G data represent what has been allocated by the Board of Governors. Performance Funding for fiscal years 2012/13 and 2013/14 assume each University will receive performance funding proportionate to their fiscal year 2011/12 performance funding award. This may or may not be the case. However, use this estimate for performance funding in lieu of a final award at this time. If fiscal year 2012/13 Performance Funding awards are available prior to the October Board meeting, these amounts will be adjusted. Finally, total state appropriations

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for fiscal year 2013/14 should be held equivalent to 2012/13 total E&G appropriations.

Other Revenue: Please make your best effort to estimate changes in other sources of revenue (e.g., gifts, grants, interest income) in the current, and request years.

Minor object 411, Scholarship Discounts & Allow. (cell D41), should be entered in the revenue section of the sheet just as it is in the FINRPT, as a negative number. The formulas calculating total revenue will not include this negative number. Instead, it links as a positive number to the same category under Services & Supplies Expenditures (cell D211). The current, and request year estimates should be entered as positive expenditures. The revenue category is not used for these years. This allows entries for the actual year to match the FINRPT, while the negative revenue is treated as an expense for all years, making the report easier to analyze from a budget standpoint. As a result, prior year revenues and expenditures in the BUDRPT will exceed those in the FINRPT by an amount equal to minor object 411 expressed as a positive number. BOG Policy 1996-01-A, Sources of Funds for University Scholarships, allows for institutional need-based financial aid programs. Some Universities have been increasing the size of these programs. Minor object 411 should include anticipated awards from these programs.

Corporate Sponsorships (minor object 475) should include revenue associated with System-wide Corporate Sponsorships: Pepsi and OfficeMax. The Office Max contract ended June 30, 2012, so 2012/13 and 2013/14 revenue should be estimated in the same fashion solely based on the Pepsi sponsorship. Funding received from the Pepsi contract in 2012/13 should be estimated as the same amount received by each University in 2011/12, unless you have a better estimate for your University. For more information on these contracts, please see PASSHE’s website at:http://www.passhe.edu/partners/bidops/Pages/default.aspx

Use of Carryforward Funds: To the extent funds from previous years have been reserved for specific one-time purposes in the current and/or request years, they should be included as a revenue source with a corresponding adjustment to expenditures. If Carryforward funds are needed to meet ongoing costs, this can only be done as a transitional step toward implementing lasting changes to the University’s cost structure. In April 2011, the Board of Governors established a new policy: BOG Policy 2011-01, University Financial Health. This policy establishes expectations for Unrestricted Net Assets and Operating Margins. In compliance with this new policy, any university with unrestricted net assets in excess of 10% of the operating budget should reflect efforts to reduce unrestricted net assets through planned Use of Carryforward. An explanation should be provided for the intent of all activities funded with this source in the BOG Narrative page.

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It is anticipated the explanation would be consistent with the University Financial Health report submitted by the president December 2011.

Compensation Expenditures: Personnel expenditure data are requested by bargaining unit for each fund in its respective sheet. A projection of the impact of anticipated turnover of the work force at your University should be factored into the compensation costs by entering the projected savings as a negative number on row 186 of the “E&G” tab.

The following should be taken into consideration when calculating salary projections for 2012/13 and 2013/14.

Salary Rates: Compensation for 2012/13 and 2013/14 should reflect only known pay adjustments as well as an increase for Nonrepresented employees. To date, this includes AFSCME, SPFPA, PDA, PSSU, and OPEIU employee groups. If remaining bargaining units ratify agreements prior to submission of the BUDRPT, universities are to include associated compensation increases in their submission. If this is to occur, additional guidance will be provided. A separate section of the BUDRPT requires additional data on the potential impact of increment pay increases for informational purposes only.

Benefit Liabilities: Annuitant health care should not include the unfunded postretirement liability, but only the pay-as-you-go portion. In the same fashion, the unfunded portion of your compensated absence liability should not be reflected, but only the pay-as-you-go portion. The unfunded portions of these liabilities are reported separately in the FINRPT. Your actual year budget figures should tie to the FINRPT.

Health Care: Rates for the Pennsylvania Employees Benefit Trust Fund are set in the collective bargaining agreements. Rates for the System’s health care plan are determined by PASSHE’s benefits office, with the assistance of the health care provider, and are affected by the faculty collective bargaining agreement. Rates for fiscal year 2012/13 are final; however, if new collective bargaining agreements are reached and dictate a change in the design of the healthcare plan, rates are subject to change. Fiscal year 2013/14 rates for PASSHE’s health care plans are unknown at this time; however, estimates have been provided in the benefits assumptions sheet to aid in completion of the 2013/14 budget report and are subject to change before presentation to the Board of Governors.

Noncompensation Expenditures and Transfers: Please note that only summary data is required for Services & Supplies, and Capital Expenditures. Travel expenditures are reflected as a separate category, rather than including them in Other Services and Supplies. Cost estimates should include anticipated savings from strategic sourcing.

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For 2013/14, in general, there should be minimal increases in Services & Supplies and Capital Expenditures due to continued savings from the strategic sourcing initiatives and low inflation. Utilities increases should reflect estimates of anticipated rate (see Utilities spreadsheet) and usage changes. Even though System-wide utility costs are anticipated to increase 2.0% in fiscal year 2013/14, it is understood that some institutions may vary due to energy sources, utility providers, lengths of existing contracts, energy savings activities, and changes in space. If your University is involved in a guaranteed energy savings agreement, both the energy savings and contract costs should be reflected in the budget.

BOG Policy 1996-01-A, Sources of Funds for University Scholarships, allows for institutional need-based financial aid programs. Some Universities have been increasing the size of these programs. Minor object 411 should include anticipated awards from these programs.

Mandatory transfers should consist solely of requirements from external sources, such as debt service. Debt service for the Academic Facilities Renovation Program should be reflected in each University’s E&G budget as a mandatory transfer. The proper amounts are in the Data spreadsheet.

Nonmandatory transfers and/or capital expenditures should include the anticipated amount transferred to the plant fund throughout the year. For those universities who tend to rely on budget savings from vacancies to fund plant activity, be sure to reduce personnel costs by a reasonable turnover expectancy using row 186 of the “E&G” tab and budget those savings as a transfer to plant or a capital expenditure. Combined capital expenditures and transfers for 2013/14 should be similar to 2012/13, unless explained in the BOG Narrative page.

The prior year (FY2011/12) entries must match the FINRPT minor object detail. Before submission of the BUDRPT, please review the fiscal year 2011/12 data with the University’s most recent FINRPT to ensure consistency. Provide the best estimates available for the current year (FY2012/13) and the request year (FY2013/14) as to what the FINRPT will reflect, within the given assumptions. Only the request year is permitted to show a deficit.

AuxThis sheet lists all revenues and expenses from the Auxiliary Fund for the three years covered by this BUDRPT. The current and request year revenue estimates for fees set by the University’s Council of Trustees should incorporate changes for both enrollment and rates. Also, please make your best effort to estimate changes in other sources of revenue (e.g., gifts, grants, interest income) in the current and request years.

All instructions listed in the E&G section, except those dealing with Tuition and State Appropriations, also apply to the Auxiliary section. Since Auxiliary activities are self-supporting, all years should be balanced.

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ReThis sheet lists all revenues and expenses from the Restricted Fund for the years covered by this BUDRPT. In the revenue section, enter the actual year based on the FINRPT and make every effort to estimate increases in other sources of revenue (e.g., gifts, grants, interest income) in the current and request years.

All instructions listed in the E&G section, except those dealing with Tuition and State Appropriations, also apply to the Restricted section. Since Restricted activities are externally funded, all years should be balanced.

ALLThis worksheet sums revenue and expenses from all three funds to provide a picture of the University’s total budget. There is no data entry required on this sheet.

FunctionThis spreadsheet displays E&G expenditures by functional categories, rather than by minor object. Total E&G expenditures and transfers for the prior and current years on this sheet must match the totals from the E&G sheet. Similar information is provided in the FINRPT for the prior year, which may serve as the basis for completing this spreadsheet.

BOG SummaryThis summary sheet is one of the most important in the BUDRPT. At the October Board meeting, when the Board votes on the current year’s budget and approves the budget request for the next fiscal year, Board members are provided with the summary of each University’s budget. No data is entered on this sheet. It draws information from several other sheets in the file. When looking at this sheet, ask, “What picture does this summary paint of the University?” and “What kind of questions does it raise?” If the answers to these questions are unsatisfactory, reexamine the numbers driving this summary.

BOG NarrativeThis sheet provides space for an explanation of the changes taking place in your E&G budget, as reflected in the BOG Summary worksheet. Based on variances between the current and request years, please explain the variances in the ten fiscal line items indicated and the reasons for the forecast changes in student enrollment on this summary. Once all BUDRPTs have been submitted and reviewed, a consolidated report will be run to determine System-wide average increases in these fiscal line items. This report will be sent out in early September to assist in the completion of this narrative page. Explanations should highlight revenue and expenditure patterns unique to your University, which may make your data stand out from others. Work force changes should have already been explained on the Work force and Vacancy sheets; provide summary comments here. This should give an overall assessment of what is happening in the E&G budget. The explanations can be in the form of numbered or bulleted points, or a short narrative. If you prefer, they can be placed in cells or in a separate Word file.

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StrategyCertainly, there is no “one-size-fits-all” approach to meeting the current economic challenges. Throughout this decade, Universities have reduced expenditures through various means of across-the-board reductions, achieving purchasing and energy efficiencies, and postponing investments in equipment and physical plant. There is little, if any, more that can be done to squeeze savings from budgets in this fashion. To poise PASSHE Universities for a sustainable future, Universities must make strategic budget decisions to change the cost structure permanently and create new sustainable revenue sources.

Actions to Balance Budget: Actions taken by the Board of Governors in June to raise the tuition and technology tuition fee were not enough to balance PASSHE’s 2012/13 E&G budget. A gap of approximately $16 million remained. Provide a list of actions taken in fiscal year 2012/13 to balance the E&G budget. Please be specific about how you balanced the year and the effect it has had on your University. For example, what have you not been able to do because of fiscal constraints, reductions in student services, etc.? How many positions at what levels were eliminated (filled or vacant)? If you met your budgetary requirements by reducing your transfers to plant funds or increasing fees, that should be identified as well. If reallocations have been made, the University’s cost savings would have to increase accordingly. If you would like to provide a strategic planning document to supplement this information, please do so.

PDE SupplementThe Pennsylvania Department of Education has requested supplemental budget information concerning tuition discounting practices. Although most of this information is available through student data records, this spreadsheet collects information on University-based undergraduate grants. Please use the definitions in the worksheet to complete this form.

SummaryThis sheet summarizes the University’s entire budget on the first page and lists expenditures as a percent of revenue on the second page. No data input is necessary.

Edit ChecksA series of edit checks help ensure that information is filled in properly and test for reasonableness. Please use these edit checks when reviewing your BUDRPT, and correct anything that gives a message of “please correct.” Provide an explanation for anything that gives a message of “please explain” before submitting it to the System office.

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Appendix AProjected High School Graduation Demographics

Projections for high school graduates from top 5 feeder counties for each university are provided in a subfolder titled “Top 5 Feed Counties” on the following site.

https://secure.passhe.edu/af/budget/Budget%20Documents/Forms/AllItems.aspx

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Appendix B

PENNSYLVANIA STATE SYSTEM OF HIGHER EDUCATIONACADEMIC PROGRAM ACTIONS

June 30, 2011—June 8, 2012As presented to Board of Governors June 27, 2012

NEW PROGRAMSUniversity Program Name Degree Approved

Bloomsburg Technical Leadership B.A.S. 1/19/2012Bloomsburg Middle East Studies Minor 5/29/2012California Jurisprudence B.A. 6/30/2011California Mechatronics Engineering Technology B.S. 4/5/2012Clarion Allied Health Leadership B.S. 1/19/2012Clarion Technology Leadership B.A.S. 4/5/2012Clarion Marketing Minor 5/31/2012Indiana Safety Sciences Ph.D. 10/6/2011Indiana Strategic Studies in Weapons of Mass

DestructionM.S. 6/30/2011

East Stroudsburg Chinese Language and Culture Minor 4/24/2012East Stroudsburg Public Health Graduate

Certificate9/16/11

East Stroudsburg Reading Supervisor Graduate Certificate

9/16/11

Edinboro Business Administration Minor 3/29/2012Kutztown Art History Minor 4/24/2012Millersville Entrepreneurship Minor 4/10/2012Millersville Integrated Scientific Applications M.S. 6/30/2011Shippensburg Science Education M.A.T 1/19/2012Shippensburg Software Engineering B.S. 4/5/2012

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PROGRAMS PLACED IN MORATORIUMUniversity Program Name Degree

Bloomsburg Special Education PDE Certification ProgramCalifornia Special Education PDE Certification ProgramCalifornia Secondary French Education PDE Certification ProgramCalifornia French M.A.TClarion Education/Library Science B.S.L.SEdinboro Social Science B.A.Edinboro Spanish B.A.Edinboro Spanish B.S.Ed.Edinboro German B.S.Ed.Edinboro Industrial and Trade Leadership B.S.Edinboro Public Accounting CertificateEdinboro Information Technology M.S.Edinboro Theatre Arts * B.A.Indiana Applied Physics B.S.Indiana Business Technology Support B.S.Indiana Mathematics M.Ed.Indiana Chemistry M.A.Kutztown Electronic Media M.S.Kutztown Sociology with Paralegal Studies B.AKutztown Human Resource Management B.A.Kutztown School Nurse Education PDE Certification ProgramKutztown Industrial Organizational Psychology MinorLock Haven Special Education B.S.West Chester Leadership for Women * M.S.A.West Chester Leadership for Women * CertificateWest Chester Latin * B.A.West Chester Biochemistry * B.S.West Chester Comparative Literature * MinorWest Chester School Nurse Education * PDE Certification Program

Placing a program in Moratorium means that students will no longer be admitted during the period of moratorium. Students currently enrolled or admitted will be allowed to complete the program. The university will assess the program’s potential and either redesign or suspend the program. Normally the period of moratorium lasts no more than five years.

*These programs were placed into moratorium prior to June 30, 2011; however, they were omitted in the 2010-11 Summary of Program Actions.

DISCONTINUED PROGRAMS

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University Program Name DegreeCalifornia Early Childhood Education M.Ed.California Public School Nursing PDE Certification ProgramIndiana German B.A.Indiana Secondary German Education B.S.Ed.

Discontinued programs should have no students currently enrolled and will be removed from the program inventory.

REORGANIZED PROGRAMSUniversity Program Name Degree Change

Bloomsburg Languages and Cultures

B.A. The B.A. programs in French, German, and Spanish were reorganized as concentrations under this new B.A.

California Technology Management

B.S. Reorganized from the B.S., Industrial Technology

Cheyney Fine Arts B.A. The B.A. programs in Art, Music, and Theater Arts were reorganized as concentrations under this new B.A.

East Stroudsburg Public Heath B.S. Reorganized from the B.S. in Health Services Administration program.

East Stroudsburg Criminal Justice B.S. Reorganized from the B.A. in Sociology

East Stroudsburg Social Work B.S. Reorganized from the B.A. in Sociology

Edinboro School Psychology Ed.S. Reorganized from the M.S. in School Psychology

Edinboro Psychology B.S. Reorganized from the B.A., Psychology program

Indiana Clinical Mental Health Counseling

M.A. Renamed from Community Counseling and revised to meet licensure and accreditation standards

Indiana Counseling M.Ed. Revised to allow candidates to receive K-12 certification

Indiana Safety, Health and Environmental Applied Science

B.S. Renamed from Safety Science and revised to meet accreditation standards by ASAC

Lock Haven B.A. Foreign Language

B.A. The B.A. programs in French and Spanish were reorganized as concentrations under this new B.A.

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Lock Haven Disability and Community Services

B.S. Reorganized from the B.S., Special Education program.

Lock Haven Interdisciplinary Studies

B.S. Reorganized from the B.S. General Studies program

West Chester Clinical Mental Health

Letter of Completion

The award was changed from a post-master certificate to the post-master letter of completion

West Chester Professional Counselor Licensure Preparation

Letter of Completion

The award was changed from a post-master certificate to the post-master letter of completion

West Chester Latin American and Latino Studies

Minor Renamed from Latin American Studies

West Chester Environmental Health

B.S. Renamed from Public Heath/Environmental Health

West Chester Health Care Management

Graduate Certificate

Renamed from Heath Care Administration

West Chester Geographic Information Systems

Graduate Certificate

Reorganized from the Geographic Technology graduate certificate

Reorganized programs reflect curricula and/or credentials that have been significantly revised to meet new market demands.

REINSTATED PROGRAMSUniversity Program Name Degree

East Stroudsburg General Sciences M.S.

The M.S. in General Sciences was reinstated from moratorium. The program was reorganized and a new Professional Science Masters track was added. The new track is titled ‘Application of Geographic Information Systems (GIS)/Remote Sensing (RI) to Environmental Science.’

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Appendix CNational Study of Instructional Costs and Productivity

Accounting for Instructional Faculty FTEIn general, the following rules apply to Instructional Faculty FTE:

1. Only alternative workload assignments which are paid directly via payroll from a noninstructional cost center are excluded.

2. Department chair load is included.3. Sabbaticals are included.4. Temporary/Adjunct faculty workload is included, as is instructional overload

for regular faculty.5. For IUP, Teaching Assistants may be included.6. Summer/winter session workload is excluded.

PART A: INSTRUCTIONAL WORKLOAD - Fall 2009 SEMESTER

NOTE: The following discussion of faculty should be read within the context of your institution's Fall 2009 census data. Be sure each CIP reported contains the faculty and their associated workload budgeted within the given department. That is, please use an "origin of instructor" method of reporting.

Regular Faculty: Regular faculty are defined as those individuals who are hired for the purpose of doing teaching, and who may also do research and/or service. They are characterized by a recurring contractual relationship in which the individual and the institution both assume a continuing appointment. These faculty typically fall into two categories:Tenured and Tenure-Eligible:  Those individuals who either hold tenure, or for whom tenure is an expected outcome. At most institutions, these are full, associate, and assistant professors.Non-Tenure Track Faculty:  Those individuals who teach on a recurring contractual basis, but whose academic title renders them ineligible for academic tenure. At most institutions, these titles include instructors, lecturers, visiting faculty, etc.

Supplemental Faculty: Supplemental faculty are characteristically paid to teach out of a pool of temporary funds. Their appointment is non-recurring, although the same individual might receive a temporary appointment in successive terms. The key point is that the funding is, by nature, temporary and there is no expectation of continuing appointment. This category includes adjuncts, administrators or professional personnel at the institution who teach but whose primary job responsibility is non-faculty (e.g. dean, provost who may teach a course), contributed service personnel, etc.

Teaching Assistants:

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Students at the institution who receive a stipend strictly for teaching activity. Includes teaching assistants who are instructors of record, but also includes teaching assistants who function as discussion section leaders, laboratory section leaders, and other types of organized class sections in which instruction takes place but which may not carry credit and for which there is no formal instructor of record. For purposes of this study, do not include graduate research assistants. If a graduate assistant's FTE is split between research and teaching, only report the portion of their FTE that reflects their teaching activity.

In calculating full time equivalency (FTE Faculty) for each of the faculty categories described above, the following conventions are recommended:

REGULAR FACULTY: Take the TOTAL FTE for filled faculty positions as they appear in the Fall 2011 personnel file at your institution, and report this in the "Total FTE Faculty" data fields (Column A on the Data Collection Form). Be sure to report filled positions only. Filled positions are those that have salaries associated with them. Include paid leaves such as sabbaticals wherein the individual is receiving a salary, but exclude unpaid leaves of absence. Remember to include a department Chair as 1.0 FTE if he/she is being paid by the instructional budget. In Column B, report the FTE portion of faculty lines that are supported by external or separately budgeted funds for purposes other than teaching, i.e., research or service. The remainder is the departmental or program instructional faculty FTE, and should be reported in the "Instructional" FTE faculty data field. That is, The FTE for Column C is computed by subtracting Column B from Column A. For example, suppose Professor Jones is a full time member of the Chemistry Faculty. He would be reflected as 1.0 FTE in Column A. Professor Jones has a research grant that contractually obligates him to spend one-third of his time in research. The externally supported portion of his position is 0.33 FTE, which would be reflected in Column B. As a result, 0.66 FTE is the instructional faculty which would appear in Column C, i.e., 1.0 FTE (Column A) minus 0.33 FTE (Column B). If faculty teach overload, their 1.0 FTE and regular load of SCH and OCS should be in the appropriate T/TT or Other Regular line of their home department.  If they taught an overload course which is also paid for by their home department, then the overload FTE (0.25 for one 3 credit course taught) would be counted as Supplemental faculty, and their overload SCH and OCS reported in the Supplemental line of their home department. Note: Part B should include any overload SCH as long as the overload is being funded from the faculty’s home department. If another department is paying for the overload, then the overload FTE, SCH and OCS should be reported as Supplemental faculty in the paying department, along with the overload SCH and expenditures in Part B of the department funding the overload salary (the regular load, 1.0 FTE, and salary should remain in the faculty’s home department).

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SUPPLEMENTAL FACULTY: Full time equivalency for supplemental faculty can be calculated by taking the total teaching credit hours (which are generally equivalent to the credit value of the course(s) taught) for each supplemental faculty, and dividing by 12. Twelve hours is a broadly accepted standard for a full time teaching load. (If your institution assigns one course unit instead of three or four credit hours to a course being taught, use a divisor of 4) Because Supplemental Faculty generally are not supported by external funds, Column C will typically equal Column A. Any non-faculty person teaching a course (dean, provost, etc.) is considered "contributed service personnel" and you should calculate their FTE using the supplemental faculty convention described above and report their FTE, SCH and OCS in the supplemental faculty row.

TEACHING ASSISTANTS: You are asked to assign an FTE value to teaching assistants, apportioned between credit bearing course activity where the teaching assistant is the instructor of record, and non-credit bearing course activity (i.e., section leader for zero-credit laboratories, discussion sections, recitation sections). To do this, take the FTE value for teaching assistants in a given academic department or program, as it appears in your personnel file. Then apportion the FTE as follows: Credit Bearing Courses:   Use the same convention as with Supplemental Faculty. Take all courses which are credit bearing and for which teaching assistants are the instructors of record, and divide the total teaching credit hours by 12. The resulting quotient is the teaching assistant FTE for credit bearing course activity.Non-Credit Bearing Activity:  From the total teaching assistant FTE, taken from your personnel file, subtract the calculated FTE for credit bearing activity as outlined above. The difference is the FTE for non-credit bearing activity. It is understood that on many campuses, the non-credit bearing activity is not exclusively instructional, and may include activities such as grading papers. However, the decision to allow teaching assistants to do things other than teach is analogous to allowing other departmentally paid faculty types to take reduced loads to engage in non-teaching activity. In both instances, salaries are associated with personnel, and in the interest of consistency, the personnel should be counted as a component of common practice in higher education.

http://www.udel.edu/IR/cost/definitions.html

/tt/file_convert/5a78c7317f8b9a21538d3a4b/document.docx

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