Framework for a NewCampus Budget ProcessIncentive-based Budget Model OverviewUCSD Campus VisitJanuary 30, 2013

A NEW INCENTIVE-BASED BUDGET MODEL

GOALS:

• Advances the university’s Vision of Excellence

• Encourages Creativity

• Leads to a more Transparent Budget Process

• Note: Model allocates funds to deans not departments

• Includes a Transition Strategy

• Model neither imposes cuts nor prints funds

A NEW INCENTIVE-BASED BUDGET MODEL

KEY ATTRIBUTES:

• Revenue allocation tool (not a cost allocation model)

• Allocates funds at level of the dean or vice chancellor

• Allocates as much revenue as possible to units; AND

• Maintains resources to ensure Provost/EVC role

• Incentives are forward-looking; also look to remove barriers

• Existing budget authority retained; this is not a re-benching

• Use of metrics to evaluate effectiveness in annual process

REVISED TIMELINE

State designated and restricted; 1% Student Fees; 5%

Tuition; 11%

State unrestricted funds; 8%

Indirect cost re-covery; 3%

Grants and contracts, direct; 14%

Federal (Hatch, Pell Grants); 2%Sales and Service, Auxiliary; 11%

Gifts, endowments, interest, other; 4%

UC Davis Medical Center; 40%

Budget Model Phase I Components

Budget Components in Budget Model,~$820 million

Campus Budget Model

REVENUE FLOW

State Appropriatio

n

Provost

Reven

ue

Sourc

es

Spendin

gA

uth

ori

ty

HArCS

Undergraduate Tuition

Indirect Cost Recovery

Spendin

g U

ses Other priorities

• Start-ups

• DM

FTE

• Faculty merits

• TOE• Initiativ

es• Academ

ic Plan

Administrative &

Academic Support

Units

• Salary• Benefits• OP Tax

Fixed Costs

FTE

• Salary• Benefits• Start-

ups

Instruction

• TAs• Lecturer

s• Readers

Fixed Costs

• Staff salaries

• Faculty salaries

• Benefits • OP Tax

Tuition allocated directly to schools and colleges ($136 M)• 60% based on student credit hours• 30% based on degree majors• 10% based on degrees awarded

Return to Aid (RTA) ($77 M)• Deducted before allocating to schools

and colleges• New model does not change our

commitment to student support

Assessment ($60 M)• 30% after accounting for RTA• Portion of new tuition is assessed for

allocation by the Provost

Budget Model Undergraduate Tuition Revenue

UNDERGRADUATE TUITION ALLOCATION

Revenue is distributed as follows:• 60% based on student credit

hours• 30% based on degree majors• 10% based on degrees awarded

Share of totals (two-year avg.)• 18% of SCH total• 5.6% of degree majors• 3.6% of degrees awarded

UG Tuition revenue• Approximately $18 million

Current Budget

New Model

Baseline Budget

GF

CBP

ICR

$18MUGT

Derived from a variety of sources ($428 M)• Assessment on undergraduate tuition

($60 M)• Graduate tuition ($55 M)• Unrestricted state support ($300 M)

Portion of ICR also flows to central campus ($90 M)

Used to support • Campuswide services from

administrative and academic support units

• Institutional initiatives• Basic operations of academic units

Initially, self-balancing part of the model

Budget Model Provost Allocation

PROVOST ALLOCATION & GRADUATE TUITION

Initially, Provost Allocationis calculated as follows:• 2011-12 General Fund Base

Budget, plus benefits from the central pool, less undergraduate tuition revenue

Provost Allocation and Graduate Tuition• Approximately $20.6 millionCurrent

BudgetNew

Model

Baseline Budget

PA & GT

GF

CBP

ICR

$20.6M

$18MUGT

PA & GT

Indirect Cost Recovery FundsBudget Model Phase I (continued)

dollars in thousands

1 Total ICR generated 2011-12 and distributed 2012-13 $ 121,700

2 Less categorical set-asides (ARRA, Garamendi, etc.) $ (25,200)

3 ICR available for distribution $ 96,500

4 Distribution for Deans, VC-R (34%) $ 32,800

5 Distribution for Provost (66%) $ 63,700

6

7 Distribution for Deans, VC-R (34%) $ 32,800

8 Less prior year campus return program $ (14,700)

9 Less OP Tax, benefits, existing base budgets $ (8,300)

10 ICR Increase to Deans, VC-R $ 9,800

11

12 Distribution for Provost (66%)

13 Graduate student support, matching funds $ 10,000

14 Research support (VC-R, VC-ARM, Library) $ 18,000

15 Transition for OP tax implications $ 5,500

16 Provost decisions (debt service, start-ups, etc.) $ 30,200

INDIRECT COST RECOVERY (ICR)

Revenue is distributed as follows:• 66% of ICR generated to

central campus• 34% of ICR generated to unit• Achieve a 60%-40% split by

2013-14

Share of ICR• Approximately $1.4M

$1.4M

$20.6M

$18M

Current Budget

New Model

Baseline Budget

UGT

PA & GT

ICR

GF

CBP

ICR

BASELINE BUDGET

2012-13 Estimate

Current Budget

New Model

Baseline Budget

UGT

PA & GT

GF

CBP

ICR

UGT

PA & GT

ICRICR

• Budget news (campus, UC system, state)o budgetnews.ucdavis.edu

• Data, analysis and reportso Provost’s Dashboard:

provost.ucdavis.eduo Campus Facts: facts.ucdavis.edu o Campus Budget Office:

budget.ucdavis.edu

• Advocacy (critical!)o www.ucforcalifornia.org

• Annual financial schedules and reportso www.universityofcalifornia.edu/reportingt

ransparency

Budget Information Sources