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Fiscal State of the University May 19, 2011. Willie J. Hagan Vice President for Administration and Finance/CFO. Charge from Academic Senate BL 08-02.
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Fiscal State of the UniversityMay 19, 2011 Willie J. Hagan Vice President for Administration and Finance/CFO
Charge from Academic SenateBL 08-02 • “In the fall and spring semesters, the Chief Financial Officer shall be invited to present to the Senate a report on the fiscal state of the University. The report in the fall will be given as close as possible to the beginning of the semester. The report in the spring will be given prior to the spring marathon meeting. The report shall include but not be limited to: • (a) the sources and uses of all revenues designated to the university (including auxiliary units and extended education); and • (b) budget priorities, issues, and challenges. Following each address, the Chief Financial Officer shall answer questions from those in attendance.” 2
Report Preparation Paulette Blumberg, Executive Assistant to the VP Admin. & Finance Naomi Goodwin, Associate Vice President, Administration and Finance Brian Jenkins, Associate Vice President, Administration and Finance Sarah Song, Budget Director 3
Agenda • Overview of University Finances • Budget Reports Available Online • 2010-11 University Revenue Sources • 2010-11 Operating Fund Budget and Expenditures • Quick Summary • 5 Year Operating Fund Budget Summary • FY 2010-11 Operating Fund Budget & Expenditure Summary • Preliminary FY 2011-12 and 2012-13 Budget Summary 4
Budget Reports Budget Reports Available Online - Sources and Uses of Revenues http://finance.fullerton.edu/Budget/BudgetReports/ • Contents Include the Following: • University Revenue Budget • Operating Fund Budget Summary • Operating Fund Quarterly Budget and Expenditure Reports • State Allocation Summary • Operating Fund Budget, Allocation and Revenues • Operating Fund Budget, Expenditures by Division • Operating Fund Budget, Expenditures by Program • Operating Fund Budget, Expenditures by Division by Program • Operating Fund Allocation by Division • Operating Fund FTE Summary by Division • Operating Fund Budget Detail • Operating Fund by Cost Center • Lottery Budget
2010-11 University Revenue Sources • The Student Union Budget includes the amount to be transferred to ASI to be included in the ASI Budget • Budget figure for operations only, does not include fundraising • Excludes Financial Aid and Capital Funds
2010-11 Operating Fund Budget Summary Expenditures by Division
FY2011-12 Budget Update Quick Summary • In a memo dated April 14, the Chancellors Office issued the official 2011/12 budget allocation plan based on the $500 million CSU budget reduction. • After factoring in all of the mandatory costs, financial aid calculation changes, and system-wide budget solutions, such as the 10% tuition fee increase, our CSUF campus share of the budget reduction is $23.6 million. • We will carry forward a baseline budget surplus from FY 2010/11 of $28.6 million. • After using our $28.6 million baseline budget carry-forward to cover our $23.6 million share of the budget reduction, we are left with $5 million to fund University priorities or hold for possible future baseline budget reductions. • The May Revise still has the CSU budget cut at $500M. If CSU gets additional cuts, CO contingency planning includes up to an additional 32% tuition fee increase as a solution. 10
FY 2011-12 & 2012-13 Preliminary Budget Summary *Lottery Fund Allocation of $1.8M and Lottery loan payback of $700K have not yet been factored into this summary. **Prior year recommendations carried forward. PRBC is currently working on FY 2011-12 actual recommendations. 15
So What Do We Know… • Using the baseline carryfoward of $28.6M and University one-time reserves, we are able to adequately address our $23.6M share of the FY 2011-12 CSU $500M budget reduction as well as fund continuing PRBC priorities and other University budget requirements. • The current fiscal situation represents the best case scenario. The Governor’s 2011-12 May revise budget reflects the potential for an additional $500M in reductions for the CSU. Should this occur, the current stated strategy by Chancellor Reed is to significantly increase tuition fees. (CSUF’s estimated share of additional $500M reduction minus tuition fees is approximately $7M - $10M. • For FY 2012-13, assuming: • No additional budget cuts • No fee increase • No enrollment changes (all big assumptions) • Continued funding of multi-year commitments (e.g. new faculty searches, SFR budget restoration and various research initiatives) • We anticipate a $2.1M baseline and $7.8M one-time reduction. 16
So What Do We Know…continued • In order to fund additional items we will need: • Additional revenue • Continued efforts to reduce spending • Savings due to increased operational efficiencies • Reallocation from current uses to higher priority items • Collaborations and shared solutions. • The Chancellor’s Office may not allow us to grow our way out of the fiscal problem with increased enrollments. It is likely we’ll be penalized for any enrollment growth exceeding our target by 2%. • All of this reinforces the need for multi-year planning. 17
Budget Issues, Priorities & Challenges • “The visiting team concluded that the long-term forecast, especially for CSU, is not yet clear enough to confirm whether the budget-related challenges that CSUF currently faces will, over time, constitute a “new normal” for the university.” –WASC • The New Normal Is Not So New • Impact of “Opportunistic Vacancies” • Academic Advisement • Deferred Maintenance (buildings, classrooms, furniture, labs) • Faculty/Staff/Management retirements, resignations, etc. 18
Budget Issues, Priorities & Challenges continued • Remaining competitive as an employer in the job market • More work, fewer people, less time • Reduced access • Qualified students • Community Colleges • Increased time to degree • Reduced services (financial aid, advising, etc.) • Reduced student employment • PRBC Priorities – still need to invest 19
