1. Review of SOM Revenues and Allocation Process New Faculty Orientation Session October 19, 2011 S. Dawn Bulgarella Sr. Associate Dean for Administration & Finance

2. SOM Revenues - $569 Million FY 2010 Values are in millions

3. Mission-Aligned Budgeting Missions:Teaching Research Patient Care Budget Sources: Tuition IER HSF ASETF Grants Hospital

4. SOM ASETF Allocation FY 2010

5. Purpose of the ASETF (state) Allocation Process  Align state funding with appropriate missions of the SOM and its departments  Develop a model that helps the Dean evaluate the performance of departments with regard to teaching, research and space utilization  Propose methods to identify and correct inequities in the historic allocation of state funding to departments

6. Allocation Model for SOM/JHS Depts Departmental infrastructure7.5% Size of Faculty (FTEs)7.5% Teaching Efforts 35% Research Productivity 35% Dean’s discretion 15% Space costs are factored into final allocation Legislative earmarks are respected outside of the model Basic and Clinical departments are treated the same in the model

7. Teaching Subcomponent of the Model  Teaching (35% overall) -Graduate teaching : credit for graduate students registered/mentored; # of didactic credit hours; # PhDs conferred -Medical teaching : credit for # of course or clerkship directors; faculty contact hours in MS1&2; contact weeks in MS3&4; mentorship of scholarly activity -T-series & R21s: credit for NIH training grants -Post-docs & Residents : credit for headcount -

8. Research Subcomponent of the Model  Research (35% overall) -Total expenditures : credit for total expenditures on extramural funding as a market share across the School – incentivizes grants awarded -Extramural salary coverage : credit for extramural salary support as a market share across the School – incentivizes collaboration on grants

9. Accountability for Space  Space is assigned to departments and charged back at three different rates per square foot per year: research space (~$24), admin space (~$15), and clinical space (~$18)  If a department generates sufficient indirect costs to cover the space costs assigned to them, it is held harmless in the allocation  If a department does not cover its space costs via generation of indirect costs, the ASETF allocation is reduced accordingly

10. Discretionary  15% (~$7.65M) of the allocation of state dollars to departments is based on Dean’s discretion – primarily now determined by quality and special circumstances as discussed with the Dean by the chairs.

11. SOM State Appropriation History: Includes Operations and Special Program Support

12. State Support Principles  Protect core missions Education Research Patient Care/Service  Continued investment in areas of strategic priority  Assessment of primary revenue streams (i.e., IER, HSF/Health System, Philanthropy) for new opportunities to improve operations and strategic growth  Improve productivity and efficiency where possible

13. A Glass Half-Full Perspective  Every other medical school will be negatively impacted by the current economy – some will figure out how to weather, and even competitively strike, during this down time  UAB ranks 14 th in “support from parent institution” among 125 medical schools

14. In Conclusion  Our Allocation Model is complicated, but tested and transparent  We believe that we are rewarding the behaviors that fulfill the School’s mission  The SOM and its departments are well supported relative to our peer institutions

15. But, Is There Enough Institutional Funding In Departmental Budgets to Support Growth  Yes, if we are Productive & Efficient: -extramural funding thresholds are met and maintained (probably 55-70%) -faculty reasonably participate in teaching (Medical School and Graduate School) -departments are efficiently operated (i.e., spending less than 35-40% of state funding on things other than faculty salaries

16. Questions? Thank you!