Fiscal Strength Finding the balance at UMass Boston

Fiscal Strength operating margin 2.5% actual FY12 2% target financial cushion 28.2% actual FY12 >20% target return on net assets 8.2% actual FY12 5% target debt ratio 5% actual FY12 8% threshold endowment/FTE $4,711 actual FY12 $7,669 UMass avg

Fiscal Strength operating margin 2.5% actual FY12 2% target financial cushion 28.2% actual FY12 >20% target return on net assets 8.2% actual FY12 5% target debt ratio 5% actual FY12 8% threshold endowment/FTE $4,711 actual FY12 $7,669 UMass avg …operating margin should exclude market value adjustments for investments …we should be using interest expense not interest paid and we should consider … a revised calculation which adds in principal payments to the expenses and takes out depreciation Start with Income Before Other Revenues, Expenses, Gains & losses Subtract the value of the Build America Bond subsidy Subtract the amount of interest expense that was capitalized Add back depreciation Subtract the amount of principal payments made Subtract transfers to Quasi Endowment (which will move up to Restricted Expendable net assets) Subtract transfers to Plant in support of the Master Plan

Fiscal Strength Revenue diversity Enrollment Student fees State support Grants (federal, state) Other (private, ESS, auxiliaries) Financial management Expenditure control Reporting Multi-year planning Analysis Asset base Physical infrastructure Deferred maintenance IT infrastructure Financial flexibility Endowment (investments) Reserves (net assets) Debt

Fulfilling the Promise

Fiscal Strength Enrollment Student fees State support Grants (federal, state) Other ( ESS, Auxiliaries) Expenditure control Reporting Multi-year planning Analysis Physical infrastructure Deferred maintenance IT infrastructure Endowment Investments Reserves Debt

Revenue diversity breadth of unique revenue streams EnrollmentFederal support volatility federal financial aid in- or out-of-state federal grants undergraduate, graduate, PhD Student fees Private fund-raising tuition policy capital campaign(s) mandatory fees gifts differential fees endowment waiver policies public/BoT/legislative interest State support Other annual appropriation auxiliary services state financial aid ESS state ISAs, contracts, grants

Enrollment (FTE)

Student fees

Asset base investment in physical assets Physical infrastructure (size, composition, quality) sq ft inventory how is space used (classrooms, conference rooms) quality of spaces (expectations, stds or peers) Deferred maintenance current conditions mechanical systems vs fluff & buff (painting, carpet) proactive vs reactive IT infrastructure changing technology UITS

Financial flexibility ability to respond to external events Endowment (investments) Governance local external (Presidents Office, State) quasi permanent Reserves current level comparison to peers Debt current level, expected growth financing (availability, cost)

Debt

Expense management demonstrate effective cost management & long-term planning Expenditure controlAnalysis actual to budget results depth of understanding growth trends evidence informs plans comparison to peers linked to outcomes inform actions Reporting integrity of data systems that support customers mgmt reporting that informs decision Multi-year reporting capital plan breadth of understanding enrollment planning decision horizon integrity of modeling

Expense Growth FY13 = balanced budget

Fiscal Strength Enrollment Student fees State support Grants (federal, state) Other ( ESS, Auxiliaries) Expenditure control Reporting Multi-year planning Analysis Physical infrastructure Deferred maintenance IT infrastructure Endowment Investments Reserves Debt

Fiscal Strength Enrollment Student fees State support Grants (federal, state) Other (ESS, Auxiliaries) Expenditure control Reporting Multi-year planning Analysis Physical infrastructure Deferred maintenance IT infrastructure Investments Reserves Debt

Planning for FY14 Expenditure control fund consolidation changes to budget process Reporting personnel vs operating vacancy factor expanded mgmt reporting more education, training options Multi-year planning greater involvement make it meaningful Analysis expanded partnerships btw academic & support areas issue & policy papers

Fiscal Strength Revenue diversity Enrollment Student fees State support Grants (federal, state) Other (private, ESS, auxiliaries) Financial management Expenditure control Reporting Multi-year planning Analysis Asset base Physical infrastructure Deferred maintenance IT infrastructure Financial flexibility Endowment Reserves Debt