1. University Budget Basics December 2010

2. First - The Basics  Fiscal year  Fund Types - Unrestricted vs. Restricted  Object Codes  Responsibility  Organization Codes  Budget vs. Actual  Operating Units - Academic or Service  Auxiliary Units  System Campuses 38 – Moore School of Business 15000A000 – DMSB 40140 – Fall Tuition Revenue 52024 – Domestic Travel 10-10-1-11-38-00 2

3. More Basics – System Overview Flagship Institution - USC Columbia Senior Campuses USC Aiken USC Beaufort USC Upstate Regional Campuses USC Lancaster USC Salkehatchie USC Sumter USC Union 3 The System Campuses have approximately 33% of the enrollments of the system and 18% of the total current funds budget.

4. Total Current Funds - Unrestricted and Restricted At USC, this includes funds: A, B, C, D, E, F, G, H, J, K, L, S, R & RP Excludes funds: T, V, W, X, Y & Z General Operating – State Appropriations, Tuition & Fees Departmental – Student Activities, Sales and Service Auxiliary – Enterprise services Grants, Contracts and Gifts Basics Continued – Alphabet Soup 4

5. http://busfinance.admin.sc.edu/budget http://www.scstatehouse.gov/html- pages/budget.htm Where is the University Budget?

6. The University budget and unit budgets are spending plans that:  Determine sources of funds  Allow maximum use of resources  Control spending  Coordinate activities to meet goals & objectives  Serve as a communication tool Why Do We Need to Budget? 6

7. State law Accreditation standards Board bylaws Why Do We Need to Budget? 7

8. Prepare the annual budget document for consideration by the Board of Trustees that reflects the mission and vision of the University of South Carolina. Assist business officers and administrative heads of colleges, campuses and other University units in executing the Board- approved budget and in maximizing their use of limited resources to meet the University's mission of providing high quality instruction, research and public service to its customers. Prepare and submit the University's state budget to appropriate agencies and assist legislative contacts in justifying budget requests. Assist executive University staff and other Division of Finance and Planning staff in ensuring that the University maintains a sound financial status and operates within the budget limitations established by the General Assembly and the Board of Trustees. What Does the Budget Office Do? 8

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11. How much do you think USC’s budget is? How much is it?

12. A) $ 76,919,624 B) $ 121,345,898 C) $ 538,065,932 D) $ 1,125,137,838 E) $ 1,121,838,000 12

13. Everyone wins! A) $ 76,919,624 - Columbia Athletics Department Budget B) $ 121,345,898 -System State Appropriations Budget C) $ 538,065,932 - Columbia “A” Fund Operating Budget D) $ 1,125,137,838 - System Total Current Funds Budget E) $ 1,121,838,000 - USC State Budget Total 13

14. 14 FY11 Total Current Funds Revenue Budget

15. 15 FY11 Base Cut – State Appropriations Bill

16. 16 USC System - State Appropriation Reductions

17. 17 Total Current Funds Revenue Sources

18.  Operating/General funds  Majority provided from tuition and fees and state appropriations  These funds are also called Education and General – or “E & G” funds  “A” funds are unrestricted - dollars may be used to accomplish the goals of the unit within the constraints of State and University policies, procedures & procurement guidelines What are “A” Funds? 18

19. At July 1, 2010 – USC System “A” Funds Revenue Tuition and Fees $ 440,365,81176.37% State Appropriations$ 121,345,89821.04% Grants, Contracts and Gifts$ 6,257,497 1.09% Sales, Services & Other Sources$ 8,643,696 1.5% Auxiliary Enterprises$ 0 0.0% Total “A” Fund Budgets$ 576,612,902 USC System “A” Fund Budgets

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21. USC Columbia In-State Undergraduate Tuition & Required Fees 21

22. 22 Undergraduate Tuition & Required Fees Comparisons South Carolina Public Higher Education Baccalaureate Institutions FY 2011 Percentage IncreaseTuition Amount Winthrop4.91% $12,176 Clemson7.50% 11,908 College of Charleston14.75% 10,314 The Citadel13.00% 9,871 USC Columbia6.90% 9,786 Coastal Carolina4.90% 9,390 Lander4.50% 9,144 USC Upstate5.00% 9,072 SC State5.20% 8,898 Francis Marion6.50% 8,480 USC Aiken6.00% 8,374 USC Beaufort9.50% 7,940 USC Regional Campuses - under 75 hours6.50% 5,888

23. FY2011 Tuition and Required Fee Comparison Public SEC Schools 23

24. The South Carolina Education Lottery provides funds to South Carolina students based on merit for use at public and private institutions in the state. 24 What About the Lottery?

25. Higher Education Price Index Similar to the Consumer Price Index (CPI) Calculated by the CommonFund in Washington  Interim reports periodically  Annually updated in July  2.0% last year .9% this year HEPI is made up of 8 variables – most personnel  Faculty, administrative, clerical, and service salaries  Fringe benefits  Misc. services  Supplies and materials  Utilities 25 HEPI

26.  Labor -% of budget for personnel & fringe -Health insurance and retirement increases -Academic labor market  Technology  Utilities  Enrollments go up  Fund new initiatives Why Does Tuition Go Up? 26

27.  Technology Fee  Enrichment/Program Fees  Lab Fees  Housing, Food, Parking, etc 27 Other Fees

28. Who has input into developing the budget? 28

29. External Budget Development & Execution Budget Development  Commission on Higher Education  Governor  General Assembly Budget Execution  Budget & Control Board  State Treasurer  Comptroller General 29

30. External Budget Process 30

31. Governor’s Executive Budget House Ways & Means Budget Senate Finance Budget Conference Committee Budget FY2012 External Budget Process 31

32. Internal Budget Process 32

33. For Columbia Plan on tuition increase each year Increase student population systematically Cut budgets over two years and use one-time funds to bridge Overcut – Risk of mid-year cut – Estimation Risk Reduce budgets strategically (not across board) The Baseball Bat 33

34. Tuition Fee Increase Enrollment Increase Overcut from FY 2010 Recurring Expense Reduction = Total State Reduction Columbia: Example Only The Baseball Bat FY 2010-11 Recurring Cut = $23,488,306 Tuition increase5%$12,000,000 Added enrollment200$1,546,395 FY 2010 Overcut $1,418,535 Expense Reductions $8,523,376 Total State Reduction $23,488,306 FY 2011-12 Recurring Cut = $20,000,000 Tuition increase5%$24,600,000 Added enrollment200$4,755,164 Expense Reductions $14,133,142 Total State Reduction $43,488,306 34

35. Travel Restrictions Faculty & Staff Hiring Freeze Post-Retirement Hires Retirement Incentive Plan and Voluntary Separation Plan Under Consideration – Cell Phones, Parking Focus Carolina – Cost containment & efficiency study with Huron Consulting 35 Cost Management Measures

36. USC Columbia Campus – FY 2011 36

37. USC Columbia Campus – FY 2011 37

38. Strategic Planning & Budget Development 38 System-wide strategic planning; inclusive and transparent Budgets are calibrated to strategic plans Core Mission and Access & Affordability Two-year modification of Columbia budget model Strategic finance – includes capital and operating budgets