1. UQ’s Budget Contribution Model An Overview VC Forum Head of Schools Workshop September 14, 2012

2. Introduction What is the BCM? BCM ~ Centre to Faculty Structure of the BCM BCM Drivers University Funding Model – BCM Distribution BCM ~ Income BCM ~ Central Overheads BCM ~ Infrastructure Support Costs UQ’s Budget Contribution Model

3. What is the BCM? Mechanism for distribution of income and allocation of costs Not all income Not all costs A common misconception is that the BCM is the budget The BCM is an input into the budget process UQ’s Budget Contribution Model

4. What is the BCM? The BCM is used to: Distribute CGS Block Grant income to Faculties and Institutes Distribute CGS Research (Secondary Gains) to Faculties and Institutes Allocate Central Overhead against Faculties and Institutes UQ’s Budget Contribution Model

5. What is the BCM? The following income is not included in the BCM: Research Income Trading income Investment income Donations, Scholarships and Bequests The following expenditure is not included in the BCM: Direct costs at Faculty and Institute Capital Expenditure from tied income sources UQ’s Budget Contribution Model

6. BCM ~ Centre to Faculty The BCM is a conduit between the Centre and the Faculties and Institutes The Faculty may in turn distribute income in accordance with its own mechanism The Faculty may allocate costs in accordance with its own mechanism Portion of Central Overhead as levied upon it Allocation of Faculty Overhead Running the Faculty Office Faculty Initiatives (Strategic) UQ’s Budget Contribution Model

7. Structure of the BCM Income CGS Block Grant Secondary Gains on Research (Research Block Grant) Tuition Fees Deductions Central Costs Infrastructure Support Costs (Repairs and Maintenance, Insurance) Strategic Initiatives Debt Servicing Capital UQ’s Budget Contribution Model

8. BCM Drivers Income distributed and costs (deductions) allocated to Faculties and Institutes on the basis of selected drivers The cost or deduction driver is not activity based costing. Has been determined as a reasonable proxy for resource usage The drivers are influenced by UQ’s strategic objectives. For example, Research EFTSL and Research secondary gains are not included in overhead calculations UQ’s Budget Contribution Model

9. BCM Drivers ~ Income UQ’s Budget Contribution Model ItemDriver CGS Block GrantWeighted Funded EFTSL Medical LoadingFaculty of Health Science Regional LoadingFaculty of Science Student Contribution ChargeWeighted Funded EFTSL Enhanced Student Contribution Charge40 % WFETSL, 30 % EFTSL, 30 % SECat T&L Performance / HEPP / ISPExternal Strategic Funding distributed directly by office of DVC A and SDVC JRE / RTS 40 % RHD EFTSL, 10 % RHD Completions, 40 % Research Income, 10 % Weighted Publications (ERA) APA ScholarshipsExternal Strategic Funding distributed directly by office of DVC R RIBGExternal Strategic Funding distributed directly by office of DVC R SRE Fellowships/Research Infrastructure support ex DVC R $4.8m Balance ~ Category 1 Income Weighted by ERA Index, 1/2 Institute Support, 1/2 Tuition FeesDirect to Faculties / Institute

10. BCM Drivers ~ Costs Drivers Include: Funded EFTSL Weighted Funded EFTSL International EFTSL Non Research EFTSL Staff FTE Space Total Income (BCM) iCEVAL Examples: Library 50 % Staff FTE 50 % Non Research EFTSL DVC I 100 % International EFTSL UQ’s Budget Contribution Model

11. BCM Drivers ~ Costs UQ’s Budget Contribution Model ItemDrivers Office of: Vice ChancellorTotal Income, Non Research EFTSL, Staff FTE, International EFTSL Senior Deputy Vice ChancellorTotal Income, Non Research EFTSL, Staff FTE DVC (Academic)Non Research EFTSL, Total Income, Funded EFTSL DVC (Research)Total Income, Non Research EFTSL, Staff FTE, International EFTSL DVC (International)International EFTSL DVC (External Relations)Total Income EDONon Research EFTSL, Staff FTE, Space, International EFTSL, Total Income Strategic InitiativesTotal Income, Funded EFTSL, Weighted Funded EFTSL, iCEVAL Infrastructure Support Non Research EFTSL, Staff FTE, Space, International EFTSL, Total Income Capital & Debt ServicingNon Research EFTSL, Space

12. BCM Drivers ~ Data Sets UQ’s Budget Contribution Model CategoryCalculation/Data Source CGS LoadForecast data – Planning Office * Funding Index Tuition Fees - $ and EFTSLTuition Fee Model JRE/RTS (4 indexes below) Research IncomeHERDC – Average of preceding two years PublicationsAverage of preceding two years AwardsAverage of preceding two years, PhD weighted by 2 RHD LoadImmediate prior year actual load Non Research EFTSLAddition of the above EFTSL streams (non research only) SpaceFaculty and Institute space – latest per Reportal FTECensus data at 31/3/2012 Total IncomeTotal income per BCM less Research Block Grant less Enhanced Contribution Charge less Strategic Contribution

13. University Funding Model ~ BCM Distribution Distributed through the BCM 2012 UQ’s Budget Contribution Model BCM $882 m BCM $882 m * CGS Block Grant $ 448 m * Research Block Grant $ 146 m * Tuition Fees $ 288 m > Faculties and Institutes $ 407 m > Central Costs (1) $ 272 m > Strategic Funding (2) $ 83 m >Strategic Funding (3) $ 58 m > Debt Servicing $ 15 m > Capital $ 47 m Note (1) ~ Much of these incurred on behalf of total UQ Note (2) ~ Discretionary Strategic Funding Note (3) ~ Direct Flow through for RIBG, SRE, APA Scholarships, HEPP Note (4) ~ In excess of 90 % of Strategic Funding flows back to Faculties and Institutes $ 127 m (4) Total Effective Distribution to Faculties and Institutes $ 534 m 61 % of BCM Income

14. Direct Revenue Distributions (2012) UQ’s Budget Contribution Model CGS Block Grant C’wealth Contribution $269m Student Contribution $167m Tuition Fees International $258m Domestic $ 30m Research Block Grants JRE $ 30m RTS $ 56m SRE $ 11m Faculties And Institutes Tuition Fee Modelling Research Performance Domestic Load Modelling FFI

15. Research Block Grants JRE $ 30m RTS $ 56m SRE $ 11m SRE$ 5m APA$ 20m RIBG$ 24m Research Income 40% RHD Load 40% RHD Awards 10% Publications 10% Category 1 Income moderated by ERA Fellowships/Infrastructure Direct to Scholars via DVCR

16. Load Models One Commonwealth-supported domestic model Four international tuition fee models Undergraduate Postgraduate Coursework Postgraduate Research Non-award Three domestic tuition fee models Undergraduate Postgraduate Coursework Postgraduate Research

17. TOTAL EFSTL 2012 Actual by program CONTINUING EFTSL 2013 Model COMMMENCING 2013 Faculty Estimate TOTAL EFTSL 2013 SCHOOL/SUBJECT AREA EFTSL SPLITS 2013 Based on Historical Patterns FUNDING BAND/COURSE FEE RATES 2013 Actual REVENUE By program, faculty etc Known Value Modelling Process Faculty / Institute Input Legend Load Models

18. CONTINUING EFTSL 2013 Model Granularity: Program and Program Year Retention: Semester on Semester Based on 3 year history Distribution:1 year history (annualised) Schools Tuition Fee Band or CGS/SCC Band

19. Load Models Granularity: Semester Program (International) Program and Program Year (Dom) COMMMENCING 2013 Faculty Estimate

20. Faculty Funding Index BCM: International tuition fees passed through ‘as earned Domestic load weighted by Faculty Funding Index Faculty Funding Index: A multiplier that is applied to Faculties’ student load (EFTSL) to calculate the weighted student load (WEFTSL) Representative of Commonwealth Funding Bands Moderated for scale FFI

21. Faculty Funding Index 2011 Data Commonwealth Funding Clusters

22. Faculty Funding Index 2011 Data Commonwealth Funding Clusters

23. Faculty Funding Index Commonwealth Funding Clusters Arts0.78 BEL0.59 EAIT1.24 Health1.19 Science1.30 SBS0.84 2012: Variance “Theoretical” FFI to Actual FFI <.019

24. Questions?