2

Institutional Support Expenditures divided by

Total Operating Expense

According to the Legislative Budget Board: “provides an indicator of the proportion of operating budget being spent on administrative costs.”

Institutional Support Expenditures divided by

Total Operating Expense

According to the Legislative Budget Board: “provides an indicator of the proportion of operating budget being spent on administrative costs.”

3

Institutional Support is a functional category defined by NACUBO (National Association College & University Business Officers) used to allocate costs between higher education activities.

Institutional Support is a functional category defined by NACUBO (National Association College & University Business Officers) used to allocate costs between higher education activities.

4

Institutional Support includes: Executive Management – President, VPs & their staff including

operations related to planning & legal Fiscal Operations – should not include bad debt expense General Administration– HR, Purchasing, etc. Administrative Information Technology Public Relations/Development

Institutional Support includes: Executive Management – President, VPs & their staff including

operations related to planning & legal Fiscal Operations – should not include bad debt expense General Administration– HR, Purchasing, etc. Administrative Information Technology Public Relations/Development

5

InstructionInstruction – costs – costs directly related to instructional mission (includes department chairs).

Academic Support Academic Support – includes dean’s offices & library, museums, academic computing & advising.

ResearchResearch– includes expenses for activities specifically organized to produce research whether internal or externally funded.

Public Service Public Service – non instructional activities to external groups. Includes conferences, institutes, consulting & general advisory services.

InstructionInstruction – costs – costs directly related to instructional mission (includes department chairs).

Academic Support Academic Support – includes dean’s offices & library, museums, academic computing & advising.

ResearchResearch– includes expenses for activities specifically organized to produce research whether internal or externally funded.

Public Service Public Service – non instructional activities to external groups. Includes conferences, institutes, consulting & general advisory services.

6

Student Services Student Services – – costs that have the primary purpose of contributing to students’ emotional and physical well being and intellectual, cultural & social development (outside the context of the formal instructional program.) Includes admissions & records, student IT, student health, counseling & career guidance, financial aid administration.

Does not include intercollegiate athletics programs as those must be identified as an Auxiliary Enterprise by Texas law.

Student Services Student Services – – costs that have the primary purpose of contributing to students’ emotional and physical well being and intellectual, cultural & social development (outside the context of the formal instructional program.) Includes admissions & records, student IT, student health, counseling & career guidance, financial aid administration.

Does not include intercollegiate athletics programs as those must be identified as an Auxiliary Enterprise by Texas law.

7

Operation & Maintenance of Plant Operation & Maintenance of Plant – includes – includes administrative costs, building maintenance, custodial, utilities, landscape / grounds, repair & renovation, security & safety (police, disaster preparedness, environmental health & safety, etc.), logistical services (central receiving, stores) and facilities related IT.

Scholarships & FellowshipsScholarships & Fellowships Auxiliary EnterprisesAuxiliary Enterprises– self supporting entities – self supporting entities to furnish

goods or services to students, faculty, staff or incidentally to the general public; includes all related administrative expenses.

Operation & Maintenance of Plant Operation & Maintenance of Plant – includes – includes administrative costs, building maintenance, custodial, utilities, landscape / grounds, repair & renovation, security & safety (police, disaster preparedness, environmental health & safety, etc.), logistical services (central receiving, stores) and facilities related IT.

Scholarships & FellowshipsScholarships & Fellowships Auxiliary EnterprisesAuxiliary Enterprises– self supporting entities – self supporting entities to furnish

goods or services to students, faculty, staff or incidentally to the general public; includes all related administrative expenses.

Institutional Support Expenditures Total Operating Expense

(FY09 Annual Financial Report)

Institutional Support Expenditures Total Operating Expense

(FY09 Annual Financial Report)

$40,437,657____________ = 11.24%

$363,087,491

9

UTSA 5 Year UTSA 5 Year Administrative Cost TrendAdministrative Cost Trend

UTSA 5 Year UTSA 5 Year Administrative Cost TrendAdministrative Cost Trend

AFR 2005 AFR 2006 AFR 2007 AFR 2008 AFR 2009

28,925,000 32,996,000 30,657,000 31,505,000 40,816,000

256,385,000 277,752,000 298,937,000 328,230,000 363,087,000

11.3% 11.9% 10.3% 11.2% 11.2%

FY96 (10.4%) FY97 (11.6%) FY03 (11.2%) FY04 (11.7%)

10

ComparativeComparativeAdministrative Cost TrendsAdministrative Cost Trends

ComparativeComparativeAdministrative Cost TrendsAdministrative Cost Trends

AFR 2006 AFR 2007 AFR 2008 AFR 2009

UTSA 11.9% 10.3% 11.2% 11.2%

UT Dallas 9.6 8.5 9.8 9.1

UTEP 8.6 7.5 7.7 7.5 (est)

UT Pan Am 8.2 9.7 9.6 10.9

UT Arlington 8.3 8.7 8.0 DNR

UT Tyler 15.4 13.2 12.7 DNR

UT Austin 6.1 5.7 5.1 DNR

A small institution will usually have a higher institutional support percent of program expense than a large comprehensive institution.

11

5 Yr Comparison by Program5 Yr Comparison by Program5 Yr Comparison by Program5 Yr Comparison by ProgramUTSA FY05 FY06 FY07 FY08 FY09 5 Yr

Chg

Instruction 34% 33% 33% 33% 30% -4%

Research 7% 9% 8% 8% 10% 3%

Academic Support 7% 8% 9% 9% 10% -1%

Public Service 6% 6% 5% 5% 5% 2%

Student Services 8% 8% 8% 9% 7% -1%

Institutional Support 11% 12% 10% 10% 11% 0%

O&M of Plant 9% 10% 10% 12% 10% 1%

Scholarships 9% 7% 8% 8% 8% -1%

Depreciation 8% 7% 8% 8% 9% 1%

12

Higher education is under scrutiny for spending and Higher education is under scrutiny for spending and considered to be inefficient.considered to be inefficient.

Governor Perry has ordered a review of higher-Governor Perry has ordered a review of higher-education spendingeducation spending executive order calls for a comprehensive review of cost-executive order calls for a comprehensive review of cost-

efficiency in the state's public higher-education system. The efficiency in the state's public higher-education system. The order lists a dozen areas to be considered, including faculty order lists a dozen areas to be considered, including faculty workload, basing state spending on student course-completion workload, basing state spending on student course-completion rates, and consolidating or eliminating academic programs. rates, and consolidating or eliminating academic programs.

To demonstrate a goal of lowering administrative To demonstrate a goal of lowering administrative costs is important when we are asking students to costs is important when we are asking students to increase tuition rates over the next 2 years.increase tuition rates over the next 2 years.

Higher education is under scrutiny for spending and Higher education is under scrutiny for spending and considered to be inefficient.considered to be inefficient.

Governor Perry has ordered a review of higher-Governor Perry has ordered a review of higher-education spendingeducation spending executive order calls for a comprehensive review of cost-executive order calls for a comprehensive review of cost-

efficiency in the state's public higher-education system. The efficiency in the state's public higher-education system. The order lists a dozen areas to be considered, including faculty order lists a dozen areas to be considered, including faculty workload, basing state spending on student course-completion workload, basing state spending on student course-completion rates, and consolidating or eliminating academic programs. rates, and consolidating or eliminating academic programs.

To demonstrate a goal of lowering administrative To demonstrate a goal of lowering administrative costs is important when we are asking students to costs is important when we are asking students to increase tuition rates over the next 2 years.increase tuition rates over the next 2 years.

13

UTSA’s LAR performance goal was 10%. We exceeded that by 1.2%

What can we do to lower our ACR? Assure we are using the account that correctly represents the

functional NACUBO program for ALL expenditures.

UTSA’s LAR performance goal was 10%. We exceeded that by 1.2%

What can we do to lower our ACR? Assure we are using the account that correctly represents the

functional NACUBO program for ALL expenditures.

14

Fill vacant faculty positions & improve the ratio of T/TT to NTT

Allocate administrative costs to Auxiliary Enterprises

Increase extramural funding – sponsored programs & gifts

Fill vacant faculty positions & improve the ratio of T/TT to NTT

Allocate administrative costs to Auxiliary Enterprises

Increase extramural funding – sponsored programs & gifts

16

Governor Perry’s Executive Order RP73 on Higher Education Cost Efficiency http://governor.state.tx.us/news/executivhttp://governor.state.tx.us/news/executive-order/13573/e-order/13573/

Directs Coordinating Board to review Directs Coordinating Board to review and offer recommendations for cost and offer recommendations for cost efficiencies in higher education efficiencies in higher education

Governor Perry’s Executive Order RP73 on Higher Education Cost Efficiency http://governor.state.tx.us/news/executivhttp://governor.state.tx.us/news/executive-order/13573/e-order/13573/

Directs Coordinating Board to review Directs Coordinating Board to review and offer recommendations for cost and offer recommendations for cost efficiencies in higher education efficiencies in higher education

17

Included in the review: State funding based on student course

completion Restructuring financial aid to improve

efficiencies & to provide aid to students who work hard to academically prepare for college

Academic program consolidation & elimination of programs that produce few graduates

Included in the review: State funding based on student course

completion Restructuring financial aid to improve

efficiencies & to provide aid to students who work hard to academically prepare for college

Academic program consolidation & elimination of programs that produce few graduates

18

Included in the review, continued: Faculty Workload Articulation agreements between 2 and 4 yr

institutions Distance Learning Alternatives to creating new campuses Course redesign to improve quality & reduce

instructional costs for more courses

Included in the review, continued: Faculty Workload Articulation agreements between 2 and 4 yr

institutions Distance Learning Alternatives to creating new campuses Course redesign to improve quality & reduce

instructional costs for more courses

19

Included in the review, continued: Cooperative, cross-system contracting &

purchasing Space utilization Energy use Cost of instructional materials Review of cost efficiencies in other states &

nations

Included in the review, continued: Cooperative, cross-system contracting &

purchasing Space utilization Energy use Cost of instructional materials Review of cost efficiencies in other states &

nations

20

Executive Vice Chancellor Scott Kelley for Business Affairs at UT System is the sole UT Representative: http://www.utsystem.edu/BUS/vice_chancellor.htm

Report to be submitted to Governor, Legislature & Report to be submitted to Governor, Legislature & institutions by November 1, 2010institutions by November 1, 2010

Assumed to supplant HB4149 report: Assumed to supplant HB4149 report: http://www.legis.state.tx.us/tlodocs/81R/senateamend/http://www.legis.state.tx.us/tlodocs/81R/senateamend/pdf/HB04149A.pdfpdf/HB04149A.pdf

Executive Vice Chancellor Scott Kelley for Business Affairs at UT System is the sole UT Representative: http://www.utsystem.edu/BUS/vice_chancellor.htm

Report to be submitted to Governor, Legislature & Report to be submitted to Governor, Legislature & institutions by November 1, 2010institutions by November 1, 2010

Assumed to supplant HB4149 report: Assumed to supplant HB4149 report: http://www.legis.state.tx.us/tlodocs/81R/senateamend/http://www.legis.state.tx.us/tlodocs/81R/senateamend/pdf/HB04149A.pdfpdf/HB04149A.pdf

21

Continued scrutiny of tuition increasesContinued scrutiny of tuition increases Formula Advisory Committee workFormula Advisory Committee work Interim House & Senate committee studiesInterim House & Senate committee studies 2010 Elections & Consequences2010 Elections & Consequences

Continued scrutiny of tuition increasesContinued scrutiny of tuition increases Formula Advisory Committee workFormula Advisory Committee work Interim House & Senate committee studiesInterim House & Senate committee studies 2010 Elections & Consequences2010 Elections & Consequences

22

State economic & budget condition State economic & budget condition Stimulus funds not available Stimulus funds not available ($338M for Higher Ed) ($338M for Higher Ed) For For

UTSA this means: UTSA this means: $3.53M Formula Funding ($1.76M – 1 yr impact)$3.53M Formula Funding ($1.76M – 1 yr impact)$1.87M Higher Ed Incentive Funds$1.87M Higher Ed Incentive Funds$4M SALSI$4M SALSI$0.5M P-16 Council$0.5M P-16 Council

Structural deficit continues to grow Structural deficit continues to grow ($12-15B)($12-15B)

Sales Tax Receipts down double digits Sales Tax Receipts down double digits (-12.8% Sept (-12.8% Sept 09 as compared to Sept 08)09 as compared to Sept 08)

State economic & budget condition State economic & budget condition Stimulus funds not available Stimulus funds not available ($338M for Higher Ed) ($338M for Higher Ed) For For

UTSA this means: UTSA this means: $3.53M Formula Funding ($1.76M – 1 yr impact)$3.53M Formula Funding ($1.76M – 1 yr impact)$1.87M Higher Ed Incentive Funds$1.87M Higher Ed Incentive Funds$4M SALSI$4M SALSI$0.5M P-16 Council$0.5M P-16 Council

Structural deficit continues to grow Structural deficit continues to grow ($12-15B)($12-15B)

Sales Tax Receipts down double digits Sales Tax Receipts down double digits (-12.8% Sept (-12.8% Sept 09 as compared to Sept 08)09 as compared to Sept 08)

23

Rainy Day fundRainy Day fund May have $5B against the projected $12-15B deficit?May have $5B against the projected $12-15B deficit?

Repeat of 2003 or worse?Repeat of 2003 or worse? Some discussion about a mid biennium budget Some discussion about a mid biennium budget

cutcut Expenditure reductions of 10%?Expenditure reductions of 10%? Impacts to Budget PlanningImpacts to Budget Planning

Rainy Day fundRainy Day fund May have $5B against the projected $12-15B deficit?May have $5B against the projected $12-15B deficit?

Repeat of 2003 or worse?Repeat of 2003 or worse? Some discussion about a mid biennium budget Some discussion about a mid biennium budget

cutcut Expenditure reductions of 10%?Expenditure reductions of 10%? Impacts to Budget PlanningImpacts to Budget Planning

24

Higher Education Funding NeedsHigher Education Funding Needs Maintain formula funding Maintain formula funding (backed with ARRA money (backed with ARRA money

in the prior biennium)in the prior biennium) TRBs or some form of capital construction TRBs or some form of capital construction

supportsupport Funding for UT AustinFunding for UT Austin Continuation of National Research University Continuation of National Research University

InitiativeInitiative

Higher Education Funding NeedsHigher Education Funding Needs Maintain formula funding Maintain formula funding (backed with ARRA money (backed with ARRA money

in the prior biennium)in the prior biennium) TRBs or some form of capital construction TRBs or some form of capital construction

supportsupport Funding for UT AustinFunding for UT Austin Continuation of National Research University Continuation of National Research University

InitiativeInitiative

26

The Chancellor, under the direction of the The Chancellor, under the direction of the Board of Regents, is encouraging each Board of Regents, is encouraging each President to redirect resources towards:President to redirect resources towards:High priority mission activitiesStrategic competitive investments; andReserves in preparation for potential future

financial shortfalls

The Chancellor, under the direction of the The Chancellor, under the direction of the Board of Regents, is encouraging each Board of Regents, is encouraging each President to redirect resources towards:President to redirect resources towards:High priority mission activitiesStrategic competitive investments; andReserves in preparation for potential future

financial shortfalls

27

1. Consider Scope and Mission – less effective activities may need to be reduced or eliminated

2. Understand the Rationale – reasons should be soundly developed and communicated widely

3. Transparency – decisions and actions must be clear and communicated widely

4. Examine the entire budget rather than budgeting at the margin

1. Consider Scope and Mission – less effective activities may need to be reduced or eliminated

2. Understand the Rationale – reasons should be soundly developed and communicated widely

3. Transparency – decisions and actions must be clear and communicated widely

4. Examine the entire budget rather than budgeting at the margin

28

5. Focus – separate the budget not available for redistribution; while resources from other areas of the budget may not be redistributed, any subsidies to those activities should be identified and discussed.

6. Prioritization

5. Focus – separate the budget not available for redistribution; while resources from other areas of the budget may not be redistributed, any subsidies to those activities should be identified and discussed.

6. Prioritization

29

7. Revenue – new revenue opportunities are less predictable (and won’t necessarily result in additional discretionary income)

8. Tracking & Measurement9. External Benchmarks10. Flexibility11. Decision Level

7. Revenue – new revenue opportunities are less predictable (and won’t necessarily result in additional discretionary income)

8. Tracking & Measurement9. External Benchmarks10. Flexibility11. Decision Level

30

12. Real v. Theoretical Reallocations – make identification of reallocation strategies reality versus an exercise.

13. Administrative & Academic Overhead – thorough review of non-mission specific activities & expenditures. Targeted reduction in admin OH which do not impede critical mission activities should be identified & communicated.

12. Real v. Theoretical Reallocations – make identification of reallocation strategies reality versus an exercise.

13. Administrative & Academic Overhead – thorough review of non-mission specific activities & expenditures. Targeted reduction in admin OH which do not impede critical mission activities should be identified & communicated.

31

14. Efficiency & Productivity 15. Reallocation Targets – customized to each unit

and not across the board; unit should understand the need and amount required; unit should benefit in some way from the reallocation.

16. Multi-year Plan

14. Efficiency & Productivity 15. Reallocation Targets – customized to each unit

and not across the board; unit should understand the need and amount required; unit should benefit in some way from the reallocation.

16. Multi-year Plan