budget update october 6, 2011
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Budget UpdateBudget UpdateOctober 6, 2011October 6, 2011
FY 2012
FY 2011 FY 2012 *
44,820,178$ 50,449,092$
Fringe Benefits Paid by State 25,948,632 29,022,648
70,768,810$ 79,471,740$
* FY 2012 request reflects the following:
* Impact of 27th Payroll
* FY2012 Bargaining unit (BU) increases
* FY 2011 BU increases not previously covered by the State
* Annualization impact of FY11 new hires
* Fringe Benefits on all of the above
SCSU's STATE APPROPRIATION
State Appropriation
Total
Presented at Town Hall Meeting 10/22/10
FY 2012
STATE APPROPRIATION
Original Requested Change
Governor's March 2011
Recommendation
State Appropriation $ 50,449,092 $ (6,869,586) $ 43,579,506
Fringe Benefits Paid by State 29,022,648 (3,196,467) 25,826,181
Total $ 79,471,740 $ (10,066,053) $ 69,405,687
FY 2012
Steps taken when the FY2012 Spending Plan was developed:
•Reduced full-time positions from 1,023 to 998
•Continued to achieve operational savings from our ongoing cost containment program
•No funding set aside for strategic initiatives
•Tuition and fees were increased by 2.5 percent
FY2012
Despite these actions, the university was still left with a significant budget deficit due to an extra payroll and the growth of non-general fund expenses. The following actions were taken to close the gap for FY2012:
•The University received board approval to use almost $4 million of reserves to cover the general fund portion of the 27th payroll for FY 2012
•As part of the FY2012 budget preparation, each vice president provided budget reduction outlines for their respective areas. To close the remaining gap, divisional budgets were reduced by $4.7 million. This included holding positions vacant, including temporary one-year faculty appointments, custodial and clerical staff, and administrators
•A change in board policy that reduced university CHEFA debt obligations by 20 percent. Several refinance opportunities, along with lower interest rates, saved $1.85 million
FY 2012
STATE APPROPRIATION
Governor's March 2011
Recommendation 8/25/11 Change (*)Sub-Total Based on
8/25/11 Change
State Appropriation $ 43,579,506 $ (3,306,602) $ 40,272,904
Fringe Benefits Paid by State 25,826,181 ( 892,233) 24,933,948
Total $ 69,405,687 $ ( 4,198,835) $ 65,206,852
Once the concession agreement was finalized, Southern was notified on August 25, 2011 that the State appropriation would be reduced by an additional $4,198,835. The concession agreement reduced Southern salary and fringe expense by $2,880,227, leaving a budget gap of $1,318,608. To close the gap, management positions will be held vacant until March 1, 2012 or longer. Additional reductions were required in non-divisional OE.
Note: The 8/25/11 reduction to the Gen’l Fund & FB paid-by-State appropriation is offset by the following expense savings (resulting from employee concessions):
Elimination of BU increases $1,831,808 Reduction in Longevity 208,999
Related Fringe Benefit Reduction 839,420$2,880,227
(*)
FY 2012
STATE APPROPRIATION
Sub-Total Based on 8/25/11 Change 9/7/11 Change
Sub-Total Based on 9/7/11 Change
State Appropriation $ 40,272,904 $ ( 815,556) $ 39,457,348
Fringe Benefits Paid by State 24,933,948 ( 441,934)
24,492,014
Total $ 65,206,852 $ ( 1,257,490) $ 63,949,362
On September 7, 2011, The University received a third notification that the State appropriation would be further reduced by $1,257,490. To close this gap, it will require holding 16 administrative positions vacant until January 1, 2012 and 1 position for the entire year. Additional reductions were also required in non-divisional OE.
FY 2012
FY2012 State Appropriation
Total Amount of Reductions $ 15,522,378
Less: Concessions (2,880,227)
Net Reduction $ 12,642,151
•NOTE: Net Reduction is 15.9% of the Original FY 2012 Spending Plan State Appropriation
12,642,151 / 79,471,740 = 15.9%
*
FY2012
Total State Appropriation Reduction:
FY2009 $ (3,266,263)
FY2010 697,040
FY2011 (318,871)
FY2012 (Net) * (12,642,151)
Total State Appropriation Reductions $ (15,530,245)
Total Fund Balance Reduction: (4,398,959)
TOTAL REDUCTION: $ (19,929,204)
* Note: FY2012 reduction is net of savings from concessions $15,522,378 - 2,880,227 = $12,642,151
FY 2012
NOTE: This Trend is Nationwide
FY 2012
The FY2012 Spending Plan was built on an assumption of a 2% enrollment increase.
We wanted to “grow” our way out of the effect of our budget reductions.
FALL 2011
HEADCOUNT
GOAL vs THIRD WEEK ACTUAL
Goal Actual
Third Week
Variance Favorable /
(Unfavorable)
Full Time Undergraduate Continuing 5,375 5,270 (105) New Freshmen 1,350 1,319 (31) New Transfers 950 935 (15)
7,675 7,524 (151)
Full Time Graduate 1,010 938 (72)
Sub Total Full Time 8,685 8,462 (223)
Part Time Undergraduate 1,308 1,172 (136)
Part Time Graduate 2,210 1,899 (311)
Sub Total Part Time 3,518 3,071 (447)
Grand Total 12,203 11,533 (670)
FY 2012
What was the financial impact of not achieving the FY2012 enrollment goals for the Fall?
FT Undergraduate $ (626,848)
FT Graduate (329,184)
PT Undergraduate (357,245)
PT Graduate (727,316)
Total $ (2,040,593)
Net Operating Fund impact (less financial aid 15%, Debt Services, Activity Fees) is:
$1,787,237
FY 2012
HEADCOUNT Fall 2010 vs Fall 2011
Fall 2010 Fall 2011
Variance Favorable /
(Unfavorable) Full Time Undergraduate
Continuing 5,299 5,270 (29) New Freshmen 1,248 1,319 71 New Transfers 947 935 (12)
7,494 7,524 30
Full Time Graduate 1,000 938 (62)
Sub Total Full Time 8,494 8,462 (32)
Part Time Undergraduate 1,282 1,172 (110)
Part Time Graduate 2,188 1,899 (289)
Sub Total Part Time 3,470 3,071 (399)
Grand Total 11,964 11,533 (431)
FY 2012
What was the financial impact of not achieving last Fall’s enrollment?
FT Undergraduate $ 123,720
FT Graduate (283,464)
PT undergraduate (334,530)
PT Graduate (627,284)
Total $ (1,121,558)
Net Operating Fund impact (less financial aid 15%, Debt Services, Activity Fees) is:
$1,084,439
FY 2012
All-University Student Headcount & FTE & by Year (Fall) Includes Full-Time, Part-Time, Undergraduate & Graduate Students
Source: Semi-Annual Statistical Report
HEADCOUNT
Fall 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Full Time 6,791
7,059
7,161
7,291
7,609
7,780
7,996
8,024
8,111
8,346
8,494
8,462
Part Time 5,336
5,195
5,058
4,852
4,568
4,378
4,330
3,906
3,658
3,469
3,470
3,071
Total Headcount 12,127
12,254
12,219
12,143
12,177
12,158
12,326
11,930
11,769
11,815
11,964
11,533
% change 1.00% -0.30% -0.60% 0.30% -0.20% 1.40% -3.20% -1.30% 0.40% 1.30% -3.60%
FTE
Fall 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Full Time 6,402
6,620
6,770
6,908
7,203
7,377
7,779
7,667
7,773
8,020
8,164
8,161
Part Time 1,933
1,914
1,902
1,851
1,734
1,681
1,652
1,512
1,400
1,324
1,363
1,208
Total FTE 8,335
8,534
8,672
8,759
8,937
9,058
9,431
9,179
9,173
9,344
9,527
9,369
%change 2.40% 1.60% 1.00% 2.00% 1.40% 4.10% -2.70% -0.10% 1.90% 2.00% -1.70%
FY2012
Current Forecast
• Possible additional 5% reduction
$63,949,362 x 5% = $ 3,197,468
• Historically Spring enrollment/revenue is less than Fall
There will be significant revenue shortfalls for:
Intersession
Spring
Spring break
Summer A
FY2012
Current Strategies
•Meeting to develop strategies to increase enrollment:USPaRCUniversity Budget & PlanningEnrollment Management Council
•Continue to hold positions vacant/hiring freeze
•Reduce departmental budgets (OE, Student Labor & UA)
In conclusion:
The current path that Southern is following –
Diminishing state appropriations
Shrinking student enrollments
will not sustain Southern as the University we know today
FY2012
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