BudgetManualUCSantaBarbara

FinanceandResourceManagement

OfficeofBudgetandPlanningMay2017

ThisBudgetManualisasummaryofpolicies,guidelines,andgeneralinformationusedbyUCSantaBarbarainthedevelopmentandongoingadministrationofthecampusbudget,particularlyasitappliestocorefunds.TheManualwasdevelopedtoensurethatpolicies,guidelines,practices,uses,andprograms,bothsystemwideandoncampus,arewellunderstoodandconsistentlyapplied.TheManualsummarizes,byprimaryfundsource,someofthefundamentalagreements,processesandpracticesassociatedwiththeacquisition,use,andallocationofthesefunds.TheManualcomplementsUniversitypolicies,guidelines,andrelateddocuments,includingbutnotlimitedto:

● ThePoliciesandStandingOrdersoftheUniversityofCaliforniaBoardofRegents(availableatregents.universityofcalifornia.edu)

● PresidentialPolicies(availableatpolicy.ucop.edu)

● TheAccountingManual(availableatpolicy.ucop.edu/manuals/accounting-manual.html)

● BusinessandFinanceBulletins(availableathttp://policy.ucop.edu/manuals/business-and-finance-bulletins.html)

● PeriodicguidanceissuedbytheOfficeofthePresidentonrelatedtopics,

includingbutnotlimitedtoguidanceprovidedinannualcampusbudgetallocationletters;and

● Policiesandguidelinesdeveloped,asneeded,bythecampus.

Itshouldberememberedthatthebudgetprocessesarecomplexanddependonannualpriorities,consultation,negotiations,commitments,andagreementsthatageneralizedpresentationofthisnaturecannotfullydescribe.QuestionsabouttheManualshouldbedirectedtotheUCSantaBarbaraOfficeofBudgetandPlanning.

TableofContentsChapter Topic Page

1 BudgetPlanDevelopment 1

2 BudgetOverview 5

3 CostDrivers 8

4 RevenueChanges&Projections 12

5 UCSantaBarbaraAllocationFramework 14

6 UCOPAllocationProcess 16

7 StateGeneralFunds 23

8 UCGeneralFunds 25

9 StudentFees 26

10 IndirectCostRecovery 31

11 CampusAssessmentsandTaxes 37

12 GiftsandEndowments 44

13 InterestonInvestments 47

14 IncomeandRecharge 48

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Appendix

FinancialAid 52

1 CommonCampusBudgetandFinancialTerms 56

2 FunctionDescriptions 61

3 FundSourceInformation 64

4 Sub-AccountDescriptions 67

5 SalaryandBenefitRelatedTerms 68

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Chapter1BudgetPlanDevelopment-ContextfortheFuture

UCSantaBarbaraisalargeandcomplexorganizationwithannualexpensesexceeding$1billion.Theexpensesarefundedfrommanydifferentsources(state,studentfees,federalgrants,etc.)andover4,400differentfundswithmorethan22,000account-fundcombinations.Almostone-thirdoftheannualexpensesarefundedfrom“non-budgeted”or“extramuralfunds”meaningthattheyarenotincludedinthecampuspermanentbudget.Mostofthesefundsarerestrictedandsupportresearch,financialaid,ordonordirectedprojectsandprograms.Theremainingtwo-thirdsare“budgetedfunds”andthefocusofthisdocument.Thesearefundsthatareexpectedtocontinuefromyeartoyear,supportingtheongoingactivitiesofthecampus.Foreachfundingsourcethereareagreementsandpracticesassociatedwiththeacquisition,distributionanduseofthefunds.Somearecodifiedintolaw,othersrepresentagreementsthathavebeenmadeandmodifiedovertime,andothersareguidedbyUniversitypolicy.AllagreementscarryanobligationtomakegoodonthetrustplacedintheUniversityandtocarryoutcertainagreed-uponactivitiesforthepublicgood.Forexample,eventhoughtheUniversityhasconstitutionalautonomy,givingitflexibilityinthewaysitcanuseStatefundstosupportitsprograms,theUniversityneedstosustainitscredibilitywiththosewhoallocateStatemoniestoUC,andmustthereforeliveuptoagreementsmadeduringbudgetnegotiationsandbeaccountablebothfortheproperuseoffundsandforexpectedoutcomes.StrategicAcademicPlanIn2007theSantaBarbaracampuspublishedtheStrategicAcademicPlantoupdateitsvisionfortheacademicprogramandguidecampustrajectoryforthecomingdecades.TheStrategicAcademicPlanfocusedonresourceallocationandmanagedgrowth.Inparticular,theplanidentifiedthefollowingtwoprinciplestoguidethecampusdirectionforward:

� Aframeworkforresourceallocationthatincludesdecisionmakingstrategiesaround:o BalancedCommitmentsandSelectedInvestmentso BuildingOutstandingDepartmentso ProfessionalSchoolso Diversityo InterdisciplinaryThemeso CriteriaforThoughtfulChoices

� Amanagedenrollmentgrowthplantoassureoptimumacademicandintellectualdimensionsoftheuniversity.Theplanidentifiesafutureenrollmentof25,000on-campusstudentsduringthetraditionalacademicyear(fall,winter,andspringquarters).Theplanoutlinesgrowthgoalswithconsiderationofboththestate/communitycontextandtheacademiccontext

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o Themanagedgrowthplanidentifiedgoalsforfacultygrowthandrenewalo Staffgrowthandrenewalo Housingforfaculty,staff,andstudentso Studentsupporttoincreasegraduateenrollmentto17%oftotalenrollmento Minimizeimpactoncommunityresourceswithmodest(1%)annualenrollment

growtho ResourcemanagementbymeansofanewLongRangeDevelopmentPlan

LongRangeDevelopmentPlanFollowingthepublicationoftheStrategicAcademicPlan,the2010LongRangeDevelopmentPlan(LRDP)wasdevelopedtoprovidethephysicalplanningparameterstomeetthegoalsputforwardintheStrategicAcademicPlan.KeyelementsoftheLRDPincludethefollowing:

� Anenrollmentgrowthtargetofanadditional5,000studentsbytheyear2025equatingtoatotalenrollmentof25,000

� Identificationofcampusbuildingsitesproviding1.8MnewASFcapacityforInstruction,Research,andSupportSpace

� 5,000newstudenthousingbedspaces� 1,874additionalfacultyandstaffhousingunits� 5-8acresofadditionalrecreationspace� 3,650additionalparkingspacesresultinginatotalparkingcapacityof14,230spaces

2010UniversityofCalifornia,SantaBarbaraLongRangeDevelopmentPlanMitigationImplementationandSettlementAgreement.AsaresultoftheLRDPplanningprocess,thecampusidentifiedagoaltoprovidehousingto50%oftheplannedenrollment.SubsequentnegotiationsbetweentheUniversityandtheCountyofSantaBarbaraandtheCityofGoletaresultedinthe2010UniversityofCalifornia,SantaBarbaraLongRangeDevelopmentPlanMitigationImplementationandSettlementAgreement.Theagreementidentifiedcampusgrowth-relatedcommitmentstothecommunityintheareasofEnrollmentManagement,Housing,TrafficImpacts,andPublicSafetyImpacts.

� Mostnotably,theagreementstipulatesincreasedinventoryofstudenthousingindirectconnectionwithenrollmentgrowth.AstheAgreementfurthermandatesthatnewhousingcanonlybeprovidedthroughconstructionofnewstudenthousingonUniversityland,the“capital”optionistheonlypossibleoptiontoconsider.Thecampuscannotsolvetheproblemthroughleaseorpurchaseofoff-sitehousing.Thus,constructionofnewstudenthousingoncampuslandisnecessarytomeetcurrentenrollmentlevelsandtoaddressplannednewgrowth.

UniversityofCaliforniaSantaBarbaraCoordinatingCommitteeonBudgetStrategy(CCBS)

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TheCCBSisanadvisorycommitteetotheChancelloronbudgetissuesandwasoriginallyestablishedinFebruary2004.ItwasreactivatedinMarch2008inresponsetoanotherroundofstatebudgetcutsandnowcontinuesasanongoingadvisorycommittee.Membership(21)includessenioradministrators(5),academicsenate(3),faculty(4),deans(3),students(3),andstaff(3).TheCoordinatingCommitteeonBudgetStrategy(CCBS)guidesthecampusbudgetplanningprocess.Thechargeofthecommitteeisto“developstrategiestoprotectacademicquality,aswellasstudentaccess,thatwehavestrivedsohardtoachieve”.ThegeneralresponsibilitiesoftheCCBSareasfollows:

� Helpguidethecampusbudgetplanningprocess� Insureanopenandinformativeprocesstoshareinformationrelevanttothebudget

processandprovideopportunityforfeedback� Developprinciplesandguidelinestohelpfacethechallengeofbudgetreductionsin

theneartermandtoaccomplishfiscalstabilityinthelongterm� Reviewandanalyzefundingoptionsforcampusimplementation� Recommendannualfundingplanbasedonavailablerevenuesandcampuspriorities

Examplesofrecommendationsthathavebeenimplementedand/orapproved:

� Budgetplanningprinciplesusedtoguidethebudgetdevelopmentprocess� Budgetreductiontargetsbycontrolpoint(highertargetsforadministrativeunits

andmuchlowertargetsforinstructionalunits)� Increasesinassessmentstonon-statefundedunitstogenerateadditionalfundsto

helpoffsetcutstocorefundedunits–NSFAS,ICRrate,gifttax� Annualfundingplanbasedonavailableresourcesandcampusprogramneeds� Frameworkfordistributionofnewresources� ImplementationofTechnologyInfrastructureFee(TIF)tohelpfundincreased

ongoinginvestmentintechnology� Distributionmethodologytoensurethatallcampusunitsparticipateinthe

fundingoftheUCOPsupportassessment

BudgetPlanningPrinciples

ThefollowingplanningprincipleswereusedasgeneralstatementstohelpguidetheUCSBcampusthroughthebudgetplanningprocessassociatedwiththemanyyearsofreductionsinStatefunding:

(I)StrategicSolutions-Budgetreductionsshouldbeimplementedstrategically,notacrossthe

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board,inamannerthatwillmaintainthefocusonthecampusacademicmission.

(2) Priorities-Thecampusshouldmakechangestothebudgettoreflectpriorities,onboththespendingandrevenueside.Thecampusshouldattempttodeterminewhichprogramsaremostimportantandstrivetominimizethebudget'simpactonhigherpriorityprogramsandservices.

(3) RevenueConsiderations-Decisionsaboutcostreductionsneedtoconsidertheimpactonrevenuegeneration,aswellaslong-termcapitalandoperatingcostimpacts.

(4) RecruitmentandRetention-Duringatimeofcontraction,budgetreductionstrategiesshouldstrivetoachieveadiverseandhighqualitystudentbodycommensuratewithstatefunding,andtoretainadiverseandhighqualityfacultyandstaffworkforcecommensuratewiththesizeofthestudentbody.

(5) StrategicInvestments-Ataminimum,strategicinvestmentswillcontinuetobemade.Theseinvestmentsmayrequireslightlylargerbudgetcutsinotherareas,butarenecessarytorespondtoclear,existingneedsandtostrategicallypositionthecampusforthefuture.

(6) Efficiencies-Currentprocessesandproceduresshouldbestreamlinedtoeliminateanyduplicatedorunnecessaryservicestohelpreduceexpendituresandmitigatestaffworkloadimpacts.

(7) StaffingLayoffs-Everyeffortshouldbemadetominimizelayoffsbytakingadvantageofnormalattrition,plannedretirements,andvoluntaryreductions.

(8) Self-SupportingDepartments-Rechargeunitsarenotexemptfromthebudgetreductionprocess.Onlyinverylimitedandexceptionalcircumstancesshouldrateincreasesbeapproved.Inaddition,rechargeunitsmaybeaskedtoimplementratereductionsthatarecomparabletothereductionsthatmayberequiredofstateandorstudentfeefundedactivities.

ThePlanningPrinciplesarecontinuallyunderreviewandaremodifiedperiodicallytoprovidegeneralguidanceasthefundingenvironmentchanges.

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Chapter2BudgetOverview–TheBigBudgetPicture

Thissectionprovidesinoutlineformanoverviewofthekeybudgetconceptsandplanningparametersusedduringthedevelopmentofthecampusbudget.

1) Revenuea. PrimarycorerevenuesourcesareStateFunds,UCGeneralFunds,andMandatory

StudentFees(tuitionandstudentservicesfee)b. UCRegentssetthefeelevelfortuition,studentservices,andsupplementnon-resident

tuition.c. StatefundsfortheUniversityofCaliforniaareapprovedaspartoftheStatebudget

process.d. TheUCOfficeofthePresidentmakesallocationsofstatefundstoeachcampus.

AllocationsprimarilytakeintoaccountfundingformulasagreedonaspartoftherebenchingprocessfirstimplementedinFY2012-13.Inaddition,theUCPresidentdoesmakesomedirectallocationstoanindividualcampusforspecificprograms.

2) Enrollment

a. Muchofcampusbudgetplanningisdrivenbyenrollmentb. Enrollmenttoincreaseto25,000perLRDPoverthenextdecade(plusorminus)c. FuturePlanningDecisions:

i. AnnualEnrollmentGrowthii. DistributionofGrowth

1. UndergraduateResidents2. UndergraduateNon-Residents3. GraduateResidents4. GraduateNon-Residents5. GraduateProfessionals

iii. Decisionsimpactfuturefeerevenueandexpenditureprojectionsiv. Decisionsimpactfuturestateenrollmentgrowthfunding

3) FacultyFTE

a. Drivenbyenrollmentgrowth.b. 1newfacultyFTEperincreaseof18.7students(FTE)c. Budgetplanningprocessidentifiesthenumberofnewpositionsandthefundingfor

salaryandbenefitsthatwillneedtobeset-aside.d. Budgetplanningprocessdoesnotidentifyhowthepositionswillbeallocated.The

allocationofthepositionsishandledthroughtheEVC’sOffice.e. ForFY2015-16,2016-17,and2017-18atleast25newfacultyFTEpositionswillbe

allocatedduringeachyear.Thisdoesnotincludethosepositionstobefilledduetoretirements,etc.

4) TeachingAssistantPositions

a. Drivenbyenrollmentgrowthb. 1newT.A.perincreaseof44.0undergraduatestudents.

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c. Budgetplanningprocessidentifiesthenumberofnewpositionsandthenecessaryfundingforsalaryandbenefitsthatwillneedtobeset-aside.

d. Budgetplanningprocessdoesnotidentifyhowthepositionswillbedistributed.TheallocationofpositionsishandledthroughtheEVC’sOffice.

5) FinancialAid

a. Drivenbyenrollmentandsubsequentrevenueestimates.b. Perpolicy33%ofnetnewtuitionandstudentservicefeeincreasegoesto

undergraduatestudentfinancialaid.Thisamountstoapproximately28.2%ofthetotalfeerevenuegeneratedbyundergraduatefees.

c. Perpolicy50%ofnetnewtuitionandstudentservicefeeincreasegoestograduatestudentfinancialaid.Thisamountstoapproximately48%ofthetotalfeerevenuegeneratedbygraduatefees.

d. Perpolicy33%ofprofessionalschoolfees(PDST)goestowardsfinancialaidforgraduateprofessionalstudents.Itistheresponsibilityofthespecificprogramtoset-asidethisamountanddistributethefundstothestudents.

6) OperationsandMaintenanceofPlantAssociatedwithNewSpace

a. Asnewspaceisaddedfundingisprovidedpermaintainedgrosssquarefoottofundutilitiesandmaintenanceassociatedwiththenewspace.Thisisbasedonahistoricalstateallocationformulafornewspace.TheactualamountperMGSFtobefundedisadjustedannuallybythecampusbudgetoffice.

b. FundingisprovidedtoFacilityManagementasanaugmentationtotheiroverallbudgetandisnotrestrictedtouseonaspecificbuilding.

c. Fundingprovidedforutilitiesisrestrictedtoutilityusage.Shouldtherebeasurplusatyear-endthefundingcanbeusedforapprovedenergyrelatedprojects.Theuseofthesefundsmustbeapprovedbythecampusbudgetofficebeforefundsarecommittedandspent.

7) SalaryandBenefitCostIncreases

a. SalariesandBenefitCostIncreasesareprimarilytheresultoftheprogramsapprovedbytheRegentsand/ortheOfficeofthePresidentandimplementedatthecampus.Examplesinclude:

i. FacultySalaryProgramii. NegotiationswithRepresentedEmployeesiii. Salaryprogramfornon-representedemployeesiv. Benefits(retirement,medical,etc.)

8) Other

a. Approximately75to80%ofnewrevenuesarenormallyrequiredtocovertheincreasedcostsoftheitemspreviouslylisted.Theallocationofanyremainingfundsisbasedoncampusdecisionsonitemssuchas:

i. Facultyrecruitmentandretentionii. Graduatestudentsupportiii. Deferredmaintenanceiv. Staffsupportv. Equipmentreplacementvi. Classroomrenovationandrenewal

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vii. Costincreases(Utilities,Libraryperiodicals)viii. Identifiedworkloadneeds

b. Thisistheareaofthebudgetdevelopmentprocessthattypicallyrequiresthemostdiscussion,review,andconsultation.

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Chapter3CostDrivers

AmongtheresponsibilitiesoftheUCSantaBarbaraOfficeofBudgetandPlanningisthedevelopmentoftheannualBudgetPlanforcore-fundedactivities.TheBudgetPlanisdevelopedinconsultationwiththeCoordinatingCommitteeonBudgetStrategy(CCBS)andisinalignmentwiththecampusprioritiesfortheupcomingfiscalyearandinfullconsiderationofanticipatedcostdrivers,operationalefficiencies,andrevenuesources.Aftercampusconsultation,review,andapprovaltheBudgetPlanisimplementedandfundingistransferredtocampuscontrolpointsanddepartmentsforthoseprojects/programsidentifiedintheplan.PrimarycostdriversincludedintheBudgetPlanare:

I. EnrollmentChanges-TheBudgetPlanreflectsanticipatedchangesincampusenrollmentplansforundergraduateandgraduateresidentandnon-residentstudents,aswellastheanticipatedchangesincosts(instruction,studentservices,financialaid,etc.).

II. MandatoryCostIncreases-Annuallythecampusfacesavarietyof

mandatorycost increasesthatneedtobereflectedintheBudgetPlan.Theseinclude,butarenotlimitedto,thefollowing:

A. Contractuallycommittedcompensationincreases-Collective

bargainingagreementsbetweentheUniversityandlaborunionsincludestipulatedannualcompensationincreasesforcoveredemployees.Theincreasesvarybycollectivebargainingagreementandbyemployeeclassification.TheBudgetPlanincludesanestimateoftheaggregatecampusimpactoftheseincreasesforthefiscalyear.

B. UCRPEmployerContributions-TheUniversityofCaliforniaRetirement

Plan(UCRP)providespensionbenefitstoeligibleretireesandsurvivors.UnliketheCaliforniaStateUniversity,theCaliforniaCommunityColleges,oreveryotherStateagency,theUniversityofCaliforniacurrentlyreceivesnoregularannualStateGeneralFundappropriationtocoverincreasesinemployercontributionstoitsretirementplan;provisionstocoverthoseincreasesmustbecoveredfromtheUniversity’soperatingbudget.

EffectiveJuly1,2014,theUniversity’semployercontributiontoUCRP

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is14%ofcoveredpayroll.Consequently,anyprojectedincreaseincore-fundedcoveredpayrollexpendituresshouldbeexpectedtogenerateanadditional14%inmandatoryemployercontributionstoUCRP,whichmustbeacknowledgedintheBudgetPlan.TheimpactofbenefitplanchangesshouldbetakenintoaccountiftheyareexpectedtoaffecttherequiredemployercontributionduringtheBudgetPlanyear.

C. EmployeeHealthBenefits-TheBudgetPlantakesintoaccountthe

mostrecentavailableprojectionsregardingincreasesinUniversityofCaliforniaemployeehealthbenefitexpenditures.TheBudgetPlanreflectstheprojectedimpactofanymeasurestakenbytheUniversitytocontrolthegrowthinhealthbenefitexpendituresalongwithfactorsthatcontributeto costincreases(e.g.,changesinthecoverageprovidedbytheUniversity’splansorgeneralmarket-drivenchangesinthecostofhealthcare).

D. Retiree(Annuitant)Benefits(OPEB)-Morethan50,000Universityof

Californiaretireesandbeneficiariesareeligibletoreceive,orarereceiving,healthbenefitsthataresubsidizedbytheUniversity.AccumulatedfutureretireehealthbenefitcostsforUniversityretireesarenotprefunded.Asaresult,annualexpendituresforretireehealthbenefitsareaccountedforintheUniversity’sBudgetPlanjustastheyareforactiveemployees,andsimilarfactorsareusedtoestimateyear-to-yearchangesinthosecosts.

E. FacultyMeritProgram-TheFacultyMeritProgramisamerit-based

programoffacultysalaryadjustmentsdesignedtoretainthemosttalentedandproductivefacultymembers.Theprogramhasarigorouspeerreviewprocessbeforeameritsalaryincreaseisawardedandreinforcesapay-for-performancephilosophybyprovidingarewardmechanismtorecognizeexpansionofbothteachingandresearchskills.

AttheUniversityofCalifornia–asatanymajorresearchuniversity–maintainingafacultymeritprogramisamandatorycost.Moreover,sincefacultyareeligibleforreviewundertheprogramonlyonceeverythreeyears,temporarilyinterruptingtheprograminagivenyearwouldlevyanunduepenaltyonthecohortupforreviewthatyear.(Indeed,theUniversitylosttwoclass-actionlawsuitsin1994thatwerefiledonbehalfoffacultymemberswhodidnotreceive1991-92meritincreasesduetobudget constraintsthatyear.)

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F. Non-salarypriceincreases-Tomaintainthequalityoftheinstructionalprogramandallsupportactivities,theUniversitymustregularlyreplace,upgrade,orpurchasenewinstructionalequipment,librarymaterials,andothernon-salaryitems.TheUniversitymustalsopurchaseutilities,insurance,andothergoodsandservicesnecessarytosustainitsoperations.

III. High-PriorityCosts-Inadditiontochangesinmandatorycosts,the

BudgetPlanshouldacknowledgeotheranticipatedcostchangesfortheupcomingfiscalyear. Theseincludebutarenotlimitedtothefollowing:

A. Compensationforfacultyandnon-representedstaff-Toensurethat

theUniversityisabletorecruitandretainfacultyandstaff,theUniversitymustregularlyevaluatetheneedforappropriateandpredictablecompensationincreases.EstimatedincreasesincompensationexpendituresincludedintheBudgetplantakeintoconsideration,ataminimum,thefollowingfactors:

1. Anticipatedchangesinthenumberoffacultyandstaffemployees;

2. Inflationarypressures(i.e.,changesinthecostofliving)that,

ifleftunaddressed,woulderodethepurchasingpowerofemployees’earnings;

3. Themostrecentavailablesurveydataregardinghow

compensationforUniversityfacultyandstaffcomparewiththatofotheremployersintherelevantlabormarket(s);and

4. Anyprojectedchangeintherequiredemployee

contributiontoUCRP,whichaffectsanemployee’snetpay.

B. DeferredMaintenance-TheBudgetPlanincludesfundingtohelp

addresstheUniversity’sdeferredmaintenancebacklog,whichhasgrownastheelectrical,heatingandventilation,elevator,plumbing,otherbuildingsystems,andcampusinfrastructurereachandsurpasstheirusefullife.

C. DebtService-UnderaprocessestablishedwiththeState,beginningin

2013-14,aportionoftheUniversity’sStatefundingcanbeusedtofundorfinanceState-eligiblecapitalprojects.TheUniversity’sannual

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BudgetforStateCapitalImprovementsincludesfundingforthepreliminaryplans,workingdrawings,construction,and/orequipmentassociatedwithmajorcapitalprojects.TheBudgetPlanincludesreasonableestimatesofanycostincreasesrelatedtodebtserviceforapprovedandcompletedprojectsthatareexpectedtocomeon-lineduringthebudgetyear.

IV. SystemwideInitiatives-TheBudgetPlanmayalsoacknowledgesignificant

neworongoingsystemwideinitiativesandtheirassociatedcosts.TheinitiativesshouldbealignedwithstrategicsystemwideprioritiesthatareestablishedbythePresidentandapprovedbytheRegents.Examplesfrompastbudgetsinclude:

A. Effortstoimproveacademicqualitythroughoutthesystem

(e.g.,byimprovingthesystemwidestudent-facultyratio);

B. Improvinggraduatestudentsupport;and

C. Providingenhancedstudentmentalhealthservices.

V. StudentFinancialAid-TheUniversityofCaliforniaFinancialAidPolicy,establishedbytheRegents,describesthegoalsoftheUniversity’sfinancialaidprogramsforundergraduatestudents,graduateacademicstudents,andgraduatestudentsinprofessionaldegreeprograms.TheBudgetPlanincludesfundingfortheUniversity’saidprogramsthatisconsistentwiththosegoals.Formoreinformation,seeChapter15,FinancialAidFundingandAllocations.

VI. OperationalEfficienciesandAssociatedImpactontheBudgetPlan

A. TheBudgetPlanmayinclude,asanoffsettoexpenses,anyestimated

savingsfromsystemwideorcampusinitiativesintendedtoreducecostsand/orincreaseefficiency.

B. SavingsareincorporatedintotheBudgetPlanaseither:

1. Distinctlineitems(e.g.,anexpecteddollaramount

associatedwithoneormorecost-savingsinitiatives),or

2. Areductioninthecostincreasesthatwouldhaveotherwisebeenappliedtoaparticularexpensecategory(e.g.,byassumingslowergrowthinnon-salariesexpensesorstaffgrowththanwouldhaveotherwiseoccurred).

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Chapter4RevenueChanges&Projections

IncludedintheBudgetPlanarerevenueestimatesshowingincreasesordecreasesassociatedwiththeprimaryoperatingbudgetfundingsources.Thesesourcesareasfollows:

1) StateFunds

a. TheBudgetPlanshouldincludeaprojectedlevelofStatefundingforthebudgetyear.

b. ProjectedincreasestothecampusbudgetarebasedontheNovember

Regents’budgetproposalthenadjustedbasedontheGovernor’sJanuaryBudgetPlan,andthenonceagainaftertheMayrevise.AdjustmentstothecampusplanarealsomadeduringthespringofeachyearastheStatepoliticalprocessunfoldsandadditionalbudgetinformationbecomesknown.Theprocessisreflectedinchangestobothongoingandone-timefunding.

c. StateSpecialFunds–InadditiontoStateGeneralFundsupportthecampus

receivesfundingfromtheCaliforniaStateLotteryEducationFund,whichisusedtosupporteducationalactivitiessuchastheinstructionaluseofcomputingprogram.Otherearmarked(restricted)statesupportcomestotheUniversitythroughtheannualStateBudgetActappropriationsforspecificprograms.

2) StudentFees

a. StudentTuitionandFees-TheCampusBudgetPlanincludesmaterial

changesinstudenttuitionandfeerevenueassociatedwith(a)anyplannedenrollmentgrowthand(b)anyproposedchangetothosetuitionandfeelevels.

b. Increasestomandatorysystemwidecharges(TuitionandtheStudent

ServicesFee)andProfessionalDegreeSupplementalTuition(PDST)shouldbeaccompaniedbyadditionalfundingforstudentfinancialaidconsistentwiththeRegentalpolicy.(SeeChapter5,FinancialAidFundingandAllocations.)

3) AdditionalRevenueSources

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a. NonresidentSupplementalTuition-TheBudgetPlanshouldreflectNonresidentSupplementalTuition(NRST)revenueresultingfromanyanticipatedchangeinnonresidentstudentenrollmentreflectedintheBudgetPlan,alongwithanyproposedchangetoNRSTfees.

b. Indirectcostrecovery-TheBudgetPlanshouldreflectanticipatedchanges

toindirectcostrecovery(ICR)revenuebaseduponprojectedchangesinthevolumeoftheUniversity’sresearch-relatedactivitiesand/orchangesintheICRrateassessedonextramuralresearchgrants.

c. Philanthropy-TheBudgetPlanmayincludeanticipatedchangesin

philanthropicgivingtotheUniversitythatmaybeusedtofundcoreoperations.Tobeincludedintheplan,giftsmusteitherbeunrestrictedorhavetermsthatpermittheuseofsuchfundsforcoreoperations.

d. Assetmanagement-Newlyavailablepermanentorone-timefunds,ifany,

resultingfromimprovedassetmanagementstrategies(e.g.,improvedliquiditymanagementthatresultsinahigherexpectedfuturereturnontheUniversity’scurrentbalances)maybeincludedinthePlan.

e. Otherfunds-Significantprojectedchangesinotherrevenuesourcesamong

theUniversity’scorefundsshouldbeincludedintheBudgetPlan.One-timefundingshouldbeassociatedwithone-timeexpendituresintheBudgetPlan;permanentfundingshouldbeassociatedwithpermanentexpenditures.

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Chapter5UCSantaBarbaraAllocationFramework

TheUCSBCoordinatingCommitteeonBudgetStrategy(CCBS)hasidentifiedthefollowingcategoriesinordertohelpguidethediscussionsonallocationofnewcoreresources:

1) RequiredCostIncreases–ImplementationofSystem-wideProgramsincluding:a. SalaryChangesb. BenefitCostIncreases(Retirement,Health,etc.)c. UCOPAssessment

2) FormulaAllocationsbasedonEnrollmentGrowth

a. IncreaseinFacultyFTE–1facultyFTEper18.7studentFTEincreaseb. IncreaseinTeachingAssistantFTE–1T.A.FTEper44undergraduatestudentFTE

increasec. IncreaseinOMPforNewSpace–NewincreaseinMaintainedGrossSquareFeet

ofStateeligiblespaced. LongRangeDevelopmentPlan(publicsafety,traffic,etc.)–permitigation

agreementse. FinancialAid–set-asidesperUCpolicy

3) FundingforOngoingCommitments–examplesnotinpriorityorder

a. FacultyRecruitmentb. GraduateStudentSupportc. ResearchSupportd. DeferredMaintenancee. Sustainability

4) WorkloadandCostIncreases

a. PurchasedUtilitiesb. CommonGoodFee(TechnologyInfrastructureFee)c. EnrollmentDriven(OISS,Admissions,etc.)d. AdministrativeSupport(ComplianceandProcessDriven)e. ChangingStudentPopulation(non-residentvs.residentstudents,graduate

studentsvs.undergraduatestudents)

5) ProgramImprovementsa. Technology(Infrastructure,Equipment,&Development)b. DeferredMaintenance

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c. ClassroomRenovationd. EquipmentReplacement

6) Other

a. DepartmentSupportBudgetsb. StaffingImprovementsc. CapitalProgram(NewSpace,MajorRenovation,LifeSafety,etc.)d. DebtCapacity

Theabovelistisessentiallyanallocationhierarchywhichguidesthebudgetdevelopmentprocessandresultsintheidentificationofamountsneededtobeset-asidefor“required”allocations(categories1to3)andhelpsidentifythefundingavailableinanyoneyearforthosemorediscretionaryallocations(categories4to6).

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Chapter6UCOPAllocationProcess

DistributionofStateGeneralFundsBeginningin2008,theUniversityofCaliforniaOfficeofthePresidentinitiatedacomprehensivereviewofhowtheUniversitybudgetsandallocatesitsvariousfundsources.Aspartofthatinitiative,theUniversityexaminedtherationalefordistributingStateGeneralFundsanddevelopedastrategyforreadjustingthosedistributionsinordertoaddressdisparitiesamongcampusesinfundingperstudent.TheUniversitybeganimplementingthisnewstrategy–commonlyreferredtoas“Rebenching”–in2012-13withthegoalofachievingequivalentper-studentfundingfromeligibleStateGeneralFundswithinsixyears(i.e.,by2017-18orsoonerifpossible).PertheOfficeofthePresidentthegoalwasachievedwiththeFY2016-17allocations.TheUniversity’sstrategyforallocatingeligibleStateGeneralFundsisbuiltaroundthefollowingfourcoreprinciples:I. UnrestrictedStateGeneralFundsprovidedtotheUniversityshouldbe

allocatedtothecampusesforthepurposeoffurtheringtheUniversity’scoremissionsbasedonthenumbersandtypesofstudentstheyenroll.

II. UChasacommonstandardofexcellenceacrossitscampuses.TheStatesubsidy

perstudentshouldnotdependonthecampusthatastudentattends.Consistentwiththisprinciple,theamountofStateGeneralFundsperstudentallocatedtoacampusshouldbethesameforeachtypeofstudentacrossallofthecampuses.

III. RatherthanreduceStatefundingprovidedtoanycampus,rebenching shouldbe

implementedinawaythatseekstobringallcampusesuptothethen-currenthighestlevelofper-studentfunding.AportionofnewStateGeneralFundsreceivedbytheUniversityeachyearwillbeallocatedtoachievethisgoalby2017-18orsoonerifpossible.

IV. GraduateeducationisanintegralpartofUC'smissionandexcellenceandmust

berecognizedinanyallocationmodel.UCOPAllocationofStateGeneralFundsUnderrebenching,withtheexceptionoftheMercedandSanFrancisco,eachcampus’s

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permanentbasebudgetofStateGeneralFundswillreflectacombinationofatleasttwocomponents:

A. Fundstoenablecampusestosupportspecifiedprogramsorinitiativesand tocoveracommonleveloffixedcostsateachcampus(“set-asides”).Set-asidesrepresentthoseelementsofacampus’sStateGeneralFundallocationthatareintendedfor,orrestrictedto,specificpurposes,eitherbyStatelaworUniversitypolicy.ExamplesincludeStudentFinancialAid,andStudentAcademicPreparationandEducationalPartnership(SAPEP).Inaddition,the$15millionallocatedtoeachcampustoaddressfixedcoststhatareindependentofacampus’senrollmentlevelisincludedinthiscategory.

B. FundsallocatedtoachieveandtomaintainacommonlevelofStateGeneral

Fundsupportateachcampus,baseduponacampus’sweightedenrollmentforallocationpurposesasdescribedbelowinSectionD.

C. DuetotheuniqueneedsoftheMercedandtheSanFranciscocampuses,

permanentStateGeneralFundsallocatedtothesecampuseswillbedeterminedoutsideofthemethodologyusedtoallocatefundstotheothercampuses.

D. AnnualallocationsofnewStateGeneralFundsgenerallyreflect:

1. AnyportionofincrementalpermanentStateGeneralFundsthat

aredesignatedintheBudgetActtoaugmentsupportforaparticularprogramorprogramsatacampusorcampuses;

2. Costadjustments,asappropriate,foridentifiedset-asidesateach

campus;and

3. AtcampusesotherthanMercedandSanFrancisco,fundsintendedtoeliminate,overtime,campusdiscrepanciesinStatefundingperstudent(“rebenchingannualincrements”),and

4. Fundsintendedtoraiseeachcampus’sStatefundingperstudent

byanequivalentamountacrossthesystem(“per-studentdistributionfunds”),whereacampus’sfundingperstudentisbaseduponitsweightedenrollmentforallocationpurposesasdescribedinG.1below.

E. Anyportion ofincrementalpermanentStateGeneralFundsthatis

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designatedinstatuteforaparticularprogram(orprograms)shouldbeallocatedtothecampusresponsiblefortheoperationoftheprogram(s).ThesefundsaregenerallydesignatedintheStateBudgetAct.

F. Fundingforcostadjustmentstoset-asidesthataredeemedeligiblefor

annualcostadjustmentsshouldbeallocatedtothecampus(es)responsibleforthoseset-asides.

1. Ingeneral,costadjustmentsareproportionatetothesystemwide

increaseinpermanentStateGeneralFundsappropriationsfromtheprioryear.

2. AportionofincrementalStateGeneralFundsshouldbeusedto

narrowidentifiedgapsinStateGeneralFundsupportperstudentoneachcampus.ThefundingallocatedinagivenyearforthispurposeshouldbesufficienttoallowtheUniversitytomeetitsgoalofachievingequalper-studentfundingacrosscampusesby2017-18(orsooner)baseduponeachcampus’sweightedenrollmentforallocations(WEFA).

3. IncreasesinpermanentStateGeneralFundsnotcommittedtoother

purposesshouldbedistributedtocampusesindirectproportiontoeachcampus’sshareofthesystemwideWEFA.

4. ThePresidentmayallocateanyportionofnewStateGeneralFunds

tocampusesasneededtoaddressidentifiedfundingneedsand/ortoaddressadditionalgoalsbeyondthosedescribedabove.

G. Allocationofone-timeStateGeneralFundstocampuses

1. StateGeneralFundsprovidedonaone-timebasisshouldbe

allocatedtocampusesinamannerthatisgenerallyalignedwiththeintendeduseofthosefunds.Forexample,indeterminingcampusallocationsoffundsdesignatedfordeferredmaintenance,factorsthatmightbeconsideredincludesquarefootage,currentreplacementvalue,mixofsupportinginfrastructure,andpercentageofcampusspacethatisstatefunded.

2. Incaseswhereunrestrictedone-timefundingisprovided,

allocationsmaybebasedontherebenchingmethodologyoronanalternativemethodologythatisalignedwithobjectives

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identifiedbythePresident.

H. OtheradjustmentstocampusbasebudgetsofStateGeneralFunds

1. AllocationsmayincludeotheradjustmentstocampusbasebudgetsofStateGeneralFundstoachievesystemwidegoals.Examplesincludebutarenotlimitedto:

a. AdjustmentstotheStateGeneralFundportionofthe

UniversityStudentAidProgram;and

b. AdjustmentsneededtoachieveappropriatecampusfundinglevelsforprogramssuchastheFacultyHiringIncentiveProgramorothernewand/orongoingPresidentialinitiatives.

I. Calculationofenrollmentforallocationpurposes

a. Inconsultationwithcampuses,theOfficeofthePresident

willestablishenrollmentlevelsforState-supportedprogramsateachcampusforpurposesofallocatingStatefunds.UndergraduatestudentssubjecttoNonresidentSupplementalTuitionareexcludedfromtheseenrollmentlevels.

2. Thecalculationofper-studentfundingisbasedoncampuses’

weightedenrollmentforallocationpurposes(WEFA)ofstudentsinState-supportedprograms.Theassignedweightsbystudentlevelsareasfollows:

a. Undergraduate,postbaccalaureate,graduate

professional,andgraduateacademicmaster'sstudentsareweightedat1.

b. Academicdoctoralstudentsareweightedat2.5.

c. Healthsciencestudentsareweightedat5(withthe

exceptionofundergraduatesandgraduateacademicstudents,whoareweighted at1and2.5,respectively).

3. Iftheenrollmentlevelreferencedreflectsaratioofacademic

doctoralstudentstoundergraduatesthatislessthan12percentata

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campus,thecampus’sWEFAwillbeadjustedtoincludeadditionalacademicdoctoralstudentenrollmenttobringitsratioto12percent.Thisadjustmentisintendedtoprovidefundingtosuchcampusessothattheymaytakestepstoincreasethenumbersofacademicdoctoralstudentstoreach12percentofundergraduateenrollment.Campuses’progressingrowinggraduateenrollmentwillbereviewedperiodically.

J. Formulasfordeterminingcampusallocationsunderrebenchingareasfollows:

1. WiththeexceptionofMercedandSanFrancisco,upon

completionofrebenching(i.e.,for2017-18andsubsequentyears),acampus’spermanentallocationofStateGeneralFundswillbecalculatedasfollows:

a. TotalCampusPermanentAllocation=AllocationsforCampusSet-Asides+AllocationforEquitablePer-StudentFunding

b. AllocationforCampusSet-Asides=Newlydesignatedcampusset-asides(ifany)+Prior-YearAllocationforCampusSet-Asides+CostAdjustmentforEligibleSet-Asides

c. CostAdjustmentforEligibleSet-Asides=Prior-YearEligibleSet-Asides*IncreaseinUndesignatedPermanentStateGeneralFunds-NewMercedandSanFranciscoCorridorFunds/TotalPriorYearCampusBaseBudgets

d. AllocationforEquitablePer-StudentFunding=TotalUCStateGeneralFundAppropriations–TotalSet-Asides*CampusWeightedEnrollmentforAllocationPurposes/TotalUCWeightedEnrollmentforAllocationPurposes

K. Communicatingcampusallocations

1. Eachyear,theOfficeofthePresidentissuesallocationlettersto

campusesthatprovidecampus-specificallocationsofStateGeneralFundsand,asappropriate,StateSpecialFunds.

2. ThelettersandaccompanyingmaterialsdescribechangesinState

supportfromtheprioryear,alongwithadescriptionofthemethodologyusedtodeterminethosechanges.

3. Allocationlettersmayalsoprovideguidanceandexpectations

foraddressingprioritiesthatareofcriticalimportancetothesystem.

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4. Priortoadoptinganymaterialchangetotheunderlyinggoals,policies,orpracticesregardingStateGeneralFundallocationsdescribedinthissectiontheOfficeofthePresidentwillconsultwithcampusrepresentatives.

CampusGeneratedFunds

InSeptember2011,followingextensiveconsultationwithbothinternalandexternalUniversitystakeholders,thePresidentoftheUniversityofCaliforniaapprovedtheFundingStreamsInitiative.TheInitiativeaddressedseveralissues,includingthedistributionofcampus-generatedrevenues,fundingforthebudgetoftheOfficeofthePresident,andfundingforundergraduateandstudentfinancialaid.TogetherwithotherUniversitypolicies,theInitiativeaddressestheextenttowhichrevenueattributabletoacampusisretainedbythatcampus.

Thedistributionofcampus-generatedrevenuesundertheFundingStreamsInitiativereflectsthreegoals:

A. SimplifyingUniversityfinancialactivity;

B. Improvingtransparency;and

C. Providingcampuseswithincentivestoidentifyandtomaximize

revenueopportunities.

TheInitiativealsoreflectsanactivity-basedallocationmethodologyforcampus-generatedfunds,inwhichrevenuesassociatedwithcampus-basedfunctions(instruction,research,etc.)areretainedbythecampusthatincurredcostsassociatedwiththosefunctions.Beginningin2011-12,eachcampuswillretain:

A. Alltuitionandfeefundsgeneratedfromitsownstudents,subjectto

provisionsoftheUniversityStudentAidProgramallocations.

B. Eachlocationwillretainallindirectcostrecoveryfundsgeneratedfromitsowncontractandgrantactivity.

C. Allpatentrevenues,netofpaymentstojointholdersandinventors,willbe

allocatedtosourcelocations.

D. AllShort-TermInvestmentPool(STIP)earningsandTotalReturnInvestment Pool(TRIP)earnings,regardlessoffundsource,willbetransferredtosource locations.

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E. Eachcampuswillretainitsowngraduateapplicationfeerevenue;netundergraduateapplicationfeerevenuewillbedistributedproportionatelytothenumberofapplicationsreceivedbyeachcampus.

F. Priorassessmentsonmedicalcenterexpenditures,auxiliaryenterprise

expenditures,andmedicalcompensationplansthatsupportUCOPadministrationthroughtheOfficeofthePresidentCommonFundwillbeeliminated,butreplacedwithanotherwiderrangingassessmenttohelpfundoperatingexpensesassociatedwiththeOfficeofthePresident.

CampusallocationsoftherevenuesdescribedaboveareinadditiontoapplicableUniversitypoliciesandpracticesregardingothertypesofcampus-generatedrevenues–suchasgiftsandendowmentsdesignatedfor,oradministeredby,aparticularcampus,andrevenuegeneratedbycampusauxiliaryenterprises.

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Chapter7StateFunds

TheUniversitywascreatedbytheStateofCaliforniaasitsstate-supportedland-grantinstitution,andassuchisarecipientofStatefunds.TheStateannuallyappropriatesfundstoUCfromitGeneralFunds(fundscollectedfortheState’sgeneraluse).TheprocessofacquiringStatefundsisledbytheUCOfficeofthePresidentandtakesplaceinapoliticalcontextofnegotiationandcompromisethatestablishesthegeneralconditionsofuse.StateGeneralFundsareusedtohelpsupportallaspectsoftheUniversity,exceptforself-supportingactivitiessuchashousingandparking.Thesefundsareprovided,generally,asasinglelineitemintheStateBudget.However,theStateBudgetcananddoesincludeexplicitinstructionsintheformofbudgetlanguageiftheStatewantstodirectsomefundstowardaspecificprogram(e.g.,SAPEP).WhileGeneralFundallocationsrepresentthevastmajorityoffundsreceivedfromtheStatetheUniversityalsoreceives:

� SpecialStateFunds–Thesefundscompriseasmallportion(lessthan2.5%)oftheState’sappropriationtotheUniversity.Theyareearmarkedforspecificusethroughlegislativeand/orvoteractions.Likegeneralfunds,theycometotheUniversitythroughanannualStateBudgetActappropriation.Examplesinclude:

o StateLotteryFundso CigarettesandTobaccoProductsSurtaxFundo BreastCancerResearchAccount

SpecialStateFundsarerestrictedandmustbeusedaccordingtothetermsofthelegislationthatauthorizedthecollectionanduseoftheserevenues,andanyothertermsestablishedintheBudgetAct.

� StateContractsandGrants–ThecampusalsoreceivescontractsandgrantsfromState

agenciesfortheprovisionofresearchandpublicservices.Someindirectcostreimbursement(overhead)fortheadministrationofthesecontractsandgrantsisalsoreceivedandbecomespartoftheUCGeneralFundincome.Thefundsfromthissourcearerestrictedforusedaccordingtothetermsandconditionsoftheindividualaward.Thesefundsarenotpartofthecampuspermanentbudgetastheyaconsidered“extramuralfunds”.

StatefundsrepresentacriticalcomponentoftheUCSantaBarbaracore-fundingbase.Statefundingforthecampushasfluctuatedsubstantiallyovertime.FundingincreasesandreductionshavelargelycoincidedwithchangesintheState’seconomy.StateBudgetSchedule

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TheStatebudgetprocessforUCtakesbetween12and15monthsfromtheinitialplanningbyUCOPuntilthecampusreceivesfinalallocationinstructionsaftertheStatebudgetisapproved.Thenormaltimetableisasfollows:

� JulythroughSeptember–Campuscompletesandsubmitsrequired“budgettables”toUCOP.UCOPdevelopsdraftRegentsBudgetandbeginssystemwideconsultationonbudgetplan.

� OctoberthroughDecember–RegentsadoptUCBudgetPlanandsubmitsittotheState

forreviewandconsideration.

� JanuarythroughMarch–Governor’sBudgetProposalforfiscalyearbeginningJuly1isreleased.ComparisontoUCBudgetPlanismadeatthattimetodeterminedifferencesanddevelopplanstoreducefundingdifferences,ifany.Legislatureholdshearingsonthebudgetproposal.

� AprilthroughJune-Legislativehearingscontinue.Governorsubmits“MayRevise

Budget”whichupdatestheplanbasedonnewrevenueandexpenseinformation.AssemblyandSenateworktogethertoreconciledifferenceandapproveStateBudgetPlanforGovernorsignature.

� JulythroughSeptember–UCOPreviewsapprovedStateBudgetandmakesfinal

allocationstoeachcampus.

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Chapter8UCGeneral Funds

InadditiontoStateGeneralFundsupport,certainotherfundsourcesareunrestrictedandprovidegeneralsupportfortheUniversity’scoremissionactivities,basedonlong-standingagreementswiththeStateofCalifornia.CollectivelyreferredtoasUCGeneralFunds,thesesourcesinclude:

� Aportion(44.055%-55%of80.1%)ofindirectcostrecoveryonfederalcontractsandgrants(seeIndirectCostRecoverySectionofthismanualforadditionalinformation)

� IndirectcostassociatedwithStateContractsandGrants

� Non-ResidentSupplementalTuition(SeesectiononStudentFeesforadditional

information)

� Feesforapplicationforadmissions

� Othermiscellaneousfees

� Aportionofpatentroyaltyincome

� InterestonGeneralFundbalancesByfarthelargestsourceofUCGeneralFundsisNon-ResidentSupplementalTuitionandindirectcostrecoveryonfederalcontractandgrantsisthesecondlargestsource.Togetherthesetwosourcesgenerateapproximately95%ofcampusUCGeneralFunds.

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Chapter9StudentFees

Revenuefromstudenttuitionandfeeshasbecomethesinglelargestsourceoffundingforthecampusinrecentyears.ThecampusrelianceontuitionandfeerevenuetosupportoperationshasgrownovertimeinresponsetolargecutsinStatefunding.StudentsatUCSantaBarbaramaypayavarietyoffeesthatfallunderthiscategory.Theseincludebothmandatoryfeesaswellasotherfeespaidonlybyaportionofthestudents.MandatoryStudentFees

1) Tuition,amandatorysystem-widechargeassessedtoallregisteredstudentsusedtoprovidegeneralsupportforthecampusbudget.

2) StudentServicesFee,anothermandatorysystem-widechargeassessedtoallregistered

studentsthatsupportservicesbenefitingstudents.OtherStudentFees

3) Non-ResidentialSupplementalTuition(NRST),chargedtononresidentstudentsinadditiontomandatorysystem-widechargesandanyapplicablePDSTcharges,inlieuofStatesupportforthecostofeducation.

4) ProfessionDegreeSupplementalTuition(PDST),paidbystudentsenrolledinanumber

ofprofessionaldegreeprogramstosupportinstructionandspecificallytosustainandenhanceprogramquality.

5) CampusBasedFeesapprovedbyastudentvoteandusedtosupportavarietyof

student-relatedexpensesnotcompletelyoradequatelysupportedbyotherfees.PriortoimplementationthestudentapprovedfeemustbeapprovedatthecampusandbythePresidentoftheUniversityofCalifornia.

6) CourseMaterialFeestofundmaterials,supplies,tools,orequipmentwhichare

consumed,retained,orusedbythestudent,orothermaterialsorservicesnecessarytoprovideaspecialsupplementaleducationalexperienceofdirectbenefittothestudent.

7) SummerSessionFeesarebasedontheapprovedTuitionandStudentServicesFeebut

chargedonaper-unitbasis.Atleastone-thirdoftherevenuefromthemandatorysummerfeespaidbyUCstudentsareusedforfinancialaidandrolledintotheUniversityStudentAidProgram(USAP).Asanincentivetoencouragesummerenrollmentcampuses,onatemporarybasis,maychargefeeslowerthanthecalculatedper-unitfeelevel.

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8) ExtensionFeesarechargedbasedtocoverthefullcostsofthecourseandprogramofferingsprovidedthroughthisself-supportingprogram.

9) OtherServiceFeesincludethosechargedforfeeforserviceprogramsandvarious

events.Eachofthestudentfeesisdescribedinmoredetailinthesectionsthatfollow.Inaddition,theUCOPwebsite(seehttp://www.ucop.edu/operating-budget/index.html)containsinformationoncurrentandhistoricalfeelevelsandrelatedfeepolicies.TuitionTuition,formerlycalledtheEducationalFee,andisidentifiedbyfund#20095.Tuitionischargedtoallregisteredstudentsandprovidesgeneralsupportforthecampus-operatingbudget,includinginstruction,academicsupport,studentservices,institutionalsupport,operationandmaintenanceofplants,andstudentfinancialaid.Inrecentyearstuitionincreaseshavebeenneededprimarilytooffsetreductionsinstatefunds.TuitionlevelsarethesameatallUCcampusesandaresetannuallybyTheRegentsbasedonrecommendationsfromthePresident.Perthe1994StudentTuitionandFeePolicy,TuitionislimitedtothegeneralsupportoftheUC’soperatingbudgetandcannotbeusedforcapitalexpenditures.ForadditionalinformationseePolicy3101:TheUniversityofCaliforniaStudentTuitionandFeePolicy.StudentServicesFeeTheStudentServicesFee(SSF),formerlycalledtheRegistrationFee(Fund#20000primarily),ischargedtoallregisteredstudents.Liketuition,theStudentServicesFeeisdeterminedannuallybyTheRegents.Revenuefromthisfeefundsservicesandprogramsthatareimportanttostudents,butarenotpartoftheUniversity’sprogramsofinstruction,research,andpublicservice.Themajorityofthesefundsarespentonstudentservicessuchascounselingandcareerguidance,culturalandsocialactivities,andstudenthealthservices.Beginningin2007-08,portionsoftheStudentServicesFeewerespecificallydesignedforStudentMentalHealthServices(Fund#20005)andfinancialaid.Inaddition,StudentServicesFeerevenuecanbeusedforcapitalimprovementsthatprovideextracurricularbenefitsforstudents.ForadditionalinformationseePolicy3102:PrinciplesUnderlyingtheDeterminationofRegistrationFees.

TheallocationofStudentServicesFeeincomeisdeterminedbythecampusconsistentwithapplicableUniversitypoliciesandguidelines.EachcampushasaStudentFeeAdvisory

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Committee,themembershipofwhichisatleast50%students,toadvisetheChancellorontheuseofthisfundsource.Non-ResidentSupplementalTuitionInadditiontoallotherapplicabletuitionandfees,UCstudentswhodonotqualifyasCaliforniaresidentsarerequiredtopayNon-ResidentSupplementalTuition(NRST),consistentwiththeState’spolicynottoprovidesupportfornon-residentstudents.TheCaliforniaEducationCodeprovidesdirectiontoUCaboutsettingNRSTfeelevels.RevenuesderivedfromthissourceareconsideredUCGeneralandthusarepartofthe199XXgeneralfundbudget.UnlikeTuitionandStudentServicesfees,differentialfeesarechargedandgraduatestudentscurrentlypaysubstantiallylowerannualfeethanundergraduatestudents.Inrecentyears,revenuegeneratedfromNRSTfeeshasplayedanincreasinglyimportantroleinhelpingbackfillaportionoftheshortfallinStatefunding.NRSTdoesnothaveamandatoryfinancialaidset-asiderequirementsoalloftherevenuegeneratedthroughthisfeebecomespartoftheUCGeneralFundsbudgetandhelpsfund19900expenditures.Atyear-end19900expendituresaretransferredtothefundviayear-endprorationfinancialjournals.Undergraduateswhoenrollasnon-residentstypicallypayNRSTfeeseverytermthattheyattendUC,unlessastudent’sparentsmovetoCaliforniaorthestudentisdeemedfinanciallyindependent–averyhighstandardthatisdifficulttomeet–thestudentisunlikelytosatisfytheUniversity’sundergraduateresidencyrequirements.Domesticgraduatestudentsaregenerallypresumedtobefinanciallyindependentandtypicallyestablishresidencyafteroneyear.InternationalstudentscannotestablishresidencyandhencepayNRSTfeeseveryterm(althoughgraduateacademicstudentsareexemptfromthischargeforuptothreeyearsoncetheyadvancetocandidacy).ProfessionalDegreeSupplementalTuition(PDST)ProfessionalDegreeSupplementalTuitionwasestablishedin1994-95toallowUC’sprofessionalschoolstooffsetreductionsinStatesupportandmaintainprogramquality.UCSantaBarbarafirstchargedthePDSTfeein2015-16forthenewTechnologyManagementProgram(TMP)intheCollegeofEngineering.Revenuegeneratedbythefeestayswithintheprogramtocovereligibleoperatingcosts.ExpensesassociatedwiththefeearesubjecttoallcampustaxesandassessmentsincludingNon-StateFundingAdministrativeSupport,CommonGoodFeeforTechnologyServices,andtheUCOPAdministrativeAssessment.Inaddition,atleastone-thirdofthefeerevenueisset-asideforfinancialaidforTMPstudents.Whilepartof“corerevenues”,PDSTrevenuestayswithinthespecificprogramandinadditiontogeneralsupportandsalarycosts,relatedbenefitexpensesarealsofundedfromprogramrevenue(i.e.,nocentralfundingprovidedforbenefits).ForadditionalinformationseePolicy3103:PolicyonProfessionalDegreeSupplementalTuitionandPolicy3104:PrinciplesUnderlyingthe

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DeterminationofFeesforStudentsofProfessionalDegreePrograms.

CampusBasedFees

Campusbasedfeesvarywidelyacrosscampusesandbystudentlevelandfundavarietyofstudent-relatedexpensesnotfundedbyothersources.Eachofthefeesisapprovedbyastudentvoteandforaparticularpurpose.Useofthefeerevenueisrestrictedtotheuseidentifiedintheballotlanguagevotedonbythestudents.Dependingontheballotlanguagethefeescanpayforprogramoperations,debt,orinsomecasesbothoperatingandcapitalexpenses.Theapprovedfeeshelpfundprogramssuchastudentgovernment,publictransit,childcare,recreationfacilities,studenthealth,andCampusLearningAssistanceServices(CLAS).Allnewcampusbasedfeesalsoincludeafinancialaidcomponent.HistoricallyUCSantaBarbaracampusbasedfeeshavebeenamongthehighestintheUCsystem.CourseMaterialandServicesFees“Coursematerialsandservices”aredefinedasmaterials,supplies,tools,orequipmentwhichareconsumed,retained,orusedbythestudent,orothermaterialsorservicesnecessarytoprovideaspecialsupplementaleducationalbenefittothestudent.Feesmaybechargedtostudentstoparticipateintheinstructionalactivitiesofacourse,including:

1) Thecostofprovidingcoursematerialstobeconsumed,retainedorusedbythestudent;2) ThespecialcostsassociatedwithuseofUniversity-ownedtools,musicalinstruments,or

otherequipment;or3) Thecostofothermaterialsorservicesnecessarytoprovideaspecialsupplemental

educationalexperienceofdirectbenefittothestudent.ProposalsforanewCourseMaterialandServicesFeesgothrougharigorouscampusreviewthatincludestheAcademicSenateCollegeExecutiveCommittees,StudentFeeAdvisoryCommittee,IncomeandRechargeCommittee,andtheExecutiveViceChancellorbeforearecommendationismadetotheChancellorforconsideration.TheIncomeandRechargeCommitteeandtheExecutiveViceChancellorreviewproposedchangesinexistingfeesandthenafinalrecommendationismadetotheChancellorforconsideration.ForadditionalinformationregardingCourseMaterialFeesseehttp://www.ucop.edu/operating-budget/_files/fees/da2559.pdf.SummerSessionFeesSummerSessionFeesarebasedontheapprovedTuitionandStudentServicesFeeandarechargedonaperunitbasis.Atleastone-thirdoftherevenuefromthemandatorysummerfeespaidbyUCstudentsisusedforfinancialaidandrolledintotheUniversityStudentAidProgram(USAP).Asanincentivetoencouragesummerenrollmentcampuses,onatemporarybasis,

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maychargefeeslowerthanthecalculatedper-unitfeelevel.Unitfeesarecalculatedasfollows:

1) UndergraduateSummerSessionUnitFee=SumofTuitionandStudentServicesFeeDividedby45(numberofunitsassociatedwithfull-timeundergraduatestudent)

2) GraduateSummerSessionUnitFee=SumofTuitionandStudentServicesFeeDivided

by36(numberofunitsassociatedwithfull-timegraduatestudent)Inadditiontotheunitfee,SummerSessionstudentsalsoareassessedafeeassociatedwithCampusBasedFees.ThesamerestrictionsoncapitalusageassociatedwithTuitionandtheStudentServicesFeeapplytotheSummerSessionfeerevenue.Seehttp://policy.ucop.edu/doc/3100154/SummerFeesforadditionalinformationregardingsummersessionfees.UniversityExtensionInadditiontothetuitionandfeeschargedforregulardegreeprograms,thecampusalsogeneratesfeeincomefromenrollmentinUniversityExtensioncoursesthatofferawiderangeofcourses,programs,andcertificates.Seehttp://extension.ucsb.edu/index.jspforadditionalinformationontheExtensionprogramandfees.TheExtensionprogramisentirelyself-supporting,astheyreceivenoStatefunding.Thefeesarechargedtocoverthefullcostsofofferingthecourseandprograms.Theprogramsandclassesofferedaredependentuponuserdemand.ThefeelevelsforindividualclassesareestablishedatthecampusanddonotrequireapprovalbytheUniversityOfficeofthePresident.OtherSeparatefeesarealsochargedstudent-relatedservicesnotsupportedbymandatorytuitionandfees.Examplesofthesefeesincludestudenthealthinsurancefees,applicationfees,andfeesforspecificservices.Inaddition,incomefromsalesandservicesofeducationandsupportactivitiesfallunderthiscategory.Thisincludesincomefromticketsales(ArtsandLectures,Athletic,andotherevents).Similartoauxiliaryenterprises,theserevenuesaregenerallydedicatedtosupporttheactivityoperations.

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Chapter10IndirectCostRecovery

Contractandgrantactivitygeneratescostsintotwobasiccategories–directandindirect.Directcostsarethoseexpendituresthatcanbeidentifiedasdirectlybenefitinganddirectlychargedtoaspecificcontractorgrant.Indirectcostsarethoseexpenseswhichcannotbespecificallyidentifiedassolelybenefitingonespecificcontractorgrant,butinsteadareincurredforthecommongoodmanycontractsorgrants.Becausethesecostsarenotchargedtoaspecificaward,indirectcostsmustbefinancedbyUniversityfunds,withreimbursementbasedonthenegotiatedratesprovidedbythegrantingagency.Ingeneralterms,thereimbursementamountiscalculatedbymultiplyingtheapprovedindirectcostratetimestheeligibledirectcosts.WiththeimplementationoftheFundingStreamsInitiativein2011-12thecampusretainsalltheindirectcostrecoveryfundinggeneratedbythecampus.AFacilitiesandAdministration(F&AorIndirectCost)Rateisestablishedonthebasisofcostsincurredbytheuniversityinanidentifiedbaseyearandbynegotiationsbetweentheuniversityandthedesignatedfederalgovernmentagency(DHHS–DepartmentofHealthandHumanServicesforUC).Basically,therateistheindirectcostofaspecificfunction(i.e.,research)dividedbythemodifieddirectcostsincurredinsupportofthatfunctionduringthebaseyear.TheF&Arateisappliedonthesamebasisonwhichitiscalculated,namely,onwhatiscalledmodifiedtotaldirectcosts(MTDC),consistingofsalaries,benefits,materialandsupplies,travelandsubgrantsorsubcontractsuptothefirst$25,000ofeachsubgrantorsubcontractassociatedwithsponsoredprojects.Equipmentcosting$5,000ormore,capitalexpenditures,chargesfortuitionremission,rentalcosts,scholarships,andfellowshipsaswellastheportionofeachsubgrantorsubcontractinexcessof$25,000areexcludedfromtheMTDCbase.FederalIndirectCostRecoveryIn1990,TheStateapprovedlegislation(SB1308Garamendi)authorizingtheuseofindirectcostreimbursementfortheacquisition,construction,renovation,equipping,andongoingmaintenanceofcertainresearchfacilitiesandrelatedinfrastructure.Undertheprovisionofthelegislation,theUniversityisauthorizedtousethereimbursementreceivedasaresultofnewresearchconductedin,orasaresultof,thenewfacilitytofinanceandmaintainedthefacility.Theseeligiblecostsoftheseresearchfacilitiesrepresentthefirstuseoffederalindirectcostrecovery.Asof2016UCSBhas5eligibleresearchfacilitieseitherfullyorpartiallyfinancedundertheGaramendiprogram:KITP,MSRB,MRL,CNSI,andBioengineering.Inaddition,theUniversityhasanagreementwiththeStateregardingthedisbursementoffederalreimbursementfunding.Pursuanttothisagreement,thefirst19.9%(afterfundingofGaramendiprojectrelatedexpenses)ofthereimbursementaccruesdirectlytotheUniversityforcostsofcontractandgrantadministrationincampus-sponsoredprojectsoffices,administrativeoffices,academicdepartments,andresearchunits.Thisisthesourceofthe

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University’sContractandGrantOverheadorOff-the-TopFund(69750).Theremaining80.1%ofthefederalreimbursementissplitintotwofunds.Thefirst55%isbudgetedasUCGeneralFundsasfundnumber19933.Itisused,alongwithStateGeneralFundsandstudenttuitionandfeerevenue,tohelpfundtheUniversity’sbasicbudgetincludinginstruction,operationsandmaintenanceofplant,andadministration.Theremaining45%isthesourceoftheUniversity’sOpportunityFund(07427).Thisisusedtomakestrategicinvestmentsincampuspriorities,suchasenhancingfacultyrecruitmentpackagesthroughlabrenovations/alterations,equipmentpurchases,supportforgraduatestudentresearchers;fundingforcapitaloutlayanddebtpayments;andasneededforgeneraloperatingexpenses.OtherContractsandGrants(Non-Federal)Likefederalcontractsandgrants,othernon-federalawardsarealsochargedforindirectcostsusingthefederalrate.Examplesofnon-federalsourcesincludeprivatecorporations,privatefoundations,andfor-profitorganizations.ThereimbursementfromtheseawardsisthesourceoftheEducationalFund(05397).Aspartofthe2011-12FundingStreamsInitiativethecampusretainsalltheindirectcostrecoveryfundinggeneratedbythecampus.Thesefundsareusedinthesamemannerasopportunityfundstosupportfacultyrecruitment,thecapitalprogram,andothercampuspriorities.IndirectCostRateProposalsEveryfourtofiveyearsthecampusdevelopsanewFacilitiesandAdministrative(F&A)costproposalthatissubmittedtotheDepartmentofHealthandHumanServices(DHHS)forreview,negotiation,andapproval.Theentireprocesstakesapproximatelyoneyeartocompleteandtheendresultisanapprovedratethatisusedtorecoveryindirectcostsassociatedwithcontractandgrantactivity.Thekeycomponentsandstepsofthisprocessaresummarizedasfollows:

1) ThecampusworkingwiththeOfficeofthePresidentpreparesanindirectcostproposalbasedonactualcostsforthebaseyear.Thebaseyearistypicallytheyearbeforetheexisting(current)rateagreementisscheduledtoend.

2) Thecostproposalispreparedinaccordancewithcostprinciplesestablishedbythe

FederalOfficeofManagementandBudget(OMB)CircularandGuidance.Seehttp://www.bfs.ucsb.edu/omb/omb-uniform-guidanceforadditionalinformation.

3) Costsincludedintheproposalconsistsof:

a. Currentfundexpendituresrecordedinthecampusfinancialsystemexaminedbyexternalauditorsaspartoftheannualaudit.

b. Expensesrecordedinnon-currentfundssuchasdepreciation,interest,andnon-

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capitalizedplantfundsareaddedasadjustments.c. AllocatedcostofUCOPexpensesareaddedasanadjustmenttocampuscosts.d. Costandimpactofnewresearchfacilitiescompletedinthebaseyeararealso

presentedtosupporttheratenegotiations.

4) Basedonadetailedreviewattheaccount,subaccount,andobjectcodelevelcostsareallocatedtotheidentifieddirectandindirectcostpools.The“CostingPolicyandAnalysis”unitattheUCOfficeofthePresidentmanagesthiswork.TheCampusBudgetOfficecompletesthedetailedreviewofthiswork.

5) F&A(indirectcost)ratesarethencalculatedforeachofthedirectcostpools(research,

instruction,andotherinstitutionalactivities).

6) UCSBF&Arateproposalissubmittedtothedesignatedfederalagency(DHHSforUC).

7) Campusratenegotiationstrategydevelopedthroughcampusconsultation.Thestrategyincludesdesiredrateoutcomeandterm(numberofyears)oftheagreement.

8) UCOPandUCSBrespondtoquestionsregardingtherateproposalfromfederalindirect

costnegotiators.

9) Sitevisitbyfederalnegotiatorsisscheduledandincludesanentranceconference,departmentalvisits,buildingtours,ratenegotiations,andexitconference.Thesitevisitmayormaynotresultinagreementonnewrates.

10) Typicallythenewrateisimplemented24monthsafterthebaseyear(i.e.,baseyearof

FY2015-16withnewratestartinginFY2017-18).RateComponentsThecampusFacilitiesandAdministration(F&A/indirectcost)rateincludesthefollowingratecomponents:

1) FacilitiesRateComponents

a. BuildingUseAllowance–Ingeneralthiscostpoolconsistsofthedepreciationexpenseofcampusownedbuildings.Depreciationiscalculatedoncapitalizedcosts,excludingthecostoflandandfederalcontributions,usingstraight-linedepreciationbasedontheestimatedeconomiclifeoftheasset.Usefullivesassignedtobuildingsrangebetween26and33years.

b. Equipment–Thiscostpoolcontainsdepreciationexpenseforequipment

recordedinUCSB’sequipmentinventory.Equipmentisdefinedaspropertyhavingausefullifeofoneyearandanacquisitioncostof$5,000ormoreper

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unit.Depreciationiscalculatedonastraight-linebasiswithnosalvagevalue.

c. Interest–ThiscostpoolincludesinterestpaidbytheUniversityonthirdpartydebtusedtofinancethepurchase,construction,andrenovationofbuildings.

d. OperationsandMaintenance–Costpoolscontainsexpensesassociatedwiththe

operationandmaintenanceofcampusphysicalplantnetofrecharges.Inaddition,inincludescostassociatedwithEnvironmentalHealthandSafety,Utilities,anddepartmentpaidmaintenance.

e. Library–ContainsexpensesincurredfortheoperationoftheLibrarybothatthe

campusandtheOfficeofthePresident.

2) AdministrativeRateComponents

a. GeneralAdministration–Consistsofexpensesassociatedwiththegeneraladministrativeservicesprovidedtosubstantiallyallunitsoncampus.ExamplesincludetheofficesoftheChancellor,ExecutiveViceChancellor,BudgetandPlanning,AccountingandFinancialServices,andHumanResources.

b. DepartmentAdministration–Costpoolsincludeexpensesassociatedwith

centraladministrationandsupportoftheacademicprogram,includinginstructionaldepartments.

c. SponsoredProjectAdministration–IncludescostincurredbytheOfficeof

Researchandcampusadministrativeunitsresponsiblefortheadministrationofsponsoredprojects.

d. StudentAdministrationandServices-Containsexpensesassociatedwiththe

administrationofstudentaffairsandstudentservicesincludingtheofficesoftheViceChancellor,DeanofStudents,FinancialAid,CounselingandCareerServicesandotherunitsdedicatedtothesupportandadministrationofstudents.

Eachcomponenthasacalculatedrateandthetotaloftheadministrativecomponentiscappedat26%evenifthecalculatedamountexceedsthecappedfigure.Goto:http://www.ucop.edu/financial-accounting/_files/rates/rates_hist.pdfforatablethatshowsthehistoricalratesforUCSBandtheotherUCcampuses.DistributionofIndirectCostRecoveryReimbursementsAnnuallyallocationsofICRfundingaremadetoresearchcontrolpointsbasedonICRgeneratedbyindividualunitswithineachorganization.Separateallocationsarecalculatedforoverheadresultingfromfederalandnon-federalcontractsandgrants.Researchcontrolpointsare

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definedasthoseViceChancellorandDean’swithdepartmentsthatgeneratesubstantialindirectcostrecoveryonanannualbasis.CurrentlytheseincludedtheExecutiveViceChancellor,ViceChancellorResearch,DeanofEngineering,andDeanofMath,Life,andPhysicalSciences.Unitsreportingtothisgroupgeneratemorethan98%ofthecampusindirectcostrecoveryonanannualbasis.Thisgroup,alongwiththeAssistantChancellorFinanceandResourceManagementmeetmultipletimeseachyeartoreviewanddiscussallocationsofindirectcostrecoveryfunds.Thefollowingstepsarefollowedannuallytodeterminetheallocationstoindividualcontrolpoints:

1) IdentifytotalICRreceiptbaseforbothfederalandnon-federalcontractsandgrants.2) Reducebasebyoff-the-topGaramendi(researchbuilding)expensesthatincludedebt,

maintenance,andutilities.3) Distributenetallocationstoappropriatefundgroups–generalfunds,opportunityfund,

C&Goverhead,andeducationalfee.Thebaseforfurtherdistributionisnetofthegeneralfundallocation.

4) Reducebasebyapprovedcampusdistributionssupportingresearch.Thisrepresentsthebaseusedtodetermineallocationstoresearchcontrolpoints.

5) Determinethepercentagecontributionofeachcontrolpointtothefundusingathree-yearrollingaveragetominimizeannual“blips”indistribution.

6) Basedonthedepartmentaladministrationcomponent(36.70%)oftheindirectcostratedeterminetheamounttobeallocatedtoresearchcontrolpoints.Calculationis36.70%timestheallocationbase(see#4above).

7) Allocationsaredeterminedusingtheamounttobeallocated(#6)timesthepercentagecontributions(#5)bycontrolpoints.

8) Researchcontrolpointsagreeonthedistributionandallocationsarethenmade.9) Eachresearchcontrolpointdetermineshowtousethefundingtransferredtotheir

individualarea.StateofCaliforniaIndirectCostRecoveryTheUniversityofCalifornia(UC),CaliforniaStateUniversitySystemandStateofCaliforniaDepartmentofGeneralServiceshavesignedamemorandumofunderstandingimplementingstandardawardagreementtermsandconditions,aswellasstandardproposalcomponents.Commonlyreferredtoas“AB20”or“ModelAgreement”,thestandardtermstookeffectJanuary1,2016.Atthesametime,UCOfficeofthePresident(UCOP)establishedanindirectcostrate(UCRate)forcontractsandgrantsfundingbytheStateofCalifornia.TheUCon-campusratefortheperiodthroughJune30,2017is25%.OnJuly1,2017therateincreasesto30%,thento35%onJuly1,2018,andto40%onJuly1,2019.Theoff-campusrateforallperiodsis25%.Theoff-campusUCRateforallperiodsis25%.TheUCRateineffectforthefirstyearofamulti-yearprojectwillbetheIDCrateusedfortheentireprojectunlessadditionalfunds,notpreviouslyappropriatedorbudgeted)areawarded.Questionsregardingthe“UCRate”shouldbedirected

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totheSponsoredProjectOffice(SPO).AllindirectcostrecoveryassociatedwithStatecontractsandgrantsbecomepartofthecampusgeneralfunds(19900).

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Chapter11CampusAssessmentsandTaxes

UCSantaBarbarahasthefollowingcampus-wideassessment(taxes)inplacetohelpfundthefollowingprograms:

1) Non-StateFundedAdministrativeSupport2) UCOPSupportAssessment3) TechnologyInfrastructureFee4) GiftAssessment(SeeSectiononGiftsandEndowmentsforDetails)

Eachoftheseassessmentsisdescribedindetailinthesectionsthatfollow.Inaddition,theratehistoryassociatedwiththeseassessmentscanbefoundontheBudgetandPlanningwebsiteat:http://bap.ucsb.edu/budget/.

Non-StateFundedAdministrativeSupport(NSFAS)AssessmentNSFASisessentiallyanadministrativeoverheadchargeagainstnon-corefundswithinthreeprimaryfundgroups–non-mandatorystudentfees,salesandservices,andothersources(miscellaneousincome).Thefeeisnotassessedagainstgeneralfunds,mandatorystudentfees,contractsandgrants,andgiftsasthesesourcesfundadministrativecostsdirectlyorthroughseparateoverheadassessmentprograms.TheNon-StateFundedAdministrativeSupport(NSFAS)hasbeeninplacesincethemid1980’s.InFY2010-11theNSFASassessmentwastransitionedfromanassessmentofnon-staterevenuestoanassessmentbasedonnon-stateexpenditures.ThestatedassessmentrateforFY2010-11was6%.Thisratewasincreasedto7%effectiveJuly1,2011.Perlong-standingagreementssomefunds,primarilycampus-basedfees,haveamuchlowerassessmentrate.Threedepartments,theUniversityCenter(UCEN),AssociatedStudents(ASTD),andtheFacultyClub(FACL)continuewiththerevenuebasedNSFASassessmentgiventhattheirexpendituresarenotdirectlyrecordedtotheUCSBG/L.TheNSFASchargesforthesedepartmentsarerecordedatyear-end.Inbrief,undertheexpenditurebasedassessmentapproachtheNSFASassessmentrateisappliedtoexpendituresinallaccountsandsub-accountslinkedtothenon-statefundbeingassessed.TheassessmentrateusedasofFY2016-17is7.0%(1.0%forcertainstudentfeefundsbasedonanagreementapprovedbytheExecutiveViceChancellor).However,thefollowingexpendituresare"taxexempt"andexcludedfromtheexpenditureassessmentbase:• Expendituresforlongtermdebtservicing,regardlessoffundsource.• Expendituresinthe78(FinancialAid)functionalarea,regardlessoffundsource.

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• PriorNSFASandothercampusadministrativesupportassessments(identifiedbyobjectcode3740).Thisavoidsdoubletaxingafundthatiscreatedbyatax.Forexample,theworker’scompensationfundwhichisfundedbyapayrollassessment.

• ExpendituresonstudentfeeremissionandGSHIP(identifiedbyobjectcodes8570,8590,

and8970).• Equipmentexpenditures(objectcodes9xxx).Inreviewingthefunddetailsomeaccount-fundsshowNSFAScredits.Thesearetobeexpectedparticularlyintheinstanceofrechargefunds.Overtime,rechargefundsoperatingontheno-gainno-lossprincipalshouldseeNSFAScharges/creditsbalanceouttozero($0).However,aprocesstakesplaceafterthecloseofthefiscalyear,toreviewandpossiblyreverseanyNSFAScreditsthathavebeeninappropriatelyextendedtorechargefunds.UndernocircumstancesshoulddepartmentsbudgettheNSFASforrecoveryfromcampussub9recharges;however,recoveryofNSFASfromoff-campusrevenuesourcesmaybeallowablesubjecttootherpoliciesgoverningsuchexternalratesandfees.ForavarietyofreasonsanumberoffundswithincurrentNSFASfundrangesarenotnowbeingassessed.ThiscouldbebecausethesearenewfundsthathavebeenrecentlyestablishedorwhenNSFASwasfirstestablishedinthemid-1980’stherevenuegeneratedbythefundwaslessthantheassessmentthresholdatthattime.Overtimetheassessmentwillbeextendedtoallnon-statefunds.Therationalforextendingtheassessmenttoallfundsisthatalltransactionsresultinoverheadexpensesandthereforeshouldbecharged.Absentanassessmenttheoverheadforthesefundsisessentiallybeingsubsidizedbycorefunds,whichhavebeencutdramaticallyinrecentyears.UCOPSupportAssessment–CampusImplementationAspartoftheimplementationofthe“fundingstreamsproposal”theOfficeofthePresidenthasdistributedfundingpreviouslyusedtosupporttheiroperationstocampuses.Theyhavethenassessed(taxed)eachofthecampusesaflatratetosupportUCOPprovidedservices.Theassessmentisbasedontotalcampusexpenditures,numberofstudents,andfaculty/staffateachcampus.I. Effectivewiththe2014-15fiscalyear,thecostofthetotalsystemwide

assessmentisdistributedacrosscampusesbasedonthreeequallyweightedfactors:A. Currentexpendituresfromthecampus.Acampus’stotalexpenditureswill

beusedasageneralindicatorofthefinancialresourcesavailableatthecampus.

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B. Totalnumberofemployeesatthecampus.Theconsiderationofacampus’sshareoftotalUniversityemployeesisintendedtogenerallyreflectacampus’sshareofservicesprovidedbytheOfficeofthePresidentthatarealignedwithemployment-relatedfunctions.

C. Totalnumberofstudents.Acampus’stotalstudentenrollmentrepresentsa

proxyforthecampus’sshareofstudent-andinstruction-relatedservicesandresourcesprovidedbytheOfficeofthePresident.

Campusesarepermittedtouseanyfundsourceorcombinationoffundsourcesnototherwiselegallyrestrictedtocovertheirshareoftheannualassessment.ThetaxrateforFY2016-17is2.97%ofeligibleoperatingexpenses(excludesfinancialaidandcertaincampusbasedfees)andthefundingisusedtocovertheUCSantaBarbarashareofUCOPoperatingexpenses,UCPathimplementation,andlegalexpenses.Thetotalamountcollectedfor2016-17is22,375,834PrinciplesforImplementingtheUCOPSupportAssessment� Theassessmentisbasedonexpendituresnotfundsource.� Sinceallfundsmakeupthebaseusedtocalculatetheassessment,allfundsshould

contributetowardstheassessment.� Anyassessmentassociatedwithcontractandgrantexpenditureswillbefundedfrom

indirectcostrecoveryfunds.ThisispossiblegiventhatUCOPnolongerretainsanyofthesefunds.Also,giventhataportionofUCOPcostsarealreadyincludedinthecurrent51.5%overheadchargedagainstgrantsthisnewassessmentwouldbeconsidereddoubletaxingforthesamepurpose.

� Theassessmentassociatedwithcorefunds(generalfundsandmandatorystudentfees)will

bepaidcentrallyusingfundsalreadyallocatedandset-asideforthatpurpose.� Totheextentpossiblechargesshouldnotbepassedonto,orbetween,othercampus

departmentsthroughhigherrates(i.e.,recharges,MOU’s,feeagreements).Allproposedrateincreaseswillbesubjecttonormalcampusreviewandconsultation.

ImplementationoftheAssessment� AssessmentamountsareprovidedtoeachViceChancellorcontrolpointthatreflectstheir

areastotalassessment,credits,andthenetassessment.Theassessmentisbasedonexpenditures,notfundsource.

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� Eachcontrolpointisresponsibleforpayingtheirexpenditureassessmentandhavebroaddiscretioninidentifyingthefundsourcesfromwhichtheassessmentwillbepaid,excepttheassessmentmaynotbefundedusingcampusbasedstudentfees,financialaidfunds,contractandgrantfunds,orrechargefunds.

� IncollectingtheassessmentControlPointsneedtobemindfulofanyagreementsand

commitmentsthatmayrestrictorlimittheuseofanyspecificfund.Giventhis,ControlPointshavethediscretiontoincludeorexcludeindividualfundsasthecollecttheassessment.Shouldtheyberequiredordecidetoexcludeafundtheywillthenhavetomakeuptheexcludedamountfromotherresourcesundertheircontrol.

� ControlPointsaretypicallynotifiedoftheirassessmentamountinthelatefallofeachyear

withtheassessment“dueandpayable”inthefollowingspring.Onlyonetransferoffundsfromeachcontrolpointisacceptedforpaymentoftheassessment.ItistheresponsibilityoftheControlPointtodeterminehowtoimplementtheassessment,theamounttobepaidindividualunits,andconsolidatethereturnofassessmentintoonetransferoffunds.

AssessmentCalculation� Step1–ExpenditureBase–Thisrepresentsyear-endexpendituresbycontrolpointless

financialaidasthebasisfortheexpenditureassessment.Theresultwillbereferredtoas“netexpenditures”.

� Step2–Assessment-UCOPprovidescampuswiththetotalassessmentamount(i.e.,UCOP

Assessment).� Step3–AssessmentPercentage-Calculatedbydividingthe“UCOPassessment”by“net

expenditures”.� Step4–GrossAssessment-Grosscontrolpointassessmentsarecalculatedbymultiplying

theassessmentpercentage(Step3)timesthecontrolpointtotalexpenses(Step1).� Step5-Credits–Representsassessmentcreditsbyexpenditurefundsource.Credits

providedforexpendituresassociatedwithgeneralfunds,indirectcostrecovery,andmandatorystudentfeesascampusreceivedadditionalallocationsofthesefundsthroughthefundingstreamsprocess.

� Step6–NetAssessment–Equals“grossassessment”less“credits”.Thisistheamountthat

eachcontrolisrequiredtoreturntoacentralaccountinordertofullyfundtheUCOPassessment.Seesectionon“ImplementationoftheAssessment”foradditionaldetails.

EnterpriseTechnologyServices(ETS)Fee

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TheETSSupportAssessmentafterdiscussionwithandendorsementbytheInformationTechnologyBoard(ITB)andtheCoordinatingCommitteeonBudgetStrategy(CCBS)wasimplementbeginningFY2014-15.ThefeeprovidesfinancialsupportforEnterpriseTechnologyServicesandrepresentsa“commongoodassessment”withrevenuesusedtocoverongoingservicesbenefitingthecampusasawhole,aswellasprovidingafundingstreamneededtoimplemententerprisesystemimprovements.AspartoftheimplementationoftheETSAssessment,corefundingthatwasformerlyusedtosupportETSoperationswasreturnedtoacentralaccountandanumberofrechargearrangements–suchasthecampusTechnologyInfrastructureFee(TIF)–havebeendiscontinued.ThenewETSAssessmenthasreplacedthesefundingstreams.Thedistribution(allocation)oftheassessmenttocontrolpointsisconsistenttothemethodemployedwiththeUCOPsupportassessment.LiketheUCOPassessment,theETSassessmentcannotbefundedfromfinancialaidfunds,andpercampusdecisionthetaxisnottobefundedfromcampusbasedfees.PrinciplesforImplementingtheETSSupportAssessment

� Theassessmentisbasedonexpenditures,notfundsource.

� Allfundsmaycontributetowardstheassessment,excepttheassessmentmaynotbefundedusingcampusbasedstudentfees,financialaidfunds,contractandgrantfunds,orrechargefunds.WithintheidentifiedrestrictionsindividualControlPointsdeterminewhatfundsourcestousetofundtheirportionoftheassessment.

� Anyassessmentassociatedwithcontractandgrantexpenditureswillbefundedfrom

indirectcostrecoveryfunds.Also,giventhataportionofUCOPcostsarealreadyincludedinthecurrentchargedagainstgrantsthisnewassessmentwouldbeconsidereddoubletaxingforthesamepurpose.

� IncollectingtheassessmentControlPointsneedtobemindfulofanyagreementsand

commitmentsthatmayrestrictorlimittheuseofaspecificfund.Giventhis,ControlPointshavethediscretiontoincludeorexcludeindividualfundsastheycollecttheassessment.Shouldtheyberequiredordecidetoexcludeafundtheywillthenhavetomakeuptheexcludedamountfromotherresourcesusedtheircontrol/management.

� Theassessmentassociatedwithcorefunds(generalfundsandmandatorystudentfees)

willbepaidcentrallyusingfundsalreadyallocatedandset-asideforthatpurpose.

� Totheextentpossiblechargesshouldnotbepassedonto,orbetween,othercampusdepartmentsthroughhigherrates(i.e.,recharges,MOU’s,feeagreements).Allproposedrateincreaseswillbesubjecttonormalcampusreviewandconsultation.

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ImplementationoftheAssessment� AssessmentamountsareprovidedtoeachViceChancellorcontrolpointthatreflectstheir

areastotalassessment,credits,andthenetassessment.Theassessmentisbasedonexpenditures,notfundsource.

� Eachcontrolpointisresponsibleforpayingtheirexpenditureassessmentandhavebroad

discretioninidentifyingthefundsourcesfromwhichtheassessmentwillbepaid,excepttheassessmentmaynotbefundedusingcampusbasedstudentfees,financialaidfunds,contractandgrantfunds,orrechargefunds.

� IncollectingtheassessmentControlPointsneedtobemindfulofanyagreementsand

commitmentsthatmayrestrictorlimittheuseofanyspecificfund.Giventhis,ControlPointshavethediscretiontoincludeorexcludeindividualfundsasthecollecttheassessment.Shouldtheyberequiredordecidetoexcludeafundtheywillthenhavetomakeuptheexcludedamountfromotherresourcesundertheircontrol.

� ControlPointsaretypicallynotifiedoftheirassessmentamountinthelatefallofeachyear

withtheassessment“dueandpayable”inthefollowingspring.Onlyonetransferoffundsfromeachcontrolpointwillbeacceptedforpaymentoftheassessment.

AssessmentCalculation� Step1–ExpenditureBase–Thisrepresentsyear-endexpendituresbycontrolpointless

financialaidandcampusbasedstudentfeesasthebasisfortheexpenditureassessment.Theresultwillbereferredtoas“netexpenditures”.

� Step2–Assessment–Thecurrentrateis1.95%.Anychangestotheassessmentratewillbe

theInformationTechnologyBoard,reviewedbytheCoordinatingCommitteeonBudgetStrategy,andapprovedbytheExecutiveViceChancellorand/ortheChancellor.

� Step3–AssessmentAmount-Calculatedbymultiplyingtheassessmentratetimesthe

campusnetoperatingexpenditures.� Step4–GrossAssessment-Grosscontrolpointassessmentsarecalculatedbymultiplying

theassessmentpercentage(Step3)timesthecontrolpointtotalexpenses(Step1).� Step5-Credits–Representsassessmentcreditsbyexpenditurefundsource.Credits

providedforexpendituresassociatedwithgeneralfunds,indirectcostrecovery,andmandatorystudentfeesascampusreceivedadditionalallocationsofthesefundsthroughthefundingstreamsprocess.

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� Step6–NetAssessment–Equals“grossassessment”less“credits”.ThisistheamountthateachcontrolisrequiredtoreturntoacentralaccountinordertofullyfundtheUCOPassessment.Seesectionon“ImplementationoftheAssessment”foradditionaldetails.

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Chapter12GiftsandEndowments(Philanthropy)

TherearetwolegalentitiesthatUCpolicyallowstoacceptgiftsinsupportofourcampus-TheUCRegentsandtheUCSantaBarbaraFoundation.Philanthropyannuallyprovidessupportforawiderangeofactivitiesincludingstudentfinancialaid,facultychairs,research,capitalimprovements,andprogramsupport.Fundsinthiscategoryincludecurrentyeargifts,aswellasannualpayoutsfromendowmentsandfundsfunctioningasendowments(FFE).Giftsarereceivedfromalumni,friendsoftheUniversity,corporations,privatefoundations,andothernon-profitentities.Endowmentsarecreatedwhenadonorspecifiesthatthegiftfundsaretoberetainedandinvestedinperpetuityforincomeproducingpurposes.Incomefromendowmentscaneitherberestrictedorunrestrictedbasedondonordesignation.PayoutsfromtheRegents’endowmentsarepermanentlybudgetedwhilepayoutsfromthecampusfoundationarehandledthroughfundtransferstothecampusandtheappropriateimplementingdepartment/organization.Whilesupportingawiderangeofactivities,expendituresfromGiftandEndowmentFundstendtobehighlyrestrictedduetoconditionsplacedonusagebythedonor.BeginningJuly1,2012anadministrativefeeof6%isassessedonreceiptofnewgiftsandpledgepayments.Giftsaresubjectto6%giftfeeassessmentwithamaximumfeeof$180,000onanyonegift.Incaseswhereagiftisatangibleasset(i.e.,property)andislatersoldtheygiveadministrativefeeispaidatthetimeofsale.On“gifts-in-kind”noadministrativefeeischargedasnocashisinvolvedinthistransaction.Revenuegeneratedfromthegiftfeeassessmentisusedtohelpcovertheoperatingcostsofthecampusfundraisingprogram.Thegiftfeeisusedtoreducetheuseofcorefundingandunrestrictedgiftsincoveringthecostsoffundraisingactivitiesandallowthereallocationofsuchfundstoothercoreprogramsofthecampus.Inthefuture,shouldallcoreandunrestrictedgiftfundingforfundraisingactivitiesbereplacedanyadditionalgiftfeerevenuewillbeusedtoenhanceandexpandfundraisingeffortsofthecampus.Thegiftfeeisdisclosedtodonorsingiftdocuments,pledgeletters,proposals,solicitationsandotherrelateddocumentstoensuredonorsareveryawareoftheassessment.TheannualcampusBudgetPlandoesnotincludeanticipatedchangesinphilanthropicgivingtotheUniversitythatmaybeusedtofundcoreoperations.Tobeincludedintheplan,giftsmusteitherbeunrestrictedorhavetermsthatpermittheuseofsuchfundsforcoreoperations.Experienceindicatesthevastmajority(upwardsof98%)ofgiftstendtoberestrictedforspecificusesandassuchthefundsgeneratedfromthissourcetypicallyarenotincludedaspartoftheBudgetPlanforcoreoperations.Theplandoes,however,includeanestimateofgiftfeerevenuetobecollectedasithelpsfundtheoperatingcostsofacoreoperationalunit(Development).

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Eachgifthasanassociated“FundRecordSheet”whichprovidesdetailedinformationaboutthegiftincludingfundnumber,fundname,donoridentification,purpose,fundadministrator,fundtype,andrelevantbackground.Commonlyusedtermsassociatedwithgiftsincludethefollowing:

� CurrentYearGifts–Acurrentusefundiscomposedofagiftorgiftsdonatedwiththeexpressintentthattheybefullyexpended.Acurrentusegiftmaybedesignatedunrestricted(Afunds)orrestricted(Bfunds).

� FundFunctioningasEndowments(CFunds)–AnFFEisnotdesignatedbythedonorforendowment,butaretreatedasendowmentsbyadministrativeaction.TheincomegeneratedfromaFFEisdistributedannuallytoappropriatecampusdepartment.Withadequatenoticetheprincipleofthefundcanalsobeallocatedandusedinaccordancewiththeinitialgiftagreement.

� Endowments(DFund)–Fundsspecifiedbydonorsthataretoberetainedandinvestedinperpetuityforincomeproducingpurposes.Incomefromendowmentscaneitherberestrictedorunrestrictedbasedondonordesignation.

� Pledge–Asignedcommitmenttomakeagiftoveraspecifiedperiod,payableaccordingtotermssetforthbythedonor,nottoexceedafive-yearperiod,withscheduledpayments.

� RestrictedGift–Agiftgivenwithaspecifiedpurposeclearlystatedbythedonor.� UnrestrictedGift–Agiftgivenwithoutanyrestrictionsonitsuse.

CurrentUseGifts(Processing)IfthegiftismadetotheUCRegents,itisdepositedwiththeUCSBCashier'sOfficeandTheAccountingOfficepostsittothecampusgeneralledgeroncethegifthasbeenformallyacceptedandprocessedbytheGiftAdministrationUnitwithintheDevelopmentOffice.IfthegiftismadetotheUCSantaBarbaraFoundationthecheckisdeliveredtotheGiftAdministrationUnitintheDevelopmentOfficeandthendepositedbytheFoundationintotheirexternalclearingaccount.OncethegifthasbeenformallyacceptedandprocessedbyGiftAdministration,theFoundationreconcilesthedailydepositdatawithadownloadofthemonthfromGiftAdministrationandthenclosesthemonthlyaccountingcycle.AftertheclosetheFoundationcutscheckstothecampusfordepositandthesearedepositedwiththeUCSBCashier'sOffice.ThentheAccountingOfficedistributesthefundstotheCampusGeneralLedger.NOTE:BecausethetimeframetoprocessUCRegentscurrentusegiftstypicallytakeslesstime,andallcurrentusegiftsareencouragedtoflowtotheUCRegents.EndowmentGifts

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IfthegiftismadetotheUCRegents,itisdepositedwiththeUCSBCashier'sOfficeandTheAccountingOfficejournalsthefundsuptoUCOPforinvestmentbytheOfficeofthePresidentCIO.Thegiftitselfdoesnotpostontothecampusgeneralledger,insteaditisrecordedonUCOPGeneralLedger.Whenpayoutsfromendowedfundsoccur,theyareprocessedbyjournaldownandtheCampusAccountingOfficepoststhemintothecampusgeneralledgerincoordinationwiththeBudgetOffice.IfthegiftismadetotheUCSantaBarbaraFoundationthecheckisdeliveredtotheGiftAdministrationUnitintheDevelopmentOfficeandthendepositedbytheFoundationintotheirexternalclearingaccount.OnthegifthasbeenformallyacceptedandprocessedbyGiftAdministration,theFoundationreconcilesthedailydepositdatawithadownloadofthemonthfromGiftAdministrationandthenclosesthemonthlyaccountingcycle.TheFoundationtheninveststhefundsintheFoundation'sLongTermInvestmentPool.Whenpayoutsoccur,theFoundationcutscheckstothecampusfordepositandthesearedepositedwiththeUCSBCashier'sOffice.ThentheAccountingOfficedistributesthefundstotheCampusGeneralLedger.Foradditionalinformationonphilanthropygoto:https://giving.ucsb.edu/ucsb-foundation.Fromthislink,youcanaccesspoliciesandguidancerelatedfinancialmanagementofgiftfunds.

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Chapter13InterestonInvestments

CashbalancesareinvestedinSTIPorTRIPtogenerateinterestincometosupportcampusoperatingandcapitalneeds.TheChiefInvestmentOfficeroftheRegentsmanagestheinvestmentsassociatedwiththeSTIPandTRIPprograms.ThecampusworkswiththeOfficeofthePresidenttodeterminewhatpercentageofcashbalances,intotalandnotbyindividualfunds,shouldbeinvestedineachvehiclebasedonanticipatedcashneeds.TheShort-TermInvestmentPool(STIP)wasestablishedinFY1975-76asacashinvestmentpoolavailabletoallUCfundgroups.STIPallowsfundparticipantstomaximizethereturnsontheirshort-termcashbalancesbytakingadvantageoftheeconomiesofscaleofinvestinginalargerpool.STIPconsistsprimarilyofcurrentfundsslatedforpayrollandoperating/constructionexpensesforallUCcampusesandmedicalcenter.Inaddition,fundsawaitingpermanentinvestmentinoneofthelong-termpoolsareinvestedinSTIPtoearnmaximumdailyinterestuntiltransferred.TheTotalReturnInvestmentPool(TRIP)isaninvestmentpoolestablishedin2008bytheRegents’andisavailabletoUCcampusesandtheUCOfficeofthePresident.TheTRIPallowscampusestomaximizereturnontheirintermediate-termworkingcapital,subjecttoanacceptablelevelofrisk,bytakingadvantageoftheeconomiesofscaleofinvestinginalargerpoolandinvestingacrossabroadrangeofassetclasses.Giventhevolatilenatureofinvestments,theinterestincomefromthissourceisonlyusedasone-timefundingandnotpermanentlybudgeted.TofurtherminimizerisksSTIPandTRIPincomeisnotallocateduntiltheactualreceiptofthefundsasopposedtousingarevenueestimatebasedoninterestratesatapointintime.Essentiallytheincomeisbudgetedandallocatedthefiscalyearafteritisearned.Forexample,interestincomeassociatedwithFY2014-15investmentswouldbeusedinFY2015-16.Interestincometypicallyamountstolessthan1%oftotalannualrevenuesandprimarilyusedforcampuscontributionstocapitalimprovementssuchaslabimprovementsassociatedwithfacultyrecruitment.

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Chapter14Income&Recharge

Rateschargedforservicesaresubjecttoreviewandapprovalbyentitiesoutsidetheimplementingdepartments.Allcampusratesaresubjecttoreview.Chargesforgoodsorservicescanonlybeimplementedafterrateshavebeenapproved.TheIncomeandRechargeCommitteereviewsallratesexceptthosesetbyregulatorybodiessuchastheRegentsortheOfficeofthePresident.RatessubjecttocontrolthroughotherspecificUniversitypoliciesarealsonotsubjecttoreviewbytheIncomeandRechargeCommittee.Examplesofthesewouldbeparkingandstudenthousing.ThevastmajorityofratesarereviewedbytheIncomeandRechargeCommitteeandapprovedbytheExecutiveViceChancellorand/orChancellor.Perpolicyratesaretobereviewedonanannualbasis.Theterm“recharge”referstotheassessment(charge)byonecampusaccountforgoodsorservicestoanothercampusaccount.Theassessmentisbasedonanidentifiableunitofmeasure.Examplesincludewebsitedesignservices,useofresearchofequipment,andautomobilerentals.Theterm“income”referstorevenuegeneratedbycampusdepartmentsorunitsfromsalestonon-universityclientele(i.e.,non-departmentalsales).Examplesincludethechargingofaprivatesectorcompanyfortheuseofspecializedequipment,chargingofstudentsfortranscripts,andthechargingfaculty,staff,orstudentsforparking.RateProposalExpenseOutlineAsadepartmentbeginstodeveloparateproposalassociatedwithprovidingaservicetocampusandoff-campususerstheexpensecategorieslistedbelowshouldbeusedtohelpthepreparerdeterminetheexpensestobeconsidered.SeetheobjectcodelistingfoundontheGeneralAccountingportionoftheBusinessandFinancialServicesweb-siteforamoredetailedlistingofpotentialoperatingexpensesthatshouldbeconsideredwhendevelopingaprogrambudgetandrateproposal.

1) Salariesa. CareerEmployees(Subs0and1)b. CasualEmployees(Sub2)c. Notethatwhenemployeesareidentifiedaspartofarecharge/incomeaccount

theirpayrolldistributionshouldreflectthatassignmentandtheirpayrollandbenefitexpensesshouldbefundedfromtherecharge/incomeaccount.

2) Benefits(Sub6)

a. Benefitexpensesforeachemployeeidentifiedin#1above.b. Notebenefitexpensesvaryfromemployeetoemployeesoeachemployeecost

needstobereviewedaspartofthebudgetingprocess.

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3) Supplies&Expenses(Sub3)Include:a. Materials(Examples:GeneralOfficeSupplies,SpecializedForms)b. Communications(Telephone)c. Mail(postage,fedex,etc.)d. Travele. Trainingf. Rental(SpaceandEquipment)g. CopyingExpensesh. Subscriptionsi. Membershipj. MaintenanceAgreements(Equipment&Software)k. ComputerSoftwarePurchases(Word,Excel,OtherSoftware)

4) DepreciationofEquipment(Reserve)

a. Initialequipmentnecessarytoimplementprogramtypicallyfundedfromcoresupport,gifts,orcontractsandgrants.Equipmentdepreciationisthenchargedaspartofaratetocreateareplacementreserve.

5) Taxes/Assessments(SeeChapter11foradditionalinformation.Forcurrentassessment

ratesgotohttp://bap.ucsb.edu/budget/andselect“Assessments”fromthemenutab.a. Non-StateFundedAdministrativeSupport(NSFAS)ischargedagainstall

expensesassociatedwithanincomeaccount.b. UCOPTaxchargedasa%ofexpenses.c. EnterpriseTechnologyServices“CommonGoodFee”.

6) FinancialAid(Rare)

a. Incaseswhereservicesarechargedtoindividualsadepartmentmaywanttoensurethatthefeedoesn’timpactaccess.Inthesecircumstancesacomponentofthefeethateveryonepayscouldbedesignatedfor“financialaid”.Thedepartmentwouldthenchargethe“financialaidfund”incasesoffinancialneed.Apolicyneedstobeinplacethatclearlydefineshowthefinancialaidfundswouldbeaccessedandwhatapprovalswouldbenecessary.AsimilarprogramcouldalsobefundedfromtheNUDassessment(See#8below).

7) DepartmentOverhead

a. Attimes,centralcontrolpointstaffprovidesservicesinsupportofanincome/rechargeaccount.Thiscantakemanyformsbutisoftenintheformoffinancialmanagement,purchasingsupport,and/orpersonneladministration.Thesearerealworkloadimpactsandthecanbecoveredthroughanoverheadassessmentonrates.

b. Theseexpensesneedtobeidentifiedandcanberecoveredbyaddingapercentageincreasetotherates.Thepercentageiscalculatedbytakingthetotalindirectsupportserviceschargesdividedbythetotaldirectchargesofthe

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services.Theresultingpercentageisthenappliedtoeachoftherates.Thisapproachistypicallyusedinoperationslikeastorehousewhereconsumablesareinvolved.

c. Anyrevenuederivedfromthisapproachhastobeusedtooffsettheexpendituresofthearea/departmentprovidingtheservice.

d. Anoptiontorecoverthese“support”costsisalsotoincludethemaspartofthetotalprogramcostsandthenallocateafairsharetoeachoftheservicestobeprovided.Thenetimpactontheoverallexpensesandrevenuegeneratedwouldbezeroundereitheroption.

8) Non-UniversityDifferential(NUD)

a. Whenservicesareprovidedtonon-university(off-campus)userschargingofaNon-UniversityDifferential(NUD)isstronglyrecommended.

b. ThedepartmenthastheflexibilityindeterminingtheNUDamountbutthestartingpointistheapprovedcampusindirectcostrateusedforresearch.Thedepartmentcanmakeacaseforgoingupordownfromthatamount.

c. TherevenuegeneratedbytheNUDcanbeusedbythedepartmentand/orcontrolpointasadiscretionaryfundsourceanddoesnothavetobeusedtocoverprogramrelatedcosts.ThepotentialusesofNUDrevenueinclude:

i. Reserveforoperations–Giventhattheseareself-supportingprogramsitisprudenttohaveareservelargeenoughtocoveranycostsonanannualbasisthatmaybeinexcessofrevenuesgenerated.

ii. Purchaseofnewequipment–Thesefundscouldbeusedtosupplementthefundingavailableinthedepreciationreserveatanyonetimeorpurchaseadditionalequipmentinsupportoftheprogram.

iii. RateReduction–DecisioncanbemadetofundthecampusassessmentsfromtheNUDratherthanaspartoftherate.Thishastheeffectofloweringtheoverallratewhichmaybeareasonableuseofthesefundstomaintaintheratesnearmarketlevels.

iv. FinancialAid–Ratherthanincludefinancialaidwithintheratesadecisioncouldbemadetoset-asideaportionoftheNUDforthispurpose.

v. GraduateStudentSupport–Giventhatthisisadiscretionarysourceadecisioncanbemadetousethefundstosupplementexistingprogramswithinthedepartment/controlpointssuchasgraduatestudentsupport.

vi. DepartmentOverhead–AportionoftheNUDcouldbedesignated/returnedtothecontrolpoint(Dean’sOffice)tocoversupportservices.Inthiscase,aseparateoverheadadjustmentshouldnotbeincludedintheratetorecoversimilarcosts.

9) GeneralRateCalculationInformation

a. Expensesshouldbedeterminedforeachpotentialrateb. Ratesarecalculatedbydividingtotalcostsbytotalunitsofservice(hours,uses,

etc.)

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c. SeeIncomeandRechargeGuidelinesforexamplesofratecalculationsd. Eachratemustbeaccompaniedbyaratecalculationworksheete. Theratecalculationworksheetsthencanbeusedtosummarizethetotal

revenueandexpensebudgetsfortheentireprogram.f. Ratesshouldbeupdatedannualtoensurethattheywillresultinafully

fundedbudget.AdditionalinformationontheIncomeandRechargeProgramandcampusguidelinescanbefoundathttp://bap.ucsb.edu/budget/.ThecampusguidelinesarebasedonUCandcampuspolicy,FederalOMBguidelines,therecommendationsofaFaculty/AdministrationCommitteeappointedtoreviewtherechargeprocess,internalaudits,commentsfrombothprovidersandusersofrechargeservices,andinputfrommembersoftheIncomeandRechargeCommittee.Thereferencedguidelinesweredevelopedtosupplementexistingpoliciesandprocedures,aswellastobetterdefinetheresponsibilitiesofserviceprovidersandtheIncomeandRechargeCommittee.

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Chapter15FinancialAid

TheUniversity’sstudentfinancialaidprograms,guidedbypolicyadoptedbytheRegentsin1994,arecloselylinkedtotheUniversity’sgoalsofstudentaccessibilityandmeetingthestate’sworkforceneeds.Tomitigatetheimpactoftuitionandfeeincreases,aswellasincreasesinothereducationalexpenses,theUniversityusesaportionofthenewrevenuederivedfromtuitionandfeeincreasestosupportfinancialaid.Othersourcesoffunds,includingStatefundingforCalGrantsandfederalandprivatefunds,helpUCmeetitsfinancialaidgoals.Policies1) TheUniversityStudentAidProgram(USAP),theUniversity’sprimarysystemwide

institutionalaidprogram,isdesignedtoachievethegoalsarticulatedbytheRegentsinRegentsPolicy3201:TheUniversityofCaliforniaFinancialAidPolicy.

2) Institutionalfinancialaidforstudentsinprofessionaldegreeprogramsthatassess

ProfessionalDegreeSupplementalTuitionisaddressedinRegentsPolicy3103: PolicyonProfessionalDegreeSupplementalTuitionandRegentsandRegentsPolicy3104:PrinciplesUnderlyingtheDeterminationofFeesforStudentsofProfessionalDegreePrograms.

Seehttp://www.ucop.edu/student-affairs/policies/index.htmlforadditionalinformationonUCfinancialaidpolicies,guidelines,andprograms.UndergraduateFinancialAidAttheUndergraduatelevel,theprimarygoaloftheUniversity’sfinancialaidprogramistomaintainaffordabilityforallstudentsadmittedregardlessoftheirfinancialresources.Statedanotherway,UC’sgoalistoremainfinanciallyaccessibletoallacademicallyeligiblestudentssothatfinancialconsiderationsarenotanobstacletoastudent’sdecisiontoenrollattheUniversityofCalifornia.TheUniversity’ssystemwideundergraduatefinancialaidstrategyincludestwocorecomponents:1) TheEducationFinancingModel(EFM)-TheEFMisanintegratedframeworkthatis

usedtoassesstheUniversity’sroleinfundingitsfinancialaidprograms,todeterminehowfinancialaidisallocatedacrosscampuses,andtoguidecampusesinawardingaidtoindividualstudentsandfamilies. UnderEFM,astudent’sUCgranteligibilityisbaseduponthedifferencebetween(a)astudent’sin-statetotalcostofattendance(includingtuitionandfees,roomandboard,booksandsupplies,etc.)and(b)the

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combinationofareasonablecontributionfromparents,grantsfromFederalandStateprograms,andamanageablestudentself-helpcontributionfromworkand/orborrowing.

2) TheBlueandGoldOpportunityPlan-Introducedin2009,itisintended toprovidelow-

incomestudentswithaclearmessageregardingtheavailabilityofgrantsandscholarshipstocoverUCtuitionandfees.AwardsmadeundertheBlueandGoldOpportunityPlansupplement,ifneeded,UCgrantsawardedunderEFMtoensurethateligibleCaliforniaresidentstudentswhoseparentalincomeisbelowaspecifiedthreshold($80,000in2015-16)receivegrantandscholarshipsassistancethatfullycoversthestudent’sin-statemandatorysystemwidefees,subjecttoastudent’sfinancialneed.

TheUniversity’sfundinggoalforUSAPistoensurethatfundsareavailabletomeettheUniversity’sobligationsundertheBlueandGoldOpportunityPlanandtokeepstudents’self-helpexpectation–theamountthatUCexpectsstudentstocontributetowardsthecostoftheireducationthroughworkandborrowing–atmanageablelevelsacrossthesystem.FundingavailableforUSAPinagivenyearshouldtakeintoconsiderationfactorssuchasprojectedsystemwideenrollmentlevels;projectedin-statestudentexpensesateachcampus;students’projectedresourcesfromtheirparentsandFederalandStategrantprograms;StateappropriationstotheUniversityforfinancialaid;andtheavailabilityoffundsfromtuition,fees,andothersourcesinlightofothercriticalneedsforthosefunds.TheUniversity’spracticeinrecentyearshasbeentosetasideone-thirdofnewmandatorysystemwidefeerevenueforfinancialaid,whichhasprovidedsufficientfundstoachievetheUniversity’sfundinggoal.Thispracticeisevaluatedannuallyandmaybeadjustedasappropriateinresponsetoanymaterialchangestothefactorsdescribedabove.SourceandAllocationoffundsUndergraduateUSAPisfundedprimarilyfromundergraduateTuitionandStudentServicesFeerevenue(“return-to-aid”)andaportionoftheUniversity’sbaseStateGeneralFundbudget.Campuseshavethediscretiontosubstituteortoaugmentthisfundingwithalternativefundsources(e.g.,privategifts).CampusallocationsofUSAParebasedupontheestimatedUSAPfundingneededateachcampusto(a)meettheUniversity’scommitmentundertheBlueandGoldOpportunityPlanand(b)providesufficientfundingtoenablecampusestoofferfinancialaidpackagesthatreflectasimilarbaselinelevelofstudentself-helpfromwork

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andborrowingacrossthesystem.Allocationsreflect:1) AcommonpercentageofundergraduateTuitionandStudentServicesFeerevenue

setasideateachcampustofundundergraduateUSAP;

2) AllocationsoftheStateGeneralFundportionofUSAPacrosscampusesbaseduponeachcampus’sremainingneedforUSAP;

3) ReallocationofanyTuitionrevenuegeneratedatacampusunder#1abovethat

exceedsthecampus’sestimatedUSAPneed,tobedistributedtoother campusesaccordingtothosecampuses’estimatedremainingUSAPneed;and

4) ForplanningpurposestheannualincreaseinundergraduateUSAPfundingisequalto

33%oftherevenueincreaseassociatedwithstudentgrowthandanyfeeincrease.GraduateStudentFinancialAidAtthegraduatelevel,theRegents’financialaidpolicycallsupontheUniversitytoattractadiversepoolofhighlyqualifiedstudentsbyprovidingacompetitivelevelofsupportrelativetothecostofotherinstitutions.ThiscompetitivecontextreflectsthefactthatgraduatestudentenrollmentistiedmostdirectlytotheUniversity’sresearchmissionandhelpsthestatemeetitsacademicandprofessionalworkforceneeds.Graduatestudentsreceivesupportinawidevarietyofforms,includingmerit-basedfellowships,need-basedgrants,teachingassistantships,andresearchassistantships,andfromawidevarietyofsources.GraduateUSAPfundingisusedinconjunctionwithothersourcesofinstitutionalandextramuralfundstoprovidethesediversetypesofsupport,whichwillvarybaseduponfactorssuchasastudent’sfieldofstudyanddegreeobjective.GraduateFinancialAidFundingLevelsEachyear,campusesareexpectedtosetasideaminimumpercentageofTuitionandStudentServicesFeerevenueforgraduatestudentsupport.1) Thepercentageishigherforgraduateacademicstudentsthanitisforstudentsin

professionaldegreeprograms;consistentwiththehigherfundinglevelsneededtosupportgraduateacademicstudents–particularly thoseindoctoralprograms.

2) Thepercentageisdeterminedbyaugmentingtheprioryearsystemwidegraduate

USAPbudgetsforgraduateacademicandprofessionaldegreestudentsbyapercentageofanynewmandatorysystemwidefeerevenueattributabletothosestudents.Theadditionalfundingisintendedtohelpoffsettheimpactofenrollmentgrowthandincreasesinmandatorysystemwidechargesonacampus’sabilityto

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providecompetitiveoffersofstudentfinancialsupport.3) ThesenewUSAPbudgetsarethenusedtocalculateupdatedaveragereturn-to-aid

percentagesforgraduateacademicandprofessionaldegreestudentsforthefollowingyear.Theseupdatedaveragereturn-to-aidratesserveastheminimumpercentageofTuitionandStudentServicesFeerevenuetobeusedforgraduatestudentsupport.

SourceandAllocationofFundsGraduateUSAPfundsarederivedfromaportionofmandatorysystemwidechargespaidbygraduatestudents,asdescribedabove.

GraduateUSAPfundsarenotallocatedacrosscampuses.Rather,eachcampusisexpectedtouseaspecifiedminimumpercentageofTuitionandStudentServicesFeerevenueattributabletoitsgraduateacademicandprofessionaldegreestudentsforgraduatestudentfinancialsupport.Forplanningpurposestheannualincreaseisassumedtobe50%oftherevenueincreaseassociatedwithgraduatestudentgrowthandchangesinfeelevels.ProfessionalDegreeSupplementalTuition(PDST)FinancialaidforstudentsenrolledinprogramsthatassessProfessionalDegreeSupplementalTuition(PDST)isintended(1)toensurethatthehighercostsoftheseprogramsarenotaninsurmountablebarriertoaccessforstudents,and(2)tominimizefinancialbarrierstothepursuitofcareersinpublicservice.Eachprofessionaldegreeprogramdevelopsitsowncomplementof financialaidawards,whichmayincludeelementssuchasneed-basedgrants,merit-basedfellowships,and/orloanrepaymentassistanceforgraduatesoftheprogram.SourceofFundsandAllocationPursuanttoRegentsPolicy3103:PolicyonProfessionalDegreeSupplementalTuition,programsareexpectedtosupplementtheirprogramseachyearbyanamountequivalenttoatleast33percentofnewPDSTrevenue,orbyanamountnecessarytoensurethatfinancialaidresourcesareequivalenttoatleast33percentofallPDSTrevenuefortheprogram.ProgramsareexpectedtosupplementfundingbyanamountequivalenttoaspecifiedpercentageofPDSTrevenue;programsmayusePDSTrevenueorotheravailablesourcesoffunds(e.g.,privategifts)tomeetthatfundingexpectation.FinancialaidfundsattributabletoPDSTrevenuearenotallocatedacrosscampuses.Rather,eachprogramisexpectedtomeetitsownminimumfundingrequirementasdescribedabove.

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Appendix1CommonCampusBudgetandFinancialTerms

Onadailybasismanytermsareusedduringthediscussionoffinancialtransactions.Thelistbelowisintendedtodefinethoseterms,inhopefullyclearandconciselanguage.Forthoseinterestedinmoredetaileddescriptions,anumberofthetermsalsohavealinktootheravailableresources.Itisanticipatedthatadditionaltermsanddefinitionswillbeaddedonaregularbasis.Account-Accountnumbersareusedtoidentifyhowfundsarebudgetedandexpendedandhowincomeiscollected.Accountnumbersare6digitslong.Thefirsttwodigitsindicatetheaccountfunctionormajorexpenditurecategory.Appropriation-Anamountallocatedforexpenditureforadepartment,unitoractivitytoidentifyalimitontheamountthatcanbespent.Anappropriationcaninclude“permanently”budgetedfunds,carry-forwardfunding,and/orone-timeallocations.BudgetedFunds-Typicallyreferstopermanentlybudgetedactivitiesanddoesnotincludetemporaryorone-timeallocationsorsuchthingsasextramuralcontractsorgrantactivityandcurrentyeargifts.CampusBasedFees–Thesearefeesinitiatedandapprovedbystudentsforaspecificpurposeviaastudentreferendum,andlaterapprovedbyTheRegents.Thefeesaremandatoryasaconditionofenrollmentandcoveravarietyofstudent-relatedexpenses.Therevenuesmustbeusedconsistentwiththetermsandlanguageofthereferendum.CapitalProject–Aprojectinvolvingthepurchase,capitallease,orgroundleaseofrealproperty;aconstructionproject;oracapitalequipmentpurchase.Theseincludebothminor($35,000to$750,000)andmajorcapitalimprovements(greaterthan$750,000).ChartofAccounts–Anumberingschemetoassistinidentifyinghowfundsarereceivedandhowfundsareused.ItenablestheUniversitytoreportinformationtoavarietyofexternalandinternalsources.Thisincludesinformationoncampuslocation,account,fund,subaccount,andobjectcodeandisoftenreferredtoasLAFSO.CoreFunds-ComprisedofStateGeneralFunds,UCGeneralFunds,mandatorystudentfees,andoverheadfunds,thesefundsprovidepermanentsupportforthecoremissionactivitiesoftheUniversity:instruction,research,andpublicservice,aswellastheadministrativeandsupportservicesneededtocarryouttheseactivities.CourseMaterialFees-Thesefeescovercostsspecifictoanacademiccourse,suchasmaterialstobeusedinastudioartsclassortravelcostsforanarcheologicaldig.Theyarenotmandatoryasaconditionofenrollmentandareonlychargedtostudentsandotherswhentheyactually

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usetheservice(i.e.applicationfees,coursematerialfees,labusefees,etc.)ThefeesaresetbytheChancellorbutmaynotexceedtheactualcostperstudentofthematerialsandservicesprovidedforthecourseinquestion.Therevenuefromthesefeesisusedtosupporttheserviceprovided.Debt–Anamountowedforfundsborrowed.Debtallowsinstitutionstoplanandexecutemajorcapitalprogramsbyprovidingafinancingmechanismthatspreadscashflowobligationsoverlongerperiodsoftime.DebtCapacity-Ameasureoftheamountofdebtthatcanincurataparticularcreditratinglevel;itservesasameasureofthecapitalmarkets’assessmentofaninstitution’sfinancialstrength.ThecreditratingsoftheUniversity’sbondsarerelevantinthattheydirectlyimpactthecostoffunding:thehigherthecreditrating,thelowerthecostofborrowing(i.e.,theyieldtheUniversityhastopayinvestorsofitsbonds)andviceversa.DirectCosts–Referstoexpendituresthatcanbedirectlychargedtoaspecificcontract,grant,orprogram.Encumbrance-Afirmcommitmentorobligationplacedagainstfundsofadepartment,intheformofpurchaseordersoragreements,tocoveralaterexpenditurerequiredwhengoodsaredeliveredorservicesrendered.Encumbrances(orliens)areusedtoreflectthosecommitmentsintheaccountingsystemandattempttopreventoverspending.Expenditures-Referstoactualexpenditures(spending)ofallfundsbudgetedandnon-budgeted.FiscalYear-FortheUniversityofCaliforniathefiscalyearbeginsJuly1andendsthefollowingJune30.FullAccountingUnit(FAU)-Identifiesthelocation,account,fund,sub-account,andobjectcodeofaspecifictransaction.Functions-TheUniversityclassifiesitsactivitiesandappropriatefundsaccordingtomajorfunctions.Thefirsttwodigitsofthesix-digitexpenditureAccountCodeidentifythesefunctions.SeeAppendix#2fordescriptionsofindividualfunctions.Funds-Afundisestablishedtocarryonspecificactivitiesorattaincertainobjectivesintheoperationofaninstitution,eitheratthediscretionofthegoverningboardoraccordingtoregulations,restrictions,orlimitationsimposedbysourcesoutsidetheinstitution.Thus,thecharacteristicsthatdistinguishesonefundfromanotheriswhatitcanbeusedforanditssource.Garamendi-CaliforniaGovernmentCode,Section15820.21,alsoknownasthe“Garamendi”BondAct,wassignedintolawbytheGovernoronJuly10,1990.Thisactallowsfinancingfor

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theacquisitionofland,buildings,relatedinfrastructureandequipment,andtheconstruction,renovation,andequippingofscientificresearchfacilitiesandrelatedinfrastructureonsitesownedorleasedfortheUniversityofCalifornia.Thefinancingandallbuildingmaintenance(OMP)aretobefundedfromtheincreaseinFederalindirectcostrecoveryduetothenewresearchresultingfromtheproject.GeneralLedger-TheCampusGeneralLedgeristheofficialfinancialrecordforthecampus,andfromitallofficialcampusaccountingreportsarecreated.Itincludesinformationonexpenditures,appropriations,andliens.Income-Revenuegeneratedfromsalestonon-university(department)clientele.Forexample,asciencedepartmentatUCSBhasalaboratorythatalocalresearchcompanyuses,thusgeneratingincomeforthedepartment.ThelargestgeneratorsofincomearetheUniversityCenter,studenthousingprogram,andparkingservices.IndirectCosts-Coststhatcannotbereadilyidentifiedwithorrelatedtoaspecificenterprise.Thesecostsarerelatedtotheservicesgenerallyprovidedwithoutchargebycentralcampusunits.Thisincludesbuildingandequipmentuse,maintenanceandoperationofplant,departmentaladministration,generaladministration,studentservicesandlibrary.Lien-seeEncumbrance.MandatoryStudentFees–FeesapprovedbyTheRegentsandchargedtoallUCstudents.SeeStudentServicesFeeandTuitionformorespecifics.Non-residenttuitionisalsoamandatoryfeeforasubsetofUCstudents.MeritIncrease–Salaryincreasesforcareeremployeesonthebasisofindividualperformanceandimprovementinperformance.MinorCapitalImprovementProject-Capitalimprovementscostingover$35,000andnotmorethan$750,000fromallsources.ThisthresholdissetbytheStateandmaybeadjustedfromtimetotimebyUCOPafterconsultationwiththeState.TheUniversityhistoricallyhaskeptitsdefinitionofminorcapitalimprovementprojectsinlinewiththatoftheState.MajorCapitalImprovementProject-Majorcapitalimprovementprojectsarecapitalimprovementscostingover$750,000fromallsources.ThisthresholdissetbytheStateandisadjustedfromtimetotime.TheUniversityhistoricallyhaskeptitsdefinitionofmajorcapitalimprovementprojectsinlinewiththatoftheState.NonresidentTuition–AmandatoryfeechargedtoundergraduateandgraduatestudentswhoarenotresidentsofCaliforniawiththefeelevelsetbyTheRegents.Nonresidentstudentspaythisfeeinadditiontoothermandatorystudentfees.Non-StateFundedAdministrativeSupport(NSFAS)–Assessment(tax)ofnon-state-fundedunits

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fortheirfairshareportionsofcampusinfrastructureand“overhead”costs.Unitsassessedinclude:ExtendedLearningServices,Housing,Parking,etc.ObjectCode–four-digitcodeusedforthenaturalclassificationofexpendituresbyobject,i.e.,it“identifiesthatwhichisreceivedinreturnfortheexpenditures.”Usedtoaccumulateexpendituresfortheannualfinancialreportandforspecialstudiesofexpenditures.Everyfinancialentrytoexpenditureaccountsmusthaveanobjectcode.Departmentsshouldavoidclassifyingcostsas“miscellaneousexpenses”andusingobjectcode7200.One-Time–Referstotheallocationoffundsforatemporaryorone-timeexpense.OngoingRequests-Arequestforanaugmentationtotheannualbasebudgetofagivendepartmentforaspecificongoingexpense.Ifapproved,theexpensewillbecomeapermanentlybudgeteditem.OpenProvision-Referstoabudgetedunfilledposition.OperatingBudget-Theamountoffundsallocatedtoadepartment,unitorarea.Thesefundsmayeitherbepermanentlyortemporarilybudgeted.SeeAppropriation.Overhead–AnassessmentonthedirectcostsincurredoncontractsandgrantstoreimbursetheUniversityforrelatedcostsof:GeneralAdministration,andfacilityoperations.Alsoknownas“IDC,”forindirectcosts.Permanent-Permanentfundsarebudgetedfunds;theyappearautomaticallyaspartofadepartment’sallocationatthebeginningofthefiscalyear.ProvisionAccount-Holdingaccountuseduntilfinalallocationdecisionsaremade.Afterdecisionsaremadefundsareallocatedfromaprovisionaccountintoanexpenditureaccount.RangeAdjustment–Universitysalaryrangesareperiodicallyadjustedtoreflectcomparablepayforsimilarworkandtomaintainparitywithcomparableinstitutions.FundingforsalaryrangeadjustmentsisnormallyprovidedbytheStateofCaliforniaforGeneralFundemployees;non-GeneralFundedactivitiesarerequiredtocoverincreasesfromwithintheirfundsources.Recharge-Theassessmentandcollectionbyonecampusaccountofachargeforgoodsand/orservices,basedonanidentifiableunitofmeasure,furnishedtoanothercampusaccount.Thisincludesfacilitiesmanagement,transportation,communications,etc.Reclassification–Referstoanadjustmentofthesalaryrangeforapositionorrelatedpositionswhentherehavebeensignificantchangesinthedutiesandresponsibilitiesofsuchpositions.Fundingofreclassificationsistheresponsibilityoftheindividual’sdepartment.StudentServicesFee(SSF)–Thisisasystemwidemandatoryfee,andthefeelevelissetbyThe

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Regents.TheStudentServicesFeeisusedtosupportavarietyofstudentserviceactivitiessuchascounselingandcareerguidance,culturalandsocialactivities,andstudenthealthservices.TheStudentFeeAdvisoryCommittee(comprisedofstudents,faculty,andstaff)providesadvicetotheVCStudentAffairsandtheChancellorontheallocationofthesefunds.Self-Supporting–Operationsthataredependentuponuserfeesandthedemandforthoseservices.StudentFees–RevenuefromstudentfeesisamajorsourceoffundingfortheUniversity’scoreeducationalprogram,providingfundingtosupplementStatefundingandothersourcesandhelpsupportbasicoperations.StudentsattheUniversityofCaliforniapaymandatory,campusbased,andcoursematerialfees.Eachofthesefeeshavedifferentpurposesandapprovalprocesses.StudentFinancialAid-Fundingprovidedtostudentsintheformofscholarship,fellowships,grants,loans,andwork-studyjobstoassistinmeetingthecostoftheireducation.Financialaidcomesfromthefederalgovernment,thestate,theuniversityandprivateagencies.Sub-account-TheexpenditureaccountsofCurrentFundsandPlantFundsarebrokendownontheledgerbysubaccount(orsub-budget),whichrepresentsthegeneralobjectoftheexpenditureswithinaspecificaccountsuchassalaries,benefits,andsupplies.Thesubaccountclassificationpermitscloserbudgetarycontrolandfacilitatesthepreparationofbudgetaryandfinancialreports.Temporary–Referstoanallocationoffundsonaone-timebasisoranexpensethatoccursinasinglefiscalyear(i.e.notpermanentorongoing).TransferofExpense–Allowsforthetransferofnon-payrollexpendituresrecordedinthegeneralledger.Theexpensemustbealegitimatechargeagainstthefundandsubtowhichtheexpenseistransferred.TransferofFunds-Transferofanappropriationfromoneaccountorsub-accounttoanother.TurnoverSavings–Turnoversavingsresultwhenapositionbecomesvacant.Itrepresentsthedifferencebetweenthelastsalarypaidtoanemployeeandthenewopenprovisionbudgetedamount.Openprovisionsforstaffemployeesarebudgetedat25%intotherangeoftheposition.Tuition(formerlyEducationalFee)–Thisisasystemwidemandatoryfee.Firstestablishedin1970andchargedtoallregisteredstudents,providesgeneralsupportfortheUniversity’soperatingbudget,includingcostsrelatedtogeneralcampusandhealthsciencesfacultyandinstructionalsupport;librariesandotheracademicsupport;studentservices;institutionalsupport;andoperationandmaintenanceofplant.Tuitionrevenueisalsousedtoprovidestudentfinancialaid.

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Appendix2FunctionDescriptions

TheUniversityclassifiesitsactivitiesandappropriatefundsaccordingtomajorfunctions.Thefirsttwodigitsofthesix-digitexpenditureAccountCodeidentifythesefunctionsandcorrespondstothefirsttwodigitsoftheUAScode.FunctionCodesareshownbelow:40 Instruction&ResearchThegeneralcampusinstructionandresearch(I&R)budgetincludesmostofthedirectinstructionalresourcesassociatedwiththeschoolsandcollegeslocatedontheUCgeneralcampuses.Themajoritemsinthisbudgetarefacultyandteachingassistants,instructionalsupport,andemployeebenefits.41 SummerSessionsUniversityofCaliforniaSummerSessionsareself-supportingprogramsofferingcoursesbothfordegreecreditandforselectedspecializedprograms.Thesummerdegreeprogramsofferarangeofinstruction,witheachcampusdeterminingitsowncourseofferings.43 AcademicSupport-OtherIncludedinthecategoryAcademicSupport-Otherarevarioussupportactivitiesthatareoperatedandadministeredinconjunctionwithschoolsanddepartments.Thesepartiallyself-supportingactivitiesprovidebasicclinicalandothersupportessentialtoinstructionalprograms,andcontributesignificantlytothequalityandeffectivenessofhealthsciencesandgeneralcampuscurricula.Statesupportisanessentialpartoftheincomeoftheclinicalactivities.ExamplesofsuchactivitiesatUCSBincludePhysicsStores,Vivarium,andChemistryStores.44 ResearchTheUniversityisdesignatedinthe1960CaliforniaMasterPlanforHigherEducationas“theprimaryState-supportedacademicagencyforresearch.”Asoneofthenation’spreeminentresearchinstitutions,theUniversityprovidesauniqueenvironmentinwhichleadingscholarsandpromisingstudentsstrivetoexpandfundamentalknowledgeofhumannature,society,andthenaturalworld.60 LibrariesTheUniversityofCalifornialibrariesareavitalacademicresource.Theyprovidebooks,documentarymaterials,andinformationrequiredbystudentsandfacultyforeffectivestudyandresearch.Inaddition,thelibrariesprovideservicestostudentsandfacultyofotherCaliforniacollegesanduniversitiesandtocitizensinthesurroundingcommunities.

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61 UniversityExtensionUniversityExtensionisaself-supportingoperationanditsofferingsaredependentuponuserdemandandabilitytopayfees.ExtensionprogramsareofferedbyeverycampusexceptSanFrancisco.Thereareseveralstatewideprograms,includingContinuingEducationoftheBar,theExtensionMediaCenter,andIndependentStudy,whichprovidescorrespondencecoursesthroughouttheworld.Two-thirdsoftheExtension’sofferingsaredesignedtoservethecontinuingeducationalneedsofprofessionals.62 PublicServicePublicserviceincludesabroadrangeofactivitiesorganizedbytheUniversitytoservelocalcommunities,studentsandteachersintheschoolsandcommunitycolleges,andthepublicingeneral.CooperativeExtensionistheUniversity’slargestpublicserviceprogram.Campuspublicservice,whichisalmostcompletelysupportedbyuserfeesandothernon-Statefundssources,includessuchactivitiesasartsandlectureprogramsandcommunityserviceprojects.TheUCSBArtsandLecturesProgramisanexampleofanactivityidentifiedwithinthisfunction.64 Operation&MaintenanceofPlantThisprogramprovidesfortheoperationandmaintenanceof37.5milliongrosssquarefeetofState-supportedbuildingsandmorethan2,200acresofimprovedgroundsatUCcampusesandtheagriculturalfieldstations.Programresourcesarededicatedtothemaintenanceofreasonablestandardsofrepair,safety,productivity,utilitiesservice,cleanliness,andappearanceforUniversityfacilitieswithacurrentreplacementvalueinexcessof$5.1billion.68 StudentServicesStudentservicesprogramsandactivitiescontributetostudents’intellectual,cultural,andsocialdevelopmentoutsideoftheformalinstructionalprocess.Examplesofstudentservicesincludecounselingandcareerguidance,studenthealthservices,socialandculturalactivities,admissionandregistraroperations,andfinancialaidandloancollectionadministration.66 GeneralAdministration&72InstitutionalSupportInstitutionalSupportincludescampusandsystemwidemanagementandconsistsoffivesubprogramareas:ExecutiveManagement,FiscalOperations,GeneralAdministrativeServices,LogisticalServices,andCommunityRelations.Eachofthesubprogramareascontainsanumberofactivities,suchastheofficesoftheChancellors,ViceChancellor,andplanningandbudgetwithinExecutiveManagement;accounting,audits,andcontractandgrantadministrationwithinFiscalOperations;computercenters,informationsystems,andpersonnelwithinGeneralAdministrativeServices;purchasing,maildistribution,andpolicewithinLogisticalServices;anddevelopmentandpublicationswithinCommunityRelations.76 AuxiliaryEnterprisesAuxiliaryenterprisesarenon-instructionalsupportservicesprovidedprimarilytostudentsinreturnforspecificcharges.Auxiliaryenterprisesgeneratesufficientrevenuestocoveralldirectandindirectoperatingcosts.Includedwithinauxiliaryenterprisesareresidenceanddininghalls,parkingoperations,andbookstores.NoStatefundsareprovidedforauxiliaryenterprises.

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Theannualbudgetisbaseduponincomeprojections.Anybudgetincreasesarematchedbycorrespondingincreasesinrevenue.78 StudentFinancialAidStudentsattheUniversityofCaliforniareceivescholarships,fellowships,grants,loans,andwork-studyjobstoassisttheminmeetingthecostoftheireducation.FinancialassistancecomesfromtheFederalgovernment,theUniversity,theState,andprivateandoutsideagencies.80 ProvisionsforAllocationProvisionsforallocationserveasatemporaryrepositoryforcertainfundsuntilfinalallocationdecisionsaremade.Eachyear,fundsreceivedforsalaryrangeadjustmentandmeritincreases,employeebenefitincreases,andpriceincreasesareheldinprovisionaccounts,eitherattheOfficeofthePresidentoronthecampuses,pendingdecisionsregardingtheirallocation.Salaryrangeadjustmentfunds,asanexample,arehelduntiltheappropriatesalaryincreaseshavebeennegotiatedordeterminedforthevariousclassesofemployees.Afterdecisionsaremade,fundsareallocated,first,fromanOfficeofthePresidentprovisionaccounttocampusprovisioncampusaccounts,andthentodepartmentswherethesalariesofthepositionstoberange-adjustedarebudgeted.

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Appendix3Fund Information

Endowments-Fundsderivedfromgiftsandbequeststhatstipulatethattheprincipalmustremainintactandthatonlytheincomegeneratedthroughinvestmentmaybeexpended.Endowmentfundsarefurtherclassifiedaccordingtorestrictionsontheuseofincome,suchasforstudentaid,libraries,orforspecificdepartments.IndirectCostRecoveryorOverhead–Referencesfunds(seebelow)associatedwiththechargingofoverheadprimarilyagainstcontractandgrants.Thesefundsreimbursethecampusforcostsoffacilitiesandadministrationassociatedwitharesearchactivity,butthatcannotbeidentifiedassolelybenefitingaparticularcontractorgrant.Thisincludesbuildingandequipmentuse,maintenanceandoperationofplant,departmentaladministration,generaladministration,studentservicesandlibrary.Thisfundgroupingincludes:

1) Garamendi-CaliforniaGovernmentCode,Section15820.21,alsoknownasthe“Garamendi”BondAct,wassignedintolawbytheGovernoronJuly10,1990.Thisactallowsfinancingfortheacquisitionofland,buildings,relatedinfrastructureandequipment,andtheconstruction,renovation,andequippingofscientificresearchfacilitiesandrelatedinfrastructureonsitesownedorleasedfortheUniversityofCalifornia.Thefinancingandallbuildingmaintenance(OMP)aretobefundedfromtheincreaseinFederalindirectcostrecoveryduetothenewresearchresultingfromtheproject.

2) Contract&GrantOverhead(Fund#69750)-ContractandGrantOverheadFundsare

derivedfromtheindirectcostschargedtoFederalcontractsandgrants.Thefirst19.9%ofeachcampuses'indirectcostrecoveryisallocatedtothisprogram.Thesefundsaretypicallydistributedtodepartmentsandadministrativeunitswhoseresourcesareusedinobtainingandadministeringextramuralfunds.UCSBofficesthathavepermanentallocationsofthesefundsincludeAccounting,OrganizedResearch,EnvironmentalHealthandSafety,AnimalResourceCenter,Purchasing,InternalAudit,BusinessandFinancialServices,andHumanResources.

3) OpportunityFunds(Fund#07427)-TheUniversityOpportunityFundwasestablishedin

March1970bytheRegents.ThefundconsistsoftheUniversity’sshare(45%)oftheindirectcostrecoveryreceiptsofFederalcontractsandgrantsafterdeductingallocationsforContractsandGrantsAdministrationandtheNeuro-PsychiatricInstitutes.ThefundisusedtosupporthighpriorityprogramsforwhichStatefundingisnotavailable,includinginstruction,research,institutionalsupport,anddeferredmaintenance.

GeneralFunds–ThecombinationofStateFundsandUCGeneralFundsarecommonlyreferredtoasGeneralFundsandusedtosupportthegeneralmissionoftheUniversity.

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1) StateFunds–PartofGeneralFunds,thesearefundsprovidedbytheStateandspentwithintheoverallconstraintsoftheapprovedStatebudget.

2) UCGeneralFunds–InadditiontoStateGeneralFundsupport,certainotherfund

sourcesareunrestrictedandexpectedtoprovidegeneralsupportfortheUniversity’scoremissionactivities,basedonlongstandingagreementswiththeState.CollectivelyreferredtoasUCGeneralFundstheseincludeaportionofindirectcostrecoveryonfederalandStatecontractsandgrants,nonresidentsupplementaltuition,feesforapplicationforadmission,andinterestonGeneralFundbalances.

StudentFees-ThemajorsourceoffundingfortheUniversity’scoreeducationalprogram,providingfundingtosupplementStatefundingandothersourcesandhelpsupportbasicoperationsbothacademicandstudentsupportservices.StudentsattheUniversityofCaliforniapaymandatory,campusbased,andcoursematerialfees.Eachofthesefeeshavedifferentpurposesandapprovalprocesses.Inaddition,UniversityExtensionandSummerSessionschargefeestosupporttheirprograms.Thisfundgroupingincludes:

1) Tuition(formerlyEducationalFee)–Thisisasystemwidemandatoryfee.Firstestablishedin1970andchargedtoallregisteredstudents,providesgeneralsupportfortheUniversity’soperatingbudget,includingcostsrelatedtogeneralcampusandhealthsciencesfacultyandinstructionalsupport;librariesandotheracademicsupport;studentservices;institutionalsupport;andoperationandmaintenanceofplant.Tuitionrevenueisalsousedtoprovidestudentfinancialaid.

2) StudentServicesFee(SSF)–Thisisasystemwidemandatoryfee,andthefeelevelisset

byTheRegents.TheStudentServicesFeeisusedtosupportavarietyofstudentserviceactivitiessuchascounselingandcareerguidance,culturalandsocialactivities,andstudenthealthservices.

3) NonresidentTuition–Amandatoryfeechargedtoundergraduateandgraduate

studentswhoarenotresidentsofCaliforniawiththefeelevelsetbyTheRegents.Nonresidentstudentspaythisfeeinadditiontoothermandatorystudentfees.

4) CampusBasedFees–Thesearefeesinitiatedandapprovedbystudentsforaspecific

purposeviaastudentreferendum,andlaterapprovedbyTheRegents.Thefeesaremandatoryasaconditionofenrollmentandcoveravarietyofstudent-relatedexpenses.Therevenuesmustbeusedconsistentwiththetermsofthereferendum.

Income-Revenuegeneratedfromsalestonon-universityclientele.Forexample,asciencedepartmentatUCSBhasalaboratorythatalocalresearchcompanyuses,thusgeneratingincomeforthedepartment.AuxiliaryEnterprises(StudentHousing,UniversityCenter,Parking,etc.)tendtobethelargestgeneratorsofincomeonthecampus.Therevenuetypicallygoestosupporttheoperationsandcapitalneeds,includingdebt,oftheseprograms.

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Recharge-Theassessmentandcollectionbyonecampusaccountofachargeforgoodsand/orservices,basedonanidentifiableunitofmeasure,furnishedtoanothercampusaccount.Thisincludesfacilitiesmanagement,transportation,communications,etc.Itisverycommonforarechargeaccounttoalsohaveanincomecomponent.

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Appendix4Sub-AccountDescriptions

TheexpenditureaccountsofCurrentFundsarebrokendownontheledgerbysub-account(orsub-budget),whichrepresentsthegeneralobjectoftheexpenditureswithinaspecificaccount.Thesubaccountclassificationpermitscloserbudgetarycontrolandfacilitatesthepreparationofbudgetaryandfinancialreports.ThesubaccountclassificationsofCurrentFundsare:Sub0-AcademicSalariesSub1-Staff(Non-Academic)SalariesSub2-GeneralAssistanceSub3-SuppliesandExpenseSub4-EquipmentandFacilitiesSub5-SpecialItems-intheContractandGrantarea,Sub5usuallyidentifiesTravelSub6-EmployeeBenefits,exceptinFunction78-StudentAid,whereitidentifiesTuitionandFees.Sub7-SpecialItemsSub8-UnallocatedFundsSub9-RechargestoOtherDepartmentsSubY-Overhead

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Appendix5SALARY&BENEFITRELATEDTERMS

Benefits–Aspartofthetotalcompensationpackageforfacultyandstaff,theUniversityoffersretirement,healthandwelfarebenefits.ThecostsofthesebenefitsarefundedbytheUniversityand/orinconjunctionwithemployeecontributions.Includedamongthesebenefitsare:

1) Pension–Contributionsarepaidbyboththeemployerandtheemployee,

2) HealthandWelfareBenefits–Paidbyboththeemployerandemployee.RatesaredrivenbynegotiationswithUC’shealthplanproviders.

ContractualWageAdjustments–Theseincreasesareestablishedthroughcollectivebargainingagreements.EquityAdjustments–Thesehelpbringindividualsalariestoacompetitivemarketlevelforindividualemployeesinjobswithsignificantexternalmarketgapsand/orinternalequityissues,oraddressrecruitmentandretentionchallenges.Theseadjustmentsarenotfundedcentrallyandwhenimplemented,arethefundingresponsibilityofindividualdepartments.Merits–Theseincreasesforfacultyandunrepresentedstaffprovideamechanismtorecognizeandrewardrelativelevelsofperformance.Increasesaregrantedtoemployeesonthebasisofindividualperformanceandimprovementinperformance.Meritincreasesareneverautomaticandarebasedondemonstratedcontributions.RangeAdjustments-Universitysalaryrangesareadjustedtoreflectcomparablepayforsimilarworkingovernmentandprivateindustryor,asinthecaseforacademicsalaries,tomaintainparitywithcomparableinstitutions.FundingforsalaryrangeadjustmentsisnormallyprovidedbytheStateofCaliforniaforGeneralFundemployees;non-GeneralFundedactivitiesarerequiredtocoverincreasesfromwithintheirfundsources.Union-relatedwageincreasesrepresentchangestounion-relatedwagescalesandaregenerallyrelatedtoindustry-widewageratesfortheseclasses.Union-relatedwageincreasesforGeneralFundactivitiesarefinancedfromrangefundswhenthereisageneralsalaryrangeadjustmentforStateemployees.Ifthereisnogeneralsalaryrangeadjustment,thecostofnegotiatedwagerateincreasesifapprovedmustbeabsorbedwithintheapprovedbudgets.Reclasses-Referstoanadjustmentofthesalaryrangeforapositionorrelatedpositionswhentherehavebeensignificantchangesinthedutiesandresponsibilitiesofsuchpositions.Currentpolicyprovidesthatreclassificationsmaybegrantedatanypointinthefiscalyearwhenthedutiesandresponsibilitiesofaparticularpositionshallhavebeendeterminedtomeetestablishedrequirementsandspecificationsofaclassificationinahigherorlowersalaryrange.

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UnlikemeritincreasesforwhichtheStateprovidesspecificfunding,fundsforreclassificationsarewhollygeneratedwithintheUniversity.WhiletheStaterecognizesthecostsofpositionreclassifications,itdoesnotallocatefundsspecificallyforreclassificationsintheannualbudgetprocess.ReclassificationsofGeneralFundpositionsareprimarilyfundedfromstaffsalaryturnoversavingsthataregeneratedannuallyonJuly1.TheseJuly1savingscomprisemeritfundsawardedinprioryears,whicharereleasedthroughreductionofvacatedstaffpositionstominimumstepand,toalesserextent,fromdownwardreclassifications.TurnoverSavings-Differencebetweenthelastsalarypaidemployeeandthenewopenprovisionamountonprovisionsfundedfrombudgetedfunds.Turnoversavingsresultwhenareplacementishiredatalowersalarylevelthanthepreviousincumbent.BeginninginFY2014-15staffturnoversavings,bothcurrentyearandongoing,isretainedatthedepartmentanddoesnotneedtobereturnedtoacentralcampusprovisionaccount.Thesesavingscanbeusedtosupportotherdepartmentalneeds.