Finance at Clemson University Brett A Dalton Chief

Finance at Clemson University Brett A. Dalton Chief Financial Officer G 06 Sikes Hall Clemson, SC 29634

A Primer on Public Higher Education Budgeting Focus: Clemson University Budgeting Policies, Practices, & Trends

Primary Components of a Public University Budget Unrestricted = 77% Education and General = 55% Public Service Activities = 9% Auxiliary Operations = 13% Restricted = 23% Grants and Contract = 10% Restricted Scholarships, Gifts or Endowment = 13%

Primary components of a Public University Budget Unrestricted Education and General (The CORE) Most common functions and activities INSTRUCTION “Un-funded” research & service Academic and Student Services, Institutional Support, etc… Mission-related self supporting activities: summer camps, professional development activities, certificate programs, etc… Library services and resources Facility support

Primary components of a Public University Budget Unrestricted Education and General: Revenue Sources State Appropriations Tuition and Fees Laboratory Fees Self-generated departmental funds (short courses, seminars, camps, sales and services…) F&A Recoveries (reimbursement of E&G expenditures to support grant and contract activity) Recreation, student organizations, and other miscellaneous fees

Primary components of a Public University Budget Public Service Activities (Land Grant Mission) PSA Activities and Functions College and departmental public service and land grant research activities (primarily CAFLS) Extension Service Agricultural Research and Education Centers Support activities of PSA Revenue Sources: • • State Appropriations Federal Appropriations Self-generated funds Fees for services

Primary components of a Public University Budget Auxiliary Operations: (Self-supporting ancillary support services and functions) Housing Food Service Athletics Redfern Telecommunications Revenue Sources: User fees, sales and services, licensing revenue

Primary Components of a Public University Budget Restricted Funds Grants and Contracts Restricted Gift or Endowment Funded Activities

Unrestricted Budget Development General Operating “Policies” • Budgetary Authority resides at VP level: • Example: Provost has ultimate authority over all college and academic support units • Within a college - Dean has authority • Clemson provides significant autonomy over unit budgets: Block Budgeting • Unlike many institutions, Clemson does not control budgets at the “line item” level • Incentive and “self-generated” components are driven by departmental activity – but controlled at the Dean / VP level

E&G Unrestricted Budget Development Academic Units “Base Budget” Components • “Fixed” Base • State Appropriations – typically lump sum (periodic earmarks) • Student Tuition and Fee Revenues for Fall and Spring • Not formula driven • • Strategic Allocations or reallocations “Fixed” Bases established by President and Adm Council at the VP level • VP’s establish sub-unit bases such as College, Departmental, or Division level • “Variable” Base • Lab Fees (50% colleges for expendables / 50% Provost for class and lab equipment & infrastructure) • F&A Recoveries (detailed slide to come) • Earmarked Fees: IT, Library, Student Organizations

Academic Units “Self-supporting” components • ODCE: 90%Colleges / 10% CCIT • Departmental sales, services, activities 100% Colleges • Summer School • • 61% Colleges (51% AAH w/ increased base) 2% Undergraduate Studies 4% Library Remainder supports Total University Budget

E&G Budget Development Non-Academic Units Base Budget” Components • “Fixed” Base: primarily salary driven • Variable Base: few units have variable components – exceptions include • • VPR (F&A) • • • CCIT: IT Fee Student Affairs (earmarked fees – recreation, medical, student organizations) Admissions: Application Fee Registrar: Transcript Fee

E&G Budget Development Non-Academic Units “Self-supporting” components • Sales and services: some examples • • The Madren Center (Advancement Div. ) CCIT: Apple Store Research Services: sale of research specimens and services FMO: work for departments and auxiliaries

PSA Budget Development PSA base budgets: • • State appropriated funds are program and activity specific Federal appropriations are program and activity specific • PSA budgets follow the same general policies and procedures as E&G Budgets with regard to self-generated funds • PSA F&A shown on hand-out • PSA budgetary authority resides at VP for PSA level

A Deeper Look at F&A Recoveries

PI – 20% Non-Centers: Dept – 10% Dean – 10% Vice President of PSA – 60% PSA Center – 50% Centers/Institutes: Allocable F&A Recoveries Vice President of PSA – 50% PI – 20% Dept – 10% Non-Centers: Dean – 10% VPR – ~ 60% E&G Centers/Institutes: Center – 50% VPR – ~50% University Central -Support to E&G

F&A Observations F&A allocated to University Support helps fund all E&G budgets on campus F&A allocations to VPR support initiatives such as: College Research support Grant Cost Sharing 10% return to Centers and Institutes Advanced Materials Research Lab Research Compliance One-time funding for special projects: Computational Center, CUICAR, Electron Microscope, and etc…

Clemson University Operating Budget Fiscal Year 2010 -2011: Total Operating Resources Revenue Source FY 2010 -2011 Proposed Budget FY 2009 -2010 Revised Initial Budget Change Percent Change State Appropriations $90, 648 $124, 744 $(34, 096) (27. 3)% Federal Appropriations $11, 964 $11, 559 $405 3. 5% Federal Stimulus $19, 085 $17, 192 $1, 893 11. 0% $267, 344 $234, 195 $33, 149 14. 2% $12, 100 $10, 940 $1, 160 10. 6% $116, 409 $114, 946 $1, 463 1. 3% $21, 315 $21, 827 $(512) (2. 3)% $538, 865 $535, 403 $3, 462 0. 6% $35, 667 $18, 795 $16, 872 n/a Total Unrestricted Revenue & Fund Balance Resources $574, 532 $554, 198 $20, 334 3. 7% Financial Aid-State Higher Ed Grants $46, 046 $37, 367 $8, 679 23. 2% Financial Aid-Grants & Contracts & Other Revenues $40, 415 $34, 517 $5, 898 17. 1% Grants & Contracts $93, 098 $87, 531 $5, 567 6. 4% $2, 347 $1, 261 $1, 086 86. 1% Total Restricted Resources $181, 906 $160, 676 $21, 230 13. 2% Total Operating Resources before Non. Cash Items $756, 438 $714, 874 $41, 564 5. 8% $40, 944 $40, 249 $695 1. 7% $797, 382 $755, 123 $42, 259 5. 6% Student Fees Facilities & Administrative Cost Recoveries Sales & Services Other University Generated Total Unrestricted Revenue Fund Balance Resources Other Restricted Revenue (excludes Financial Aid) Waivers (Non-Cash) Total Operating Resources by Source

Clemson University Operating Budget Fiscal Year 2010 -2011: Total Operating Resources FY 2011 FY 2010

State Appropriations Recurring State Appropriations Education Public Service and General Activities Total FY 2008 $112. 9 $52. 1 $165. 0 FY 2009 $86. 0 $40. 7 $126. 7 FY 2010 $78. 5 $34. 9 $113. 4 $62. 7 $(50. 2) (44. 5%) $28. 5 $(23. 6) (45. 3%) $91. 1 $(73. 9) (44. 8%) FY 2011 Change FY 08 - 11 % Change FY 08 - 11 Unprecedented cuts of $73. 9 M since FY 2008. Clemson received stimulus funding of $14. 7 M in FY 2010 and $19. 1 M in FY 2011. Stimulus funding no longer available beginning in FY 2012. Represents 11. 3% of Clemson’s FY 2011 operating budget vs. more than 40% in the late 1980’s

Magnitude of E&G State Funding Cuts $50. 2 M cut to Clemson’s recurring Educational & General State funding since June 30, 2008. 44. 5% cumulative cut to base State funding. The cuts exceed: The total budget of four of the University’s five colleges The combined budgets of HEHD, Student Affairs, and the Library The combined budgets of all four Institutional Support units and the Computer Center The combined budgets of Facilities, Utilities, and the Provost and Academic Affairs. FY 2011 nominal E&G State Appropriations are 15. 3% less than in FY 1990.

Clemson State E&G Appropriations per Student (adjusted for inflation) $12, 000 $10, 000 $8, 000 $6, 000 Adjusted for inflation, Clemson receives approximately $3, 402 per student in state appropriations, down from $9, 600 in 1973 – a 65% decrease $4, 000 Inflation Adjusted E&G Appropriations per Student FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004 FY 2003 FY 2002 FY 2001 FY 2000 FY 1999 FY 1998 FY 1997 FY 1996 FY 1995 FY 1994 FY 1993 FY 1992 FY 1991 FY 1990 FY 1989 FY 1988 FY 1987 FY 1986 FY 1985 FY 1984 FY 1983 FY 1982 FY 1981 FY 1980 FY 1979 FY 1978 FY 1977 FY 1976 FY 1975 $0 FY 1974 $2, 000

Clemson University Operating Budget Fiscal Year 2010 -2011: Total Operating Uses - by Program FY 2010 -2011 FY 2009 -2010 Program Proposed Budget Revised Initial Budget Instruction $186, 488 $171, 548 Research $138, 016 $131, 854 Public Service $62, 386 $67, 404 Academic Support $41, 011 $36, 051 Institutional Support $25, 533 $31, 065 Student Services $26, 363 $25, 361 Auxiliary Enterprises $92, 346 $87, 706 Scholarships & Fellowships $86, 445 $70, 207 Operations & Maintenance $29, 887 $31, 164 Net Transfers $32, 296 $43, 719 Total Current Expense $720, 771 $696, 079 Fund Balance Resources $35, 667 $18, 795 Budget Percent Change $14, 940 8. 7% $6, 162 4. 7% $(5, 018) -(7. 4)% $4, 960 13. 8% $(5, 532) -(17. 8)% $1, 002 4. 0% $4, 640 5. 3% $16, 238 23. 1% $(1, 277) -(4. 1)% $(11, 423) -(26. 1)% $24, 692 3. 5% $16, 872 Total Restricted & Unrestricted Expense Non-Cash Uses $756, 438 $40, 944 $714, 874 $40, 249 $41, 564 $695 5. 8% 1. 7% Total Operating Uses By Program $797, 382 $755, 123 $42, 259 5. 6%

Clemson University Operating Budget Fiscal Year 2010 -2011: Total Operating Uses - by Program FY 2011 Non-Cash Fund Balance Waivers Resources 5. 1% Net Transfers 4. 5% Operations & 4. 1% Maintenance 3. 8% FY 2010 Instruction 23. 4% Scholarships & Fellowships 10. 8% Research 17. 3% Auxiliary Enterprises 11. 6% Non-Cash Fund Balance Waivers Resources Net Transfers 5. 3% 2. 5% 5. 8% Operations & Maintenance 4. 1% Instruction 22. 7% Scholarships & Fellowships 9. 3% Student Services Institutional 3. 3%Support 3. 2% Academic Support 5. 1% Public Service 7. 8% Research 17. 5% Auxiliary Enterprises 11. 6% Student Services Institutional 3. 4% Support 4. 1% Academic Support 4. 8% Public Service 8. 9%

Clemson University Operating Budget Fiscal Year 2010 -2011: Total Operating Uses - by Account FY 2011 FY 2010 Non-Cash Fund Balance Waivers Resources 5. 3% 2. 5% Non-Cash Fund Balance Waivers Resources 5. 1% 4. 5% Faculty & Unclassified Staff 20. 1% Other Costs (Recoveries & Net Transfers) 40. 2% Other Costs (Recoveries & Net Transfers) 40. 6% Classified Staff 11. 2% Faculty & Unclassified Staff 21. 4% Classified Staff 12. 1% Fringe Benefits 11. 6% Other Wages 7. 5% Other Wages 6. 5% Fringe Benefits 11. 4% Account Faculty & Unclassified Staff FY 2010 -2011 Proposed Budget FY 2009 -2010 Revised Initial Budget Change Percent Change $160, 211 $160, 793 $(582) (0. 4)% Classified Staff $89, 577 $91, 304 $(1. 727) (1. 9)% Other Wages $59, 616 $49, 122 $10, 494 21. 4% Fringe $90, 625 $87, 950 $2, 675 3. 0% $320, 742 $306, 910 $13, 832 4. 5% $35, 667 $18, 795 $16, 872 $756, 438 $714, 874 $41, 564 5. 8% $40, 944 $40, 249 $695 1. 7% $797, 382 $755, 123 $42, 259 5. 6% Other Costs & Recoveries Fund Balance Resources Total Restricted & Unrestricted Expense Non-Cash Uses Total Operating Uses by Account

Summary of FY 2010 -2011 Proposed Operating Budget Key observations from revenues projections: Minimal growth in unrestricted revenues at 0. 6% - less than inflation – less revenue than in 2008 State Appropriations anticipated to decline approximately $25 M on a recurring basis Partially offset for one year by $19. 1 in Stimulus funding General Fund student fee revenues projected to increase approximately $18 M Internal cuts and reallocations required to balance state cuts Restricted Revenues projected to grow 13. 2% Majority of the growth due to increased revenue earmarked to support financial aid/scholarships & fellowships $14. 6 M increase when including financial aid funded by state, federal and other external sources Growth of 6. 4% projected for Grants & Contracts revenue supporting sponsored research activities- $5. 6 M increase

Summary of FY 2010 -2011 Proposed Operating Budget Key observations from revenues projections: Combined Unrestricted and Restricted Revenues projected to increase only 3. 5% or $25 M – most all growth attributable to restricted sources Utilization of prior years’ fund balances provides for a 5. 6% increase in Total Sources of Funds for FY 2011

Summary of FY 2010 -2011 Proposed Operating Budget Key observations from expense projections: Programmatic Expenditures: 23. 1% projected increase in Scholarship & Fellowships: $16. 2 M increase $86. 4 M in FY 2011 vs $33. 9 M in FY 2000 – 155% increase Institutional Support (core administration) continues to be reduced: -$5. 5 M (17. 8% decrease) – accounts for just 3. 2% of total budget in 2011, down from 5. 3% in 1997 Continued cuts in Public Service expenditures: $5 M reduction Continued investment in core mission activities (Instruction, Research & Public Service): increase of $16. 1 M

Summary of FY 2010 -2011 Proposed Operating Budget Key observations from expense projections: Expenditures by Account: Minimal increases in Compensation & Benefits 1. 1% increase in base compensation costs Additional $6. 7 M in one-time salary and fringe costs projected for aggressive personnel reduction programs Unrestricted investments in permanent staff declined $2. 2 M, while dollars used to leverage temporary and student employees increased $4. 9 M Summary Observations: Total projected expenditures projected to increase approximately 5. 6 M% Growth attributable to: Increase in revenue and costs from restricted funds and activities One-time use of prior years’ fund balance Projected expenditures supported by increase in revenue

Resources Faculty Business Information System (FBIS) FBIS provides faculty and PIs access to information critical to performing their jobs at Clemson University. Information includes project financial amounts and employee effort and activity. Suggestions for new applications are welcomed. Current applications available through FBIS are: ØSponsored Program Grants Accounting ØClemson Link to Employee Activity Reports ØPrincipal Investigator Certification Program

Resources Faculty Business Information System (FBIS) cont’d Sponsored Program Grants Accounting Access to budget and expenditure information for faculty members u Examples of reports include: • Direct Budget Balance • Payroll by Person

Resources Faculty Business Information System (FBIS) cont’d Clemson Link to Employee Activity Reports (CLEAR) Access for certifying effort reports required for sponsored programs activity u Provides a link to the main CLEAR site • Login to CLEAR System • Deadlines for validating CLEAR • Uncertified CLEAR reports by college, department, and PI

Resources Faculty Business Information System (FBIS) cont’d Principal Investigator Certification Program Provides information regarding the administration of externally sponsored grants to assist faculty in understanding and adhering to State and Federal regulations • Login to PI Certification Program • Completed PI Certification list • FAQs regarding the program

Resources Faculty Business Information System (FBIS) cont’d üFBIS can be accessed from the Clemson University Site Index (alphabetically) or https: //virtssl. clemson. edu/oirssl/sp/ üContact Amy Madden (maddena) for assistance or to suggest additional applications.