All Funds Planning FY20 FY23 Kick-off Seminars Jan 27 & 28, - PowerPoint PPT Presentation

All Funds Planning FY20 – FY23 Kick-off Seminars Jan 27 & 28, 2020

FY2021 Budget Challenges / Considerations • UArizona Budget Environment • State Funding • Tuition & Fees • Planning Assumptions

SWOT Analysis – All Funds Planning FY20 – FY23

Net Tuition & Fees Flatten; State Appropriation Decreases

Critical Needs Addressed via FY20 Reallocations

FY 2020 – UArizona Revenue Sources, $2.2B

State of Arizona General Fund ($ millions)

UArizona State General Fund Appropriation

JLBC Revenue & Budget Update – Jan 23, 2020

JLBC Revenue & Budget Update – Jan 23, 2020 ($ millions)

JLBC Revenue & Budget Update – Jan 23, 2020

FY2021 State Budget Request

JLBC Presentation to Approps Committees

Net Revenue from Base Tuition FY 2012 - FY 2023 ($ millions) Projected Actuals

Base Tuition Revenues

The University of Arizona Annual Undergraduate Tuition & Mandatory Fees (Not Adjusted for Inflation) Source: AAUDE, Annual Academic Year Tuition Required Fees Note: UArizona total excludes Media, Wildcat, and Recreation Center Program Fees

The University of Arizona Annual Graduate Tuition & Mandatory Fees (Not Adjusted for Inflation) Source: AAUDE, Annual Academic Year Tuition Required Fees Note: UArizona total excludes Media, Wildcat, and Recreation Center Program Fees

Planning Assumptions FY21, FY22, FY23 • All units should plan for: • Base budget reductions & assessment changes as communicated in December • 2% pool for annual salary increase programs effective July 1 each year • Applicable UCAP & minimum wage adjustments • ERE rates as proposed for FY21 (not yet approved by Federal cognizant agency) • Colleges use fall term-end RCM projection model and estimate other non-RCM metrics/revenues • Support Units should plan base budget reductions of 4%, 2%, 0% for FY21, FY22, FY23 respectively based upon estimated reduced assessment revenue resulting from reduced undergraduate revenues

Planning Assumptions: Other Considerations • Online enrollments & revenues growing • Significant fund balances throughout the University • Sponsored projects funding is strong • Direct costs • Increased F&A • Philanthropy is increasing • Strategic plan impacts

Thank You!

Appendix

The Future

FY 2020 Operating Budget ($000) FY19 FY20 Actuals Revised Revenues State General Fund Appropriation 252,931 267,700 State GF Approp - Research Infrastructure 14,251 14,250 State GF Approp - Capital Infrastructure Fund 10,552 10,763 Tuition & fees 890,558 914,100 Less Scholarship Allowance (232,468) (256,000) Net Tuition and Fees 658,090 658,100 chg frm prior yr 0.7% 0.0% Grants & Contracts 707,000 721,900 Financial Aid Grants 56,907 57,900 Private Gifts (operating & capital gifts) 84,578 87,000 Technology & Research Initiative Fund (TRIF) 30,970 30,400 Auxiliary Revenues, Net 205,457 209,600 Other Revenue (no gifts) 166,921 166,900 Total Revenues 2,187,657 2,224,513 chg frm prior yr 3.0% 1.7% Expenses Salaries & Wages 1,027,003 1,042,400 Benefits (Includes OPEB) 313,970 318,700 All Other Operating 560,016 571,200 Schlrshps & Fellowships, Net of Schlrshp Allow 61,665 69,000 Depreciation 144,250 135,500 Interest on Indebtedness 55,072 77,040 Total Expenses 2,161,976 2,213,840 chg frm prior yr 4.9% 2.4% Net increase/(decrease) 25,681 10,673

FY2021 Governor’s Proposal

University Net Position ($ billions)

Days Cash On Hand FY 2008 – Est FY 2020 200 182 180 172 168 160 151 Days Cash on Hand 139 135 140 120 105 97 100 81 80 73 71 69 58 60 40 20 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Est

NEW SYSTEM & PROCESS, BUT WHY?

WHY? • Communication Tool (strategy, cost savings, successes, needs) • Proactive vs. Reactive Culture • Higher Education Climate (tuition, state support, enrollment trends, public confidence) • Fiduciary Responsibilities • Common Language, Platform, and Process • Align Finances With Strategy at All Levels of the University • Strategic Plan

PRIOR YEAR PROCESSES

PRIO YEAR PROCESSES • Local Fund Budget system • Auxiliary & Designated Funds Only Local Fund Budget • By Account and Sub Account (LFB) • By Summary Object Code • By Transfers In/Out • Narrative Component • Adaptive Planning • By Org or College/Division All Funds Multi-Year • By Summary Object Code Planning (AFMY) • Narrative Component • Planned use of reserve spreadsheet

NEW PROCESS

ALL FUNDS PLANNING • New software system: Budget & Planning System (Axiom) • Planning by Org, Planning Fund, and Budget Object (grouping of object codes) • No planning at the account level • No planning by budget shell codes • Narrative Component • Position level planning REQUIRED

ALL FUNDS PLANNING Five Primary Modules: • RCM Planning Module Data from these three modules feeds into • Labor Planning Module the Budgeting module • Budget Request Module • Budgeting Module The All Funds Planning Module is a summary module at the College/Division • All Funds Planning Module level and is where Strategic Narratives will be submitted

WHAT IT WILL LOOK LIKE RCM Planning/RCM Metrics Operating Budgets and Multi-Year Plans (Budgeting Labor Planning Module) By Organization By Planning Fund By Budget Object Budget Requests Strategic Narratives (part of All Funds Planning Module) Align Strategic Plans with Financial Plans

WHO WILL BE IMPACTED Questions to consider: College/Division • Who will input position level detail for the department? • Who will input operational and revenue projections for the Unit Head department? • Who will approve the budgets for the college/division? Finance Leader • How will you coordinate collaboration and communication Business Manager between all parties involved?

PLANNING ASSUMPTIONS

FY20 PLANNING ASSUMPTIONS Personnel Planning Assumption FY21 FY22 FY23 ERE Rate 31.0% 31.0% 31.0% Grad Tuition Increase (for Remission Calculation) 0% 0% 0% Minimum Wage - Effective January 1, 2020 $12.25/hr $12.50/hr $12.75/hr (Cost of Living Adjustment Formula Effective January 1, 2021) Unit Unit Unit UCAP Adjustments Specific Specific Specific Personal Services Increases 2% 2% 2% (Will Be Pre-loaded in Tool as “Calculated Pool” for FY21)

FY20 PLANNING ASSUMPTIONS Operating Budget Assumptions FY21 FY22 FY23 ASC (Revenue) - Effective January 1st (Previously 9.5%) 11% 11% 11% (blended rate if appropriate) ASC (Expense) - Effective January 1st (Previously 1%) 2% 2% 2% (blended rate if appropriate) Reduction in Allocated Revenue (Support Units) 4% 2% 0%

REQUESTING ACCESS

REQUESTING ACCESS Access must be requested through the Access Provisioning Tool:

TIMELINE

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RESOURCES

RESOURCES • Ambassadors across campus • Office Hours • Implementation Website: Terms & Definitions Guide, FAQs, Self-Paced Training Videos • Budget and Planning System (aka Axiom): Drill-through reports, Reconciliation reports, Crosswalk Reports, Test Environment

THANK YOU Office of Budget & Planning