Resource Allocation Planning Model
Transcript of Resource Allocation Planning Model
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Resource Allocation Planning ModelDeans' Retreat
June 30, 2020
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AgendaHuron has been pleased to partner with University of Colorado Colorado Springs to support its budget model
redesign initiative by facilitating a series of conversations with campus stakeholders through an inclusive and
iterative process.
▪ Retreat objectives
▪ Project goals and efforts to date
▪ Guiding principles
▪ Key model decisions
▪ Operationalizing the budget model
▪ Next steps
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Retreat ObjectivesHuron is pleased to share a proposed budget model that aligns with the project’s guiding principles.
Meeting goals:
1. Develop a clear understanding of model methodology and
incentives
2. Discuss refinements to date for an implementable budget
model
3. Review concepts to operationalize the proposed model,
including a suggested implementation timeline
4. Confirm next steps
Documents shared:
▪ Deans’ Retreat PowerPoint Slide Deck
▪ Budget Model Spreadsheet (current and prior version)
▪ Driver and Allocation Calculation Sheet
Key Questions for Retreat:
• Does the model adhere to
the guiding principles?
• Is the new model better than
the one that the University
uses today?
• Is this an appropriate model
to use for a parallel process
year?
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Guiding Principles – Common ThemesAt the outset of the project, Steering Committee members submitted proposals for guiding principles which would result in a collaborative, transparent, mission-driven process.
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Summary of Stakeholder FeedbackOver the last few months, as Huron has vetted various model concepts with campus units, stakeholders have
shared some concerns; the most significant topics are summarized below.
Topic Description
1Strategic Investment Fund
Deployment
▪ Stakeholders explained the need for transparency relative to the size and use of the
subvention fund and other strategic investments
2 Governance Structures▪ Deans commented on the importance of strong governance structures that drive
central unit efficiencies and support the long-term integrity of the model
3Model Supporting
Collaboration
▪ Stakeholders expressed a desire to ensure that the new model supports cross-
disciplinary collaboration rather than create competition
4Support for Core
Curriculum
▪ Stakeholders expressed the desire to sufficiently reward the colleges which have a
primary role in providing the core curriculum to students
5 Budgeting Process▪ Academic leaders stressed the need for new tools to support financial planning and
analysis, as well as the ability to retain operating surpluses for future year spending
6 Graduate Financial Aid
▪ Stakeholders expressed a desire to better understand the decision-making process
surrounding the allocation of graduate financial aid and its treatment in the budget
model
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Adopted Guiding PrinciplesThe following guiding principles were developed to guide decision-making throughout the development of the proposed budget model.
▪ Be transparent, offer consistent communications, and foster collaboration to instill trust between
decision-makers and stakeholders
▪ Align with the core mission and strategic plan and represent institutional values
▪ Enable and encourage budget management responsibility and accountability across units
▪ Provide an equitable, mission driven opportunity for resources to be allocated across units
▪ Encourage growth of net resources while also recognizing the role of support units in promoting student
success and other mission-critical outcomes
▪ Incorporate improved infrastructure and data-informed decision making, providing an understandable link
between resource allocation and revenue generation
▪ Encourage innovative practices while ensuring that the necessary budget allocation to existing core and
general education are sustained
As we discuss the model and plan for next steps, please continue to consider how the proposed budget model and budget
process aligns with these principles.
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Project TimelineSince the project start, Huron has met with over 40 stakeholders to ensure the proposed model meets campus needs. The current phase of the engagement is part of a broader five-phase approach necessary for the successful implementation of a redesigned budget model.
2019-2020 2020-2021
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Phase Overview
1. Due Diligence and Visioning Develop a clear understanding and vision through an assessment of current resource allocation practices.
2. Financial Modeling Build-out a “pro-forma” model to provide a platform for testing different model alternatives.
3. Stakeholder Engagement Address change management through methodical, data-driven stakeholder engagement.
4. Infrastructure Development Develop supporting tools, processes, and governance to carry out budget development.
5. Parallel Process Adjust roles, policies, and practices to prepare for the new model’s impact.
Visioning
Financial Modeling
Stakeholder Engagement
Infrastructure Development
Parallel Process
Budget Model Active
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Steering Committee MeetingsAt the outset of the project, University leadership established a Steering Committee to provide guidance for this
initiative, to review project status reports, and to validate the opportunities presented.
Steering Committee Meetings
No. Meeting Topics DescriptionScheduled
Date
1 Initiative Kick-OffEstablished project goals, timeline, and approach; discussed the importance
of guiding principlesDec 19
2Model Philosophy and
Structure Discussion
Reviewed interview themes, guiding principles, and the preliminary model
structure; discussed how units will be categorized within the model (i.e.
academic, auxiliary, and central support)
Jan 13
3Revenue & Cost Allocation
Discussion
Finalized guiding principles, discussed initial cost pools for central support
units, introduced revenue allocation methodologiesFeb 7
4Revenue & Cost Allocation
Discussion
Discussed model structure updates, continued revisions of revenue
allocations, and introduced potential cost pool allocationsFeb 21
5Revenue & Cost Allocation
DiscussionContinued discussions of revenue and cost pool allocations Mar 2
6Central Funding
Mechanism Introduction
Reviewed model structure and revenue and expense allocations, and
introduced central funding mechanismMar 16
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Steering Committee MeetingsAt the onset of the project, University leadership established a Steering Committee of faculty and staff to provide
guidance for this initiative, to review project status reports, and to validate the opportunities presented.
Steering Committee Meetings
No. Meeting Topics DescriptionScheduled
Date
7
Revenue & Cost
Allocations, Central
Funding Mechanism
Continued discussions of revenue and cost allocations and central funding
mechanismApr 3
8
Data Definitions, Cost
Pool Allocations, and
Central Funding
Mechanism
Discussed data definitions for inclusion within the model and central funding
mechanism, gave update on dean outreachApr 16
9Model Philosophy and
Structure Discussion
Recapped decision points and introduced budget model governance structure
and potential subcommitteesApr 23
10
Model Governance
Structure and Outstanding
Items
Continued discussion of potential model governance structure, recapped
decision points, and addressed outstanding itemsApr 30
11
Guiding Principles
Alignment & Dean
Outreach
Discussed alignment of model decision points with guiding principles and
began overview of material to be reviewed with deansMay 6
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Stakeholder Leadership MeetingsThroughout the project, a series of meetings were held to review iterations of the model with the academic deans,
business officers, auxiliary unit leadership, and other stakeholders.
Stakeholder Meetings
No. Meeting Topics DescriptionScheduled
Date
1Model Development
Process Overview
Reviewed the FY19 actuals model, the reorganization of transactions to align
with unit and account definitions
Weeks of May
18 – June 7
2 Initial Model ReviewIntroduced the model that includes the data-driven allocation rules, cost pool
allocations, and the participation fee (tax)
Week of June 1
– June 19
3Budget Model Panel
Discussion
Led a panel discussion with Tom DiLorenzo and Kathy Farrell who answered
questions related to incentive-based budget model implementation at their
universities
Week of May
14
4 Working Group MeetingsCollaborated with Budget Office staff and campus SMEs to solicit additional
feedback on proposed model parameters and design
Periodic
Meetings
January - April
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Schools & Colleges Model Summary
Business EducationEngineering & Applied
Science
Letters, Arts, &
Sciences
Nursing & Health
SciencesPublic Affairs
Schools & Colleges
Total
Centers & Institutes
Summary
Admin & Support
SummaryAuxiliaries Summary Subvention Pool Passthroughs Summary Model Total
Row Revenue
10 Student Fees 501,133 333,353 579,430 1,554,190 331,381 88,810 3,388,297 - 14,418,528 4,825,528 - - 22,632,353
11 Direct Student Tuition 45,700 136,806 85,124 606,612 123,263 4,153 1,001,659 1,819 829,820 - 5,079,390 - 6,912,688
12 Tuition Differential Premium 1,686,620 - 1,443,689 77,731 1,871,349 - 5,079,390 - - - (5,079,390) - -
13 Allocated UG Tuition 11,622,349 4,621,335 9,580,788 61,674,449 8,117,984 3,745,645 99,362,550 - - - - - 99,362,550
14 Allocated Grad Tuition 3,310,874 5,004,077 2,190,464 2,099,195 2,974,121 1,963,864 17,542,595 - - - - - 17,542,595
15 Allocated UG Scholarships (1,606,037) (585,736) (1,355,894) (7,816,995) (1,211,783) (474,746) (13,051,191) (13,051,191)
16 Allocated Grad Scholarships (199,409) (252,716) (127,125) (109,939) (171,845) (99,179) (960,212) - - - - - (960,212)
17 Net Tuition and Fees 15,361,229 9,257,120 12,396,477 58,085,242 12,034,471 5,228,547 112,363,086 1,819 15,248,348 4,825,528 - - 132,438,781
18 20% Cent. Ret State Appropriations 2,428,720 1,498,487 1,917,519 11,118,964 1,787,427 869,958 19,621,075 - - - 5,606,021 - 25,227,097
19 Earmarked State Appropriations - - 998,804 - - - 998,804 - 1,801,196 - - - 2,800,000
20 State Approps. Allocated for G&C 11,275 566,472 459,769 592,853 348,766 246,068 2,225,203 498,507 - 79,301 - - 2,803,011
21 Grants & Contracts 22,661 1,179,227 1,026,321 1,235,377 703,058 494,563 4,661,208 1,029,862 583,334 159,074 - 25,529,653 31,963,132
22 F&A Recovery 9,744 95,573 265,512 289,449 150,574 64,801 875,652 296,378 4,383 106 - 44,513 1,221,031
23 Gifts 712,286 32,659 583,335 393,255 147,526 161,672 2,030,733 1,672,061 4,305,338 943,738 - - 8,951,868
30 Sales, Services, Misc & Other Revenue 290,352 167,935 (2,249) 469,463 1,499,828 30,160 2,455,490 1,019,066 6,140,104 33,809,776 (0) 7,449,955 50,874,390
31 Total Revenues 18,836,267 12,797,474 17,645,489 72,184,602 16,671,650 7,095,769 145,231,250 4,517,692 28,082,703 39,817,523 5,606,021 33,024,120 256,279,310
32
33 Expense
34 Salaries & Wages 8,678,362 4,623,669 7,110,036 25,638,064 7,977,413 2,465,122 56,492,666 2,082,785 37,245,244 10,260,212 - 11,305 106,092,212
35 Benefits 105,972 169,439 52,877 287,870 486,492 132,848 1,235,497 442,303 1,308,570 2,633,168 - 2,051 5,621,589
36 Travel 163,532 92,394 160,091 495,923 123,101 69,841 1,104,881 67,455 1,465,621 409,004 - - 3,046,962
37 Utilities - - - 703 - - 703 - 203,145 1,119,908 - - 1,323,757
38 Student Aid 38,300 226,799 584,163 448,370 176,724 5,250 1,479,607 145,445 3,441,768 468,752 - 24,189,927 29,725,498
39 Operating Expenses 1,010,378 586,431 1,069,336 2,196,359 701,583 185,726 5,749,813 948,468 20,242,790 11,492,474 - 16,725 38,450,270
40 Deferred Maintenance - - - - - - - - 8,000,000 - - - 8,000,000
41 Book & Periodicals - - - - - - - - 694,372 - - - 694,372
42 Intercampus Cost Allocation - - - - - - - - 5,833,220 - - - 5,833,220
43 Debt Service - Direct - - - - - - - - 2,631,663 8,650,735 - 1,543,642 12,826,039
44 Voluntary Transfers (87,669) (455,126) (223,631) (129,789) (516,035) (48,719) (1,460,969) (175,266) (8,180,160) 2,051,494 - 1,269,979 (6,494,922)
45 Total Direct Expenses 9,908,875 5,243,606 8,752,871 28,937,500 8,949,278 2,810,068 64,602,199 3,511,190 72,886,232 37,085,747 - 27,033,629 205,118,997
46
47 Direct Unit Margin 8,927,391 7,553,869 8,892,617 43,247,102 7,722,371 4,285,700 80,629,051 1,006,502 (44,803,529) 2,731,776 5,606,021 5,990,491 51,160,313
47.4% 59.0% 50.4% 59.9% 46.3% 60.4%
49 General Fund Benefits Allocation
50 Benefits (2,669,824) (1,306,188) (2,119,741) (7,965,708) (2,093,231) (663,837) (16,818,529) (117,293) (9,630,867) (245,072) - - (26,811,761)
52 Assignable Debt Service Allocation
53 Debt Service Expense (15,360) (9,669) (535,755) (1,537,493) (333,485) (128,498) (2,560,259) (272,782) (201,954) - - - (3,034,995)
58 Assignable Facilities Utilities Allocation
59 Utilities (186,888) (53,370) (359,134) (1,319,932) (88,425) (27,444) (2,035,193) (80,273) - - - - (2,115,466)
61 Total Unit Margin 6,055,320 6,184,642 5,877,987 32,423,969 5,207,230 3,465,922 59,215,069 536,155 (54,636,350) 2,486,704 5,606,021 5,990,491 19,198,090
62
63 Driver Administrative & Support Unit Allocations
64 FTE - Fac + Stud Academic Affairs (759,949) (375,489) (755,470) (2,879,223) (630,828) (303,074) (5,704,033) (1,071) 5,705,104 - - - -
65 GCE - PrU AA - Research (3,566) (179,165) (145,417) (187,509) (110,308) (77,827) (703,792) (157,669) 886,542 (25,082) - - 0
66 FTE - Fac + Stud Library (418,293) (206,678) (415,828) (1,584,789) (347,222) (166,819) (3,139,629) (589) 3,140,218 - - - -
67 HC - Tot Information Technology (572,546) (336,266) (540,705) (2,075,925) (578,795) (279,131) (4,383,367) (6,249) 4,435,742 (46,125) - - (0)
68 SQFT - Acad Facilities (223,377) (63,790) (429,254) (1,577,644) (105,690) (32,802) (2,432,556) (95,946) 2,528,502 - - - -
69 HCS - Tot Student Success (1,521,880) (832,028) (1,430,180) (5,454,035) (1,471,403) (736,122) (11,445,649) - 11,445,649 - - - -
70 DREV - PrU Executive Leadership & Advancement (1,298,824) (882,429) (1,216,715) (4,977,370) (1,149,566) (489,277) (10,014,181) (311,510) 13,071,242 (2,745,551) - - 0
71 DEXP - PrU Administration & Finance (466,181) (246,695) (411,794) (1,361,416) (421,035) (132,205) (3,039,325) (165,190) 4,949,280 (1,744,765) - - (0)
72 HCS - Tot Athletics (63,035) (34,462) (59,237) (225,902) (60,944) (30,490) (474,070) - 474,070 - - - -
73 Total A&S Unit Allocations (5,327,650) (3,157,002) (5,404,600) (20,323,812) (4,875,791) (2,247,747) (41,336,603) (738,224) 46,636,350 (4,561,523) - - 0
74
75 Unit Margin After Cost Allocations 727,669 3,027,640 473,387 12,100,156 331,440 1,218,175 17,878,466 (202,070) (8,000,000) (2,074,819) 5,606,021 5,990,491 19,198,090
77 Deferred Maintenance Allocation
78 No Auxiliaries Deferred Maintenance (706,749) (201,827) (1,358,127) (4,991,551) (334,394) (103,785) (7,696,433) (303,567) 8,000,000 - - - -
80 Unit Margin After Depreciation Allocation 20,920 2,825,813 (884,741) 7,108,605 (2,954) 1,114,390 10,182,033 (505,636) - (2,074,819) 5,606,021 5,990,491 19,198,090
81
82 Tuition Stabilizaton Fund Assessment (877,954) (556,185) (719,133) (3,459,775) (701,557) (316,679) (6,631,282) (25,307) - (43,411) 6,700,000 - -
83 4.5% Break-Even Tax Rate (781,085) (494,819) (639,788) (3,079,350) (685,277) (281,738) (5,962,056) (66,051) - (38,615) 6,066,722 - -
84 Cumulative SIP Assessment (1,659,039) (1,051,003) (1,358,921) (6,539,124) (1,386,833) (598,417) (12,593,338) (91,358) - (82,026) 12,766,722 - -
86 Unit Margin after SIP Assessment (1,638,118) 1,774,810 (2,243,662) 569,481 (1,389,788) 515,973 (2,411,305) (596,994) - (2,156,845) 18,372,743 5,990,491 19,198,090
87 SIP Distribution 1,638,118 - 2,243,662 - 1,389,788 - 5,271,568 667,237 - 2,840,334 (8,779,139) - -
88 Unit Margin after SIP Distribution - 1,774,810 - 569,481 - 515,973 2,860,263 70,243 - 683,489 9,593,604 5,990,491 19,198,090
FY19 Resource Allocation Model - Executive Summary
Model FrameworkThe proposed model framework allows for unit-level funds flow statements. A condensed version of the proposed structure, for illustrative purposes, is shown below.
Revenues and
Direct Costs
Primary Units
Admin & Support Unit Costs
Allocated to Primary Units
Central Funding Mechanism
Provision for Capital Renewal
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Key Model Decisions
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Decision PointsThe transition to a decentralized and incentive-based model requires dozens of decisions regarding the model’s scope, structure, and methodology; ten of these decisions prove most critical and will be thoroughly discussed today.
Call-outs are included in the following slides to highlight key topics of discussion and decision points.
1. Unit Organization
2. Tuition Revenue Allocation
a) Undergraduate
b) Graduate
3. State Appropriations
a) General Allocable State Appropriations
b) Allocation Illustration
4. Undergraduate and Graduate Aid
a) Allocable Institutional Aid
5. F&A Indirect Cost Recovery
6. Support Unit Cost Pools
a) Support Unit Cost Discussion
b) Cost Pool Structure & Allocations
7. Central Funding
a) Central Funding Approach
b) Revenue Sources for Central Funding
c) Central Funding Levels
8. Carryforward Policy
9. Deferred Maintenance
10. Timing of Revenue and Cost Driver Updates
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1. Unit OrganizationCampus units have been categorized as academic units, auxiliary units, or support units based upon their ability to
influence revenue generation and expectations for financial performance.
Academic and Auxiliary Units Support Units
Generally defined by the following characteristics: Generally defined by the following characteristics:
1. Able to influence revenue generation 1. Less opportunity to influence revenue
2. Receive allocation of central unit costs 2. Provides services and/or support to Revenue Units
3. Accountable for performance, retaining both surpluses and shortfalls 3. Accountable for operating within an expense budget (net of direct revenues)
4. Contribute to and may receive distributions from the Strategic Investment Pool 4. Responsible for providing optimum service and may be held to service-level
agreement expectations
College of Business Housing, Dining, Retail Executive Leadership & Advancement Academic Affairs
College of Education Parking and Transportation Services Facilities Information Technology
College of Engineering & Applied Science UCCS Presents University Library Administration & Finance
College of Letters, Arts & Sciences Auxiliary Administrative Services Student Success Research Office
School of Public Affairs THHC, EPIIC, Biofrontiers, Center for The Study of Government & The Individual
Athletics
Johnson Beth-El College of Nursing & Health Sciences
Academic and Auxiliary Units Include: Support Units Include:
Significant Committee Decisions Regarding Unit Organization
▪ No “hybrid” units were utilized, in favor of combining business-type activities of schools and colleges with the related academic operations to
demonstrate the mission-critical function of such functions.
▪ Support unit costs represent the direct operating costs of support units, while additional cost pools are utilized to allocate costs of employee
benefits, utilities, and a deferred maintenance set-aside.
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2. Tuition Allocation
Proposed Tuition Allocation
Rows 12-14
Allocable Undergraduate
Tuition$103.0MM
Tuition Premia1
$3.6MMBase Tuition
$99.4MM
College of Record (20%)
$19.9MM$777/HC
College of Record (100%)
$3.6MM
College of Instruction (80%)
$79.5MM$289/CH
Allocable Graduate Tuition
$19.0MM
Tuition Premia1
$1.5MMBase Tuition
$17.5MM
College of Record (100%)
$17.5MM$3,147/HC
College of Record (100%)
$1.5MM
1Undergraduate and Graduate tuition premia vary across the
six colleges by residency, status, and program
Significant Committee Decisions Regarding Tuition Allocation
▪ The undergraduate tuition allocation methodology seeks to align revenue attribution with instruction and enrollment activities while directing tuition
differentials paid by Business, Engineering, and Nursing students to those colleges.
▪ After extensive discussion, the committee proposes allocating 100% of allocable graduate tuition to the college of record:
▪ Significant effort is involved in the maintenance of prestigious programs able to recruit and provide support for graduate students
▪ Additional considerations for 100% allocation include simplicity in maintaining the model using college of record and the ability to handle
interdisciplinary programs through MOUs
In the proposed budget model, tuition is grouped into three primary pools with allocation methodologies applied to
all the groupings.
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2a. UG Tuition Allocation: Instruction vs. RecordUCCS’ historical split between instruction and academic support expenses served as a starting point when
considering the allocation of undergraduate tuition revenue.
Course
Completion
35%
Inst. Support
10%
Acad. Support
10%
M&O
10%
Student
Success
35%
Tuition Allocated to College of Instruction
▪ Recognizes direct costs of instruction
▪ Incentive for course competition and redundancy
▪ Misaligned incentives for academic advising
Tuition Allocated to College of Record
▪ Promotes recruitment and retention
▪ Does not recognize direct costs of instruction
▪ Can lead to “holding company” mentality 80/20
College of Instruction
College of Record
50/50 75/2560/40
100%
0%
0%
100%
100/086/14
81% 80% 79% 80% 78% 79%
19% 20% 21% 20% 22% 21%
FY15 FY16 FY17 FY18 FY19 5 YR AVG
UCCS Share of Spending on Select Operating Expenses FY15-FY19
Instruction Academic Support
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2a. General (Allocated) Undergraduate TuitionFor the proposed budget model, undergrad tuition is allocated in such a way as to recognize costs of instruction as
well as academic program development and student support.
Proposal▪ Allocate 80% based on instructed UG credit hours (i.e., School of Instruction)
▪ Allocate 20% based on enrolled UG headcount (i.e., School of Record)
Change from
Current Practice
Currently, general undergraduate tuition is received centrally and allocated to campus units as spending
authority through a mostly base plus incremental change budgeting process
RationaleFunds for credit hours that pertain to the School of Instruction will support the direct costs of instruction
while funds for credit hours that pertain to the School of Record will support program development,
student recruitment, and retention.
ImplicationsCompared to the current practice, academic units will benefit from a stronger relationship between
revenue generation and revenue distribution. As a result, there will be much greater emphasis on
effective tools to analyze credit hour trends and make future projections
Row 13
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2a. Undergraduate TuitionUndergraduate tuition has been grouped into the following buckets based on dollar amounts in the operating
ledger and information provided by the Bursar.
Allocable Undergraduate Tuition
▪ Identified using tuition receipt information
provided by the Bursar
▪ Allocated based on:
▪ 80% based on each unit’s share of total
instructed credit hours (i.e. College of
Instruction)
▪ 20% based on each unit’s share of total
enrolled headcount (i.e. College of Record)
which has been adjusted to reflect additional
majors, double majors, certificates, and
education licensures
Direct Undergraduate Tuition
▪ Applies to extended studies programs which are
assigned to each academic unit to correspond
with the operating ledger
▪ Also includes undergraduate tuition premiums
which recognizes pricing premiums for specific
programs
Row 13
Undergraduate Tuition
$103.9MM
Direct Undergraduate
Tuition
$4.5MM
Instruction
$79.5MM
Instruction
$/CH
$289
Allocable
Undergraduate Tuition
$99.4MM
Record
$19.9MM
Record
$/HC
$777
80% 20%
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2b. Graduate TuitionGraduate tuition has been grouped into the following buckets based on information found in the operating ledger
and information provided by the Bursar.
Allocable Graduate Tuition
▪ Identified using tuition receipt information
provided by the Bursar
▪ Allocated 100% based on each unit’s share of
enrolled graduate headcount (i.e. School of
Record)
▪ Committing 100% of allocable tuition to school of
record reflects marketing, recruitment and student
success efforts; contributes to model simplicity;
and leaves room for the use of MOUs to ensure
that collaborative programs can function within
the model
Direct Graduate Tuition
▪ Applies to extended studies programs which are
assigned to each academic unit to correspond
with operating ledger
▪ Also includes graduate tuition premiums which
recognizes pricing premiums for specific
programs
Row 14
Graduate Tuition
$19.2MM
Direct Graduate
Tuition
$1.7MM
Record
$17.5MM
Record
$/HC
$3,147
Allocable Graduate
Tuition
$17.5MM
100%
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3. State AppropriationsFor the proposed model, direct state appropriations are direct assigned to specific units, whereas general
appropriations provide an opportunity to incentivize research, instruction, and other activities.
Direct State Appropriations
▪ Direct state appropriations restricted
for specific purposes are assigned to
the appropriate operating units or
strategic pool based on the restricted
purpose of those funds
▪ The Steering Committee evaluated
what portion of state appropriations
should be directly allocated to the
central pool; retention of 10-20% was
recommended to support necessary
subvention, provide executive
leadership strategic investment
funds, and provide administration
with funds to handle volatility of state
appropriations year-over-year. 20%
was retained, with half being
returned to the schools and colleges
as subvention.
Rows 18-20
1Purpose of earmarked state appropriations include: cybersecurity, chancellor campus commitments,
financial aid, EAS administrative operations, campus benefits
State
Appropriations
$30.8MM
Allocable
Portion
$28.0M
Research
Subsidy (10%)
$2.8M
$0.50/G&C Exp
Central Pool
(20%)
$5.6M
Instruction &
Record (70%)
$19.6M
Earmarked
Portion1
$2.8M
College of
Instruction (80%)
$16M
$65/CH
College of
Record (20%)
$3.9M
$126/HC
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 21
3a. General Allocable State AppropriationsFor the proposed model, general state appropriations are allocated to support instruction, research, and a central
strategic pool.
Proposal
Central
(20% of total)
▪ Retain centrally so that administration can effectively handle volatility of state
appropriations year-over-year
Research
(10% of total)▪ Allocate on the proportional share of sponsored grants & contracts expenditures
Instruction/
Record (70%
of total)1
▪ Allocated 80% on the proportional share of credit hours instructed
▪ Allocated 20% based on the proportional share of student headcount of college of
record
Change from
Current Practice
In the current practice, all general state appropriations are received centrally and allocated to campus
units as spending authority through a mostly incremental budgeting process
RationaleRetaining 20% of state appropriations centrally creates a more consistent annual budget for the colleges
in the event of budget fluctuations, while distributing 10% and 70%, for research and instruction/record
respectively, accurately rewards units for driving revenue-producing activities
ImplicationsPlaces greater emphasis on research and academic planning activities because dollars are closely
linked to specific research and enrollment indicators
1For Instruction/Record portion: 70%*(80%) + 70%*(20%) = 56% + 14% = 70% of total
Rows 18-20
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 22
3b. Illustrative State Appropriation AllocationAfter setting aside 20% to be retained centrally and another 10% for research subsidization, approximately $19.6
million is left to be allocated based on instruction and enrollment.
10%90%
UCCS General State Approp. ($28.3M)
Research Subsidy: $2.8M Remaining State Approp. : $25.2M
$5,580,000 20%
$2,790,000 10%
$15,624,000 56%
$3,906,000 14%
$19,530,000 70%
Illustrative FY19 State Appropriations Allocation(Assumes 80/20 Split on Instruction/Record)
Central Pool Research Subsidy
Allocated to College of Instruction Allocated to College of Record
Record: 20% of 70%
Instruction: 80% of 70%
Row 20
Allocation Aligns With Goals
▪ Allocating a portion of state appropriations to units generating research revenues incentivizes research and offsets the allocated costs of the
central research office.
▪ The 70% of appropriations remaining after research and central pool allocation are then allocated to schools and colleges based on their
instructed credit hours and enrolled students.
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 23
4. Undergraduate and Graduate AidFor the proposed model, institutionally awarded undergraduate and graduate scholarships are allocated based on a college’s share of tuition allocated, while departmental aid is directly assigned to units as incurred.
Financial Aid Description
Institutional Aid
Allocable
Undergraduate
($13.0MM)
Allocated based on pro rata share of
undergraduate tuition revenue received
Allocable Graduate
($1.0MM)
Allocated based on pro rata share of graduate
tuition revenue received
Departmental AidDirect
($1.5MM)
Directly assigned scholarships/fellowships where
incurred
Rows 15-16
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 24
4a. Allocable Institutional AidMerit and need-based institutional aid, distributed by the Office of Financial Aid, was allocated on the basis of a
unit’s relative share of allocable undergraduate and graduate tuition.
Institutional Aid
▪ Allocable undergraduate scholarships are centrally held
institutional scholarships and mandated tuition waivers
▪ Allocable graduate fellowships and waivers were identified by the
Graduate School and allocated based on allocable graduate
tuition revenue received
Departmental Scholarships
▪ Departmental scholarships were directly assigned to
departments as they were recorded in the general ledger.
Rows 15-16
Allocable Scholarships
$14.0MM
Graduate Allocable
Scholarships/Fellowships
$1.0MM
Undergraduate Allocable
Scholarships
$13.0MM
$/UG Tuition $
Allocated
$0.13
$/GRAD Tuition $
Allocated
$0.05
Graduate Aid
▪ The steering committee held several
discussions related to the allocation of
graduate merit v. need-based financial
aid.
▪ Agreement surrounding the allocation
criteria for merit-based graduate aid
should be sought in future budget
governance discussions.
▪ Huron supports further analysis and
evaluation during the parallel process
year as additional data regarding
awarding of need and merit-based aid
becomes available
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5. F&A Indirect Cost Recovery (IDC)In the proposed budget model, indirect cost recovery (IDC) is allocated to the primary units where the research is
performed.
ProposalAllocate 100% of IDC revenue to primary units where research is performed based on each unit’s share
of sponsored research
Change from
Current Practice
In the current practice, 40% of recovered facilities & administration costs go to the unit performing the
research. The remainder of recovered funds is divided with 27% going to the office of Administration &
Finance, 25% going to Academic Affairs, and 8% to the library
RationaleAllocating 100% of IDC to the units should reflect actual amounts generated to support research and
further incentivize the pursuit of higher recovery
Implications
While campus units involved in research will receive 100% of the IDC revenue, a portion of these funds will
be used to cover support unit costs and central investment pools (e.g., strategic investment, deferred
maintenance, etc.); therefore, it may not result in a net revenue increase for a particular campus unit in the
short-term.
The allocation of 10% of state appropriations on the basis of sponsored research expenditures is intended
to help further support and subsidize research costs.
Row 22
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6. Cost Pool StructureThose units that are not categorized as primary units are typically considered support units; these are grouped into
cost pools, the number of which should be driven by balancing the desired level of transparency with the desired
level of model complexity.
A model with too few cost pools can obscure the true drivers of overhead costs;
however, too many cost pools increases the complexity of the model mechanics and ruleset.
▪ Increases transparency
▪ Closer approximation of economic reality
▪ Provides functional accountability
▪ Connects costs and service levels
▪ Allows adjustments to balance start points
▪ Simple
▪ Drives academic focus to revenues
▪ Provides flexibility to central administration
▪ Avoids functional “witch-hunts”
▪ Reduces time spent in committees
Number of Pools ManyFew
13 Cost Pools
Rows 64-72
9 Cost Pools
Cost Pool Structure
▪ The nine operating cost pools reflect the direct costs of VCAA, Sponsored Research, Library, IT, Facilities, VCSS, Exec. Leadership &
Advancement, VCAF, Athletics
▪ Additional cost pools reflect central benefits, deferred maintenance, debt service and central utilities.
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 27
6a. Support Unit Cost Discussion ItemsDuring conversations with stakeholders, a number of questions arose as to the composition of cost pools, the
costs allocated to academic units, and the details surrounding relevant processes.
▪ Funding Levels: support unit allocations will reflect budgets divided by activity levels; therefore, unit budgets
will not formulaically increase as a result of activity level increases
▪ Funding Methodology: Central units will not bill for their base costs, but rather the budgeted allocable cost will
be deducted from the primary units’ budget at the beginning of the fiscal year.
▪ Exemptions: generally speaking, exemptions are not offered
▪ Level of transparency: all cost pools in the model are composed of a number of administrative units, though
transparency is set at an aggregate level
▪ Validity: this initiative did not assess reasonableness of support unit funding levels
▪ Stakeholder Input: a governance structure is recommended to facilitate stakeholder input and ensure
alignment of support unit service levels with their cost
▪ Service level agreements: selected areas often develop service level agreements during the hold harmless
period to provide clarity with regards to services associated with cost pool allocations
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6b. Cost Pool AllocationsUCCS’s support units have been grouped into thirteen cost pools from which net expenditures will be allocated to each primary units based on a single metric that best represents the driver of cost.
Cost Pool Description Allocation Driver (A) Net Exp. (B)FY19 Cost per Unit
(B/A)
Administration &
Finance
Components include HR, budget office, controller’s office,
administrative operations, payroll
Total Direct
Expenditures$4.9MM $0.05
Academic AffairsComponents include provost’s office, excel centers,
graduate school, faculty resource center
Student + Faculty
FTE$5.7MM $544.39
Executive
Leadership &
Advancement
Components include chancellor’s office, VC strategic
initiatives, marketing & communications, general counsel,
university advancement, central funding pools
Total Direct
Revenues$13.1MM $0.07
Information
Technology
Components include IT, Telecommunications, Enterprise
Systems, Academic Computing Services, Networking &
Computing Support
Total HC $4.4MM $297.58
University
LibraryKraemer Family Library
Student FTE +
Faculty FTE$4.5MM $430.69
Athletics University athleticsTotal Student
Headcount$474K $14.14
Rows 64-72
Note: For purposes of headcount and FTE, Steering Committee voted to include
online students pending uncertainty of treatment of CU Online Enterprise
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6b. Cost Pool AllocationsUCCS’s support units have been grouped into thirteen cost pools from which net expenditures will be allocated to each primary units based on a single metric that best represents the driver of cost.
Cost Pool Description Allocation Driver (A) Net Exp. (B)FY19 Cost per Unit
(B/A)
Student SuccessComponents include strategic enrollment, bursar, financial
aid ops, advising, counseling, health & wellness, student life
Total Student
Headcount$11.4MM $841.28
Sponsored
ResearchResearch office
Grants & Contracts
Expenditures$886K $0.16
Facilities Facilities Management and Campus ServicesAssignable Sq.
Footage - Acad$3.0MM $11.51
Benefits Central BenefitsSalaries & Wages –
Primary Units$26.8MM $0.33
Debt Service Debt Service ExpenseAssignable Sq.
Footage - Acad$3.0MM $31.08
Central Utilities Campus-level Utilities ExpenseAssignable Sq.
Footage – Acad$2.1MM $8.08
Deferred
Maintenance
Preventive and long-term maintenance set-aside for
classroom and administrative buildings.
Assignable Sq.
Footage – Acad$6.2MM $23.60
Rows 49-59 &
64-72
Note: For purposes of headcount and FTE, Steering Committee voted to include
online students pending uncertainty of treatment of CU Online Enterprise
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7. Central Funding CharacteristicsEstablishing a strategic investment pool helps to support funding for unit subvention and mission-aligned strategic
investments, as well as state- required reserves.
The Board of Regents requires that each CU campus maintain an emergency tuition stabilization reserve. Beyond the
strategic investment pool, the model also levies an assessment on revenue to fund this reserve.
Unit Subvention Mission-Aligned Strategic Investments
Definition
▪ A centrally-held pool of revenues to address
mission-critical needs, the nature of which, are not
self-funding
▪ A centrally-held pool of revenues to address
university-wide priorities and revenue growth
strategies
Rationale
▪ Sum of the parts is not optimal for the whole;
UCCS needs the ability to act as one entity to
achieve University-wide goals
▪ In part, the use of the central fund addresses the
economic problem of the commons
Illustrative
Uses
▪ Ensure appropriate subsidies to meet major
institutional goals
▪ Address compliance and regulatory issues as they
arise
▪ Provide start-up funding for high priority academic
programs
▪ Underwrite new initiatives which do not naturally
fall under one unit’s care
Funding
Formula
▪ Various funding models are used across
institutions, each with pros and cons
▪ Various funding models are used across
institutions, each with pros and cons
Rows 82-83
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Revenue Retention Legacy Model Adjustment Participation Fee (Tax)
Description▪ Select revenue(s) are centrally
retained
▪ Fixed amount or percentage of
operating surplus is
redistributed from outlier(s) to
select unit(s) to reflect historical
subsidies
▪ Participation fee is assessed on
specific set revenues for all
primary units
Pros
▪ Provides a direct funding
mechanism
▪ Relatively simple to implement
especially if revenues
previously not distributed
▪ Promotes neutral starting points
for new model implementation
▪ Often used to dramatically
reduce tax rates, thereby
strengthening incentives to
grow marginal revenues
▪ Considers various revenue
sources
▪ Potential for increased size as
the institution experiences
revenue growth
Cons
▪ Revenue often limited in terms
of future growth
▪ Funding size can be volatile
due to lack of revenue
diversification
▪ Difficult to determine legacy
model adjustment amount;
calculation might be considered
“as much art as science”
▪ Requires diligent assessment of
initial rate
▪ Perception is influenced if rate
increases due to diminishing
revenue sources
7a. Central Funding ApproachUniversities with incentive-based models typically choose one or more of the following approaches to fill the
subvention pool as well as the strategy and mission enhancement fund.
UCCS uses a 20% retention of state appropriations, in conjunction with an assessment on select revenues, to establish
the Strategic Investment Pool.
Rows 82-83
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7b. Revenue Sources for Central Funding PoolIn the proposed budget model, a participation fee (tax) is applied to select revenue sources across the primary units to fund subvention and strategic initiatives. Below is a table of the selected revenues:
Revenues Operating Revenues Taxed?
Total Undergraduate Tuition $103,974,634 Yes
Total Graduate Tuition $19,013,378 Yes
Total Scholarships/Fellowships/Waivers $(14,011,404) Yes
General State Appropriations $19,621,075 Yes
State Appropriations allocated for Grants & Contracts $2,803,011 Yes
Health Services Operating Revenue $2,354,711 Yes
Earmarked State Appropriations $2,800,000 No
Student Fees $8,213,825 No
Grants, Contracts, and F&A $7,022,280 No
Sales & Services (Auxiliaries, other) $33,654,206 No
Gifts $4,646,531 No
Other Revenue (e.g. misc., internal service center) $1,275,414 No
Total Operating Revenues $175,555,062
The base of revenues for the participation fee represent
70% of the total operating revenues across the primary units.
Rows 82-83
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4.5%
4.2%
5.1%
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
Mill
ions
Strategic Investment Pool Components (% of Taxable Revenues)
Subvention Tax State Approp. Retention Tuition Stabilization
7c. Central Funding LevelsAfter a 20% retention of state appropriations and a $6.7MM withholding for the tuition stabilization reserve, a
participation fee (tax) of 4.5% on select revenues ensures sufficient funding exists to cover any operating deficits
after primary units have paid the participation fee, while also generating fund for strategic incentives.
80%
90%
100%
110%
120%
130%
140%
150%
Uni
t Los
ses
Cov
ered
Participation Fee (Tax) on Select Revenues
Primary Unit Losses Covered by Participation Fee (After Central State Approp.
& Tuition Stabilization Tax)
The FY19 Actuals Model depicts $2.8MM, approximately 10% of state appropriations, remaining in the Strategic
Investment Pool. In a “live” budget year, the SIP fund would be invested in strategic activities. The Tuition
Stabilization Fund may fluctuate depending on carryover reserve levels.
Rows 82-83
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8. Carryforward PolicyFor the proposed model, academic units expressed a desire to understand the treatment of year-end carryforwards
to assess the incentives to grow revenue and drive efficiencies in the delivery of academic programs.
ProposalAcademic and auxiliary units retain unrestricted annual surplus (carryforward) amounts for future year
spending. Expectations for reserve thresholds are not yet established but are a critical governance
consideration and will remain a topic of discussion.
Change from
Current Practice
This is not a significant change from current practice. Unrestricted fund carryforward is permitted;
amounts in excess of $10,000 must be transferred to reserve fund. Spending plans must be approved by
UCCS leadership annually. No reserve thresholds are established.
RationaleRetaining carryforward provides primary units with an incentive to generate revenue, spend wisely and
implement efficiencies because they retain all savings
Implications▪ Able to build reserves for multi-year commitments, equipment replacement, and unexpected changes in
revenues and expenditures
▪ Risk that units become too conservative, creating opportunity costs that reduce strategic investments
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 35
9. Capital Renewal TreatmentMany universities that use an incentive-based budgeting system require primary units to contribute to the future
renewal of campus infrastructure.
Proposal
Allocate a target amount1 for: (1) known cyclic repair and replacement requirements that extend the life of
facilities and systems that are not normally contained in the operating budget; and (2) maintenance work
that has been deferred on a planned or unplanned basis due to lack of funds. After determining that an
annual target of 2% of current replacement value ($16MM) was not tenable, the target was reduced to
$8MM and then further revised to provide a more realistic target. Discussions are underway at the state
level to determine the adequacy of deferred maintenance set-asides.
Change from
Current Practice
Currently, funds for facility renewal and deferred maintenance are largely sourced from State
appropriations, which have fallen short of meeting the full need to keep campus infrastructure in a state of
good repair.
Rationale
Aligns with APPA’s view of campus facilities as a collection of liabilities that require continual investment
from a dedicated (and protected) funding source; keeps facilities productive to support the University’s
mission and avoid costly repairs when systems and components fail. Anticipates System guidance
requiring larger set-asides for capital funding.
ImplicationsSome campus units are likely to reconsider their current space usage. The more direct nature of
contributions by campus units to support facilities could lead to a shift in priorities for capital planning
processes.
1. The Building Research Board of the National Research Council recommends an annual allocation of 1.5% to 3% of the plant’s current replacement
value for facility renewal; this is a separate amount from any one-time funding to reduce deferred maintenance backlogs. Current replacement value is
the estimated cost of construction for a new facility containing an equal amount of space that is designed and equipped for the same use as the original
building and meets the current commonly accepted standards of construction as well as regulatory requirements.
Row 78
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10. Timing of Allocation Driver UpdatesThe Steering Committee has offered a preliminary recommendation that the model use current year plan or budget
for revenue and expense and activity level metrics that are one year in arrears for the allocation methodologies.
ElementDollars Used
in ModelAllocation Metrics
Recommended
Metric Timing
Direct Expenses
Current Year
Plan or Budget
N/A N/A
Direct Revenues N/A N/A
Allocation of Support Unit
(Cost Pool) Expenses
• Total Direct Expenditures
• Total Direct Revenues
• Net Assignable Square Footage
• Total Headcount
• Student and Faculty FTE
• Total Student Headcount
• Sponsored Expenses
Prior Year Actuals
Assignable Debt Service • Actual building usage for debt-funded facilities Budget Year Forecast
Allocation of General
Revenues: General UG Tuition,
General Grad Tuition,
Institutional Scholarships and
General State Appropriations
• Credit Hours Instructed
• Credit Hours Enrolled
• Sponsored Revenue
• Undergraduate General Tuition
• Tuition Received Prior Year Actuals
Timing Spectrum
3-year historical
average1-year in arrears Budget year forecast
Least Responsive,
Most Stable
Most Responsive,
Least Stable
Budget year forecast with year-
end adjustment to reflect actuals
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 37
Operationalizing the Model
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 38
Implementation TimelineThe implementation timeline should leverage current momentum while providing time for additional engagement,
infrastructure development, and training.
FY 20
(July 19 – June 20)
FY 20
(July 20 – June 21)
FY 21
(July 21 – June 22)
FY 22
(July 22 – June 23)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Suggested
Implementation
Timeline
Budget
Model
Development
Parallel Year/Hold
Harmless Year +
Infrastructure Development
“Live” Model (Year 1) “Live” Model (Year 2)
Alternative
Implementation
Timeline
Budget
Model
Development
Parallel Year +
Infrastructure Development
Second Parallel/”Hold
Harmless” Year“Live” Model (Year 1)
Rationale for suggested implementation timeline:
▪ Accelerated implementation timeline allows benefits of the model to be realized sooner
▪ Attempts to avoid budget model redesign fatigue
▪ Maintains project momentum by offering immediate reward and risk to primary units
▪ A parallel year offers the ability to examine model outcomes for unintended consequences prior to going live.
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 39
Illustrative Governance Structure In the annual budgeting process, central leadership, primary units, support units, and governance committees work
in close coordination to optimize the use of resources to advance the mission of the institution. The Steering
Committee has proposed an expanded role for UBAC and new subcommittees to guide the budget model.
Executive
Leadership
Academic
Deans
Evolved UBAC
Governance Committee
Supporting Subcommittees
Academic
Subcommittee
Support
Units
Auxiliary
Units
Dept.
Chairs and
Admin.
Curriculum-
Related
Committees
Campus
Support Unit
Subcommittee
Faculty
Gov.
Supplemental Advisory Committees
Space
Management
Committee
Data
Governance
Committee
Key Stakeholders/Participants
Decis
ion
Makin
g F
low
Pending Governance Topics
▪ Establishment of governance structures is
a critical step during the parallel process
year
▪ Previously surfaced topics for discussion
will include reserve targets and policies,
strategic investment guidelines, and
graduate aid allocation processes
▪ Data governance, space management,
and other topics identified as critical to
successful model implementation may be
addressed through temporary or standing
committees
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 40
Academic Portfolio
Management
Research Collaboration
Space Management
Admin. Service Delivery
New Program Development
The Budget Model as a Catalyst for Success
While the new incentive-based model is only a management tool, it is intended to be
leveraged to support resource optimization, primarily through the Deans.
Now that Deans have more levers at their disposal to influence the economics of the academic enterprise, there are new financial benefits to examining areas for optimization.
While the new incentive-based model is only a management tool, it is intended to be
leveraged to support resource optimization, primarily through the Deans.
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 41
Model’s Impact on Decision MakingIncentive-based models have the potential to materially transform institutions over a five to ten-year period as they
change the culture of decision making.
▪ Executive Leadership: removes the luxury of “all things to all people” by forcing difficult decisions
▪ Institutions understand Colleges and Schools are creating and using resources
▪ Allocations reflect the University's mission and act as “value judgements” for institutional units
▪ Chancellor/Provost/VC of Administration & Finance: force clarity regarding priorities and strategic initiatives
▪ Through the design of incentives, priorities have meaning and produce funding for local units
▪ Full transparency in how resources are used to promote strategic initiatives
▪ Deans: understand the full cost of activities (academic programs, research, etc.) and prioritize them through cross-
subsidies between their revenue generating activities and their mission-driven activities
▪ Program growth is no longer a question of simply “doing more with less”
▪ Promotes understanding that research activities lose money and require investment
▪ Support Units: connect service levels and resource levels
▪ Support unit budgets must be justified and paid for by revenue producing units, which introduces enhanced
accountability and perhaps competition
▪ Department Chairs and Faculty Members: see how activities drive funding for their respective units
▪ Incentivize innovation in the classroom, much like incentives for innovation in research
▪ Drive “trade-off” conversations and proactive prioritization
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 42
Academic Portfolio Management
Positive Financial Impact
Mission
Critical Mission
Neutral
Mission Subsidy Program
Provide resources for mission
investments in other academic
programs
Mission Investment Program
Fulfills University’s critical mission
priorities, partially utilizing resources
generated via other initiatives.
Resource Drain Program
May warrant additional study for
resource optimization.
Ideal Program
Represents both investment in
mission and positive financial return
for additional investment
Strategic Investment Required
Academic portfolio analysis highlights the balance between financially beneficial and mission critical programs, which
can support a strong case for central strategic funds.
As incentive-based models push more resource decisions to the school-level, Deans will have more authority and responsibility for managing their academic portfolios to balance resource generation and mission investments
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 43
Illustrative Scenario PlanningThe table below illustrates how marginal increases in various metrics can impact a unit’s net operating margin. A template which includes scenario modeling for additional metrics (e.g. research, tuition premia, hiring expenses) will be provided following the deans’ retreat.
Scenarios
A) 30 Additional UG CH
Instructed
B) 30 Additional UG CH
Recorded
C) 30 additional UG CH
consumed within College
Revenues Rates
UG Instruction Allocation $228/CH instructed 6,840$ 6,840$
UG Record Allocation $1,161/HC recorded 3,483 3,483
State Appropriations - College of Instruction $59/CH instructed 1,770 1,770
State Appropriations - College of Record $143/HC recorded 429 429
UG Scholarships 13% (889) (453) (1,342)
Total Revenues 7,721 3,459 11,180
Central Unit Allocations
VCAA 544/FTE 1,360 1,360
Library $431/FTE 1,078 1,078
Information Technology $298/HC 894 894
VCSS $841/Stud. HC 2,523 2,523
Athletics $14/Stud. HC 42 42
Central Unit Allocations 5,897 5,897
Subvention Fund Participation 4.5% 347 156 503
Net Margin 1,477$ 3,304$ 4,780$
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Retreat Wrap-Up
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 45
Alignment with Guiding PrinciplesUniversity of Colorado Colorado Springs started the project by developing guiding principles for an alternative
resource allocation model. Below is a summary of how the proposed model aligns with the guiding principles:
Guiding Principle Component Description Addressed?
Align financial resources with
university mission
Allocates resources based on the University’s mission, strategic priorates,
and commitment to student successYes
Equitable resource allocationFeatures a design that provides an equitable, mission-driven, opportunity for
resources to be allocated across unitsYes
Clear & consistent decision-
making
Revenues and costs are allocated in a transparent and consistent manner;
institutional data is used as a proxy for what drives central unit costsYes
Promotes entrepreneurship
and innovation
Model features incentives that will reward performance, entrepreneurship,
and innovation while supporting the core curriculumYes
Transparency & trustNew budget process promotes transparency, efficiency, and accountability
across all units and fosters collaboration to instill trustYes
Commitment to fiscal
responsibility
Model incorporates all operating funds to better understand how units
contribute to the University’s fiscal position; primary units retain savings for
future investments, and the strategic investment pool ensure that institutional
priorities can be funded
Yes
Role of support unitsNew budget process and governance structures recognize role of support
units in promoting student success and other mission-critical outcomesYes
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 46
Key Retreat QuestionsAs discussed near the beginning of today’s retreat, participants should consider the following key questions:
Key Questions
Does the model adhere to the guiding principles?
Is the new model better than the one that the University uses today?
Is this an appropriate model to use for a parallel partnership year?
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 47
Next Steps
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 48
Post-Retreat ObjectivesFollowing the retreat discussion, the following activities are suggested:
▪ As Steering Committee co-chairs, the Provost and VC of Administration &
Finance will forward the Committee’s recommendation to the
Chancellor to review and make a final decision
▪ The co-chairs should notify the Steering Committee and Deans of key
decisions
UCCS IRM Scenario Planning Tool
Estimates the incremental revenue and expense impacts for new or incremental academic programs
Uses the metrics and allocation methodology from FY19 revenues and expenses model
Scenario Planning: Incremental Metrics Inputs Estimated Incremental Revenue & Expense Impacts Estimated Revenue & Expense Per Unit Change
Undergraduate Students Undergraduate Revenue Undergraduate Tuition Allocation Drivers Units Dollars Dollars/Unit
Incremental Revenue Drivers INPUT Total Incremental Undergraduate Tuition Revenue 74,048$ Undergraduate Tuition per SCH Instructed 274,659 69,309,882$ 252.35$
Number of Net Additional UG Students 10 Headcount Total Incremental State Appropriations Revenue 16,135$ Undergraduate Tuition per HC Enrolled 25,510 29,704,235$ 1,164.42$
Additional SCH Instructed in Total 225 Credit Hours Total Additional Other Revenue 1,000$
Additional Lower Division SCH Enrolled 100 Credit Hours Scholarships (10,447)$ Graduate Tuition Allocation Drivers Units Dollars Dollars/Unit
Additional Upper Division SCH Enrolled 125 Credit Hours Total Incremental UG Revenue 80,735$ Graduate Tuition per HC Enrolled 5,574 19,013,378$ 3,411.08$
Differential Tuition per Upper Division SCH Enrolled 45$ Dollars
Additional Student Fees Total 1,000$ Dollars Graduate Revenue State Appropriations Units Dollars Dollars/Unit
Additional Other Revenue -$ Dollars Total Incremental Graduate Tuition Revenue -$ State Appropriations per SCH Instructed 274,659 17,939,269$ 65.31$
Total Incremental State Appropriations Revenue -$ State Appropriations per HC Enrolled 31,165 4,484,817$ 143.91$
Graduate Students Total Additional Other Revenue -$
Incremental Revenue Drivers INPUT Fellowships -$
Number of Net Additional Grad Students 0 Headcount Total Incremental Grad Revenue -$
Additional SCH Instructed in Total 0 Credit Hours
Additional Student Fees Total -$ Dollars
Additional Other Revenue -$ Dollars Expenses Expenses
Administrative Support Administrative Support Units Dollars Dollars/Unit
Expenses VCAA 3,179$ VCAA (Faculty + Student FTE) 10,480 4,298,972$ 410.22$
Incremental Expense Drivers INPUT AA - Sponsored Research -$ AA - Sponsored Research (G&C Expenses) 5,131,255 865,476$ 0.17$
Number of Additional Faculty 1.0 Headcount Library 2,315$ Library (Faculty + Student FTE) 10,480 3,130,585$ 298.73$
FTE of Additonal Faculty 0.25 FTE Information Technology 3,291$ Information Technology (Total Headcount) 14,906 4,459,516$ 299.18$
Average Cost of FTE Faculty 75,000$ Dollars VCAF - Facilities -$ VCAF - Facilities (SQFT) 258,681 5,192,544$ 20.07$
Number of Additional Administrative Staff 0.0 Headcount VCSS 9,885$ VCSS (Student Headcount) 13,605 13,448,119$ 988.47$
FTE of Additional Administrative Staff 0.00 FTE Exec Leadership & Advancement 5,482$ Exec Leadership & Advancement (Direct Revenues) 192,369,476 13,061,774$ 0.07$
Average Cost of FTE Administrative -$ Dollars VCAF 602$ VCAF (Direct Expenses) 105,199,136 3,207,679$ 0.03$
Additional M&O Expenses 1,000$ Dollars Athletics 141$ Athletics (Student Headcount) 33,530 472,329$ 14.09$
Additional Space Required 0 SQFT Total Incremental Administrative Support Expenses 24,895$
Additional Research Expenditures -$ Dollars Drivers Additional
Additional Other Expenses -$ Dollars Total Incremental Direct Expenses 19,750$ Student FTE (SFTE) 7.50
Total Incremental Direct Expenses 44,645$ Undergraduate Student FTE (UGFTE) 7.50
Faculty + Student FTE (FAC-S-FTE 7.75
Assumptions: Student HC (SHC) 10.00
1.) All students assumed to be in-state Participation Fee (14%)* 12,626$ Total Direct Expenses (D-EX) 19,750$
2.) No incremental change to state appropriations for benefits or special items Net Assignable Square Footage (SQFT) 0
3.) No incremental change to allocated endowment distributions Net Impact 23,465$ Employee Headcount (EMPLHC) 1.0
4.) Incremental revenue and direct expenses equal for research, endowments, and gifts Total Headcount (THC) 11
5.) Does not include potential impacts to subvention Participation Fee 14%
* Participation fee on total incremental revenues less student fees
Scholarships & Fellowships
Undergraduate 14.1% of total tuition
Graduate 14.1% of total tuition
Dean Scenario Planning Tool▪ Results should be shared more broadly through
ongoing campus-wide faculty and community
engagement sessions
▪ The Campus Budget Office should begin
operationalizing the new budget model
▪ Schools and Colleges begin assessing model
outcomes during the FY21 parallel year
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 49
Implementation TimelineRecommended next steps towards implementation are outlined below, with today’s Retreat representing the
culmination of Stakeholder Engagement.
Task Description Status
Due Diligence
and Visioning
(~ 6 Weeks)
• Evaluate the University’s approach to resource allocation, planning, and management
• Assessment of budget model alternatives and an evaluation of the techniques utilized by other
institutions ✓
Financial
Modeling
(~10 Weeks)
• Build-out a pro forma market based budget model, using financial data from fiscal year 2019
• Develop a model to provide executive stakeholders the opportunity to change assumptions and
allocation algorithms for an understanding of the strengths of various incentives and the identification
of unintended consequences ✓
Stakeholder
Engagement
(~18 Weeks)
• Continued stakeholder consensus buying, engagement, and education to develop a well-defined
“UCCS Model”
• Includes steering committee meetings, deans meeting, department meetings, and one-on-one
sessions with key leaders
• Ensure that stakeholders begin to own the new model and acknowledge its potential for success
Underway
Infrastructure
Development
(~12 – 16
Weeks)
• Establishment of governance structures and implementation roadmap
• Continued development of model and support tools; expand model to include FY19 and FY20 budget
• Support administrative and service units to help ensure they are optimally positioned to operate in
new model
Forthcoming
Parallel Process/
Hold Harmless
(1 Year)
• Resource decisions follow the historical model, yet the structure is in place for the redesign model
• Concurrent process helps ensure deans and business managers deeply understand the changed
environment
• Incorporate more formalized model training for relevant stakeholders
• Tweaks to allocation methods may be incorporated if any material issues arise
Forthcoming
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 50
Appendix
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 51
Schools & Colleges Model Summary
Business EducationEngineering & Applied
Science
Letters, Arts, &
Sciences
Nursing & Health
SciencesPublic Affairs
Schools & Colleges
Total
Row Revenue
10 Student Fees 501,133 333,353 579,430 1,554,190 331,381 88,810 3,388,297
11 Direct Student Tuition 45,700 136,806 85,124 606,612 123,263 4,153 1,001,659
12 Tuition Differential Premium 1,686,620 - 1,443,689 77,731 1,871,349 - 5,079,390
13 Allocated UG Tuition 11,622,349 4,621,335 9,580,788 61,674,449 8,117,984 3,745,645 99,362,550
14 Allocated Grad Tuition 3,310,874 5,004,077 2,190,464 2,099,195 2,974,121 1,963,864 17,542,595
15 Allocated UG Scholarships (1,606,037) (585,736) (1,355,894) (7,816,995) (1,211,783) (474,746) (13,051,191)
16 Allocated Grad Scholarships (199,409) (252,716) (127,125) (109,939) (171,845) (99,179) (960,212)
17 Net Tuition and Fees 15,361,229 9,257,120 12,396,477 58,085,242 12,034,471 5,228,547 112,363,086
18 20% Cent. Ret State Appropriations 2,428,720 1,498,487 1,917,519 11,118,964 1,787,427 869,958 19,621,075
19 Earmarked State Appropriations - - 998,804 - - - 998,804
20 State Approps. Allocated for G&C 11,275 566,472 459,769 592,853 348,766 246,068 2,225,203
21 Grants & Contracts 22,661 1,179,227 1,026,321 1,235,377 703,058 494,563 4,661,208
22 F&A Recovery 9,744 95,573 265,512 289,449 150,574 64,801 875,652
23 Gifts 712,286 32,659 583,335 393,255 147,526 161,672 2,030,733
30 Sales, Services, Misc & Other Revenue 290,352 167,935 (2,249) 469,463 1,499,828 30,160 2,455,490
31 Total Revenues 18,836,267 12,797,474 17,645,489 72,184,602 16,671,650 7,095,769 145,231,250
32
33 Expense
34 Salaries & Wages 8,678,362 4,623,669 7,110,036 25,638,064 7,977,413 2,465,122 56,492,666
35 Benefits 105,972 169,439 52,877 287,870 486,492 132,848 1,235,497
36 Travel 163,532 92,394 160,091 495,923 123,101 69,841 1,104,881
37 Utilities - - - 703 - - 703
38 Student Aid 38,300 226,799 584,163 448,370 176,724 5,250 1,479,607
39 Operating Expenses 1,010,378 586,431 1,069,336 2,196,359 701,583 185,726 5,749,813
40 Deferred Maintenance - - - - - - -
41 Book & Periodicals - - - - - - -
42 Intercampus Cost Allocation - - - - - - -
43 Debt Service - Direct - - - - - - -
44 Voluntary Transfers (87,669) (455,126) (223,631) (129,789) (516,035) (48,719) (1,460,969)
45 Total Direct Expenses 9,908,875 5,243,606 8,752,871 28,937,500 8,949,278 2,810,068 64,602,199
46
47 Direct Unit Margin 8,927,391 7,553,869 8,892,617 43,247,102 7,722,371 4,285,700 80,629,051
47.4% 59.0% 50.4% 59.9% 46.3% 60.4%
49 General Fund Benefits Allocation
50 Benefits (2,669,824) (1,306,188) (2,119,741) (7,965,708) (2,093,231) (663,837) (16,818,529)
52 Assignable Debt Service Allocation
53 Debt Service Expense (15,360) (9,669) (535,755) (1,537,493) (333,485) (128,498) (2,560,259)
58 Assignable Facilities Utilities Allocation
59 Utilities (186,888) (53,370) (359,134) (1,319,932) (88,425) (27,444) (2,035,193)
61 Total Unit Margin 6,055,320 6,184,642 5,877,987 32,423,969 5,207,230 3,465,922 59,215,069
62
63 Driver Administrative & Support Unit Allocations
64 FTE - Fac + Stud Academic Affairs (759,949) (375,489) (755,470) (2,879,223) (630,828) (303,074) (5,704,033)
65 GCE - PrU AA - Research (3,566) (179,165) (145,417) (187,509) (110,308) (77,827) (703,792)
66 FTE - Fac + Stud Library (418,293) (206,678) (415,828) (1,584,789) (347,222) (166,819) (3,139,629)
67 HC - Tot Information Technology (572,546) (336,266) (540,705) (2,075,925) (578,795) (279,131) (4,383,367)
68 SQFT - Acad Facilities (223,377) (63,790) (429,254) (1,577,644) (105,690) (32,802) (2,432,556)
69 HCS - Tot Student Success (1,521,880) (832,028) (1,430,180) (5,454,035) (1,471,403) (736,122) (11,445,649)
70 DREV - PrU Executive Leadership & Advancement (1,298,824) (882,429) (1,216,715) (4,977,370) (1,149,566) (489,277) (10,014,181)
71 DEXP - PrU Administration & Finance (466,181) (246,695) (411,794) (1,361,416) (421,035) (132,205) (3,039,325)
72 HCS - Tot Athletics (63,035) (34,462) (59,237) (225,902) (60,944) (30,490) (474,070)
73 Total A&S Unit Allocations (5,327,650) (3,157,002) (5,404,600) (20,323,812) (4,875,791) (2,247,747) (41,336,603)
74
75 Unit Margin After Cost Allocations 727,669 3,027,640 473,387 12,100,156 331,440 1,218,175 17,878,466
77 Deferred Maintenance Allocation
78 No Auxiliaries Deferred Maintenance (706,749) (201,827) (1,358,127) (4,991,551) (334,394) (103,785) (7,696,433)
80 Unit Margin After Depreciation Allocation 20,920 2,825,813 (884,741) 7,108,605 (2,954) 1,114,390 10,182,033
81
82 Tuition Stabilizaton Fund Assessment (877,954) (556,185) (719,133) (3,459,775) (701,557) (316,679) (6,631,282)
83 4.5% Break-Even Tax Rate (781,085) (494,819) (639,788) (3,079,350) (685,277) (281,738) (5,962,056)
84 Cumulative SIP Assessment (1,659,039) (1,051,003) (1,358,921) (6,539,124) (1,386,833) (598,417) (12,593,338)
86 Unit Margin after SIP Assessment (1,638,118) 1,774,810 (2,243,662) 569,481 (1,389,788) 515,973 (2,411,305)
87 SIP Distribution 1,638,118 - 2,243,662 - 1,389,788 - 5,271,568
88 Unit Margin after SIP Distribution - 1,774,810 - 569,481 - 515,973 2,860,263
FY19 Resource Allocation Model - Executive Summary
Schools & Colleges Model Summary
Business EducationEngineering & Applied
Science
Letters, Arts, &
Sciences
Nursing & Health
SciencesPublic Affairs
Schools & Colleges
Total
Row Revenue
10 Student Fees 501,133 333,353 579,430 1,554,190 331,381 88,810 3,388,297
11 Direct Student Tuition 45,700 136,806 85,124 606,612 123,263 4,153 1,001,659
12 Tuition Differential Premium 1,686,620 - 1,443,689 77,731 1,871,349 - 5,079,390
13 Allocated UG Tuition 11,622,349 4,621,335 9,580,788 61,674,449 8,117,984 3,745,645 99,362,550
14 Allocated Grad Tuition 3,310,874 5,004,077 2,190,464 2,099,195 2,974,121 1,963,864 17,542,595
15 Allocated UG Scholarships (1,606,037) (585,736) (1,355,894) (7,816,995) (1,211,783) (474,746) (13,051,191)
16 Allocated Grad Scholarships (199,409) (252,716) (127,125) (109,939) (171,845) (99,179) (960,212)
17 Net Tuition and Fees 15,361,229 9,257,120 12,396,477 58,085,242 12,034,471 5,228,547 112,363,086
18 20% Cent. Ret State Appropriations 2,428,720 1,498,487 1,917,519 11,118,964 1,787,427 869,958 19,621,075
19 Earmarked State Appropriations - - 998,804 - - - 998,804
20 State Approps. Allocated for G&C 11,275 566,472 459,769 592,853 348,766 246,068 2,225,203
21 Grants & Contracts 22,661 1,179,227 1,026,321 1,235,377 703,058 494,563 4,661,208
22 F&A Recovery 9,744 95,573 265,512 289,449 150,574 64,801 875,652
23 Gifts 712,286 32,659 583,335 393,255 147,526 161,672 2,030,733
30 Sales, Services, Misc & Other Revenue 290,352 167,935 (2,249) 469,463 1,499,828 30,160 2,455,490
31 Total Revenues 18,836,267 12,797,474 17,645,489 72,184,602 16,671,650 7,095,769 145,231,250
32
33 Expense
34 Salaries & Wages 8,678,362 4,623,669 7,110,036 25,638,064 7,977,413 2,465,122 56,492,666
35 Benefits 105,972 169,439 52,877 287,870 486,492 132,848 1,235,497
36 Travel 163,532 92,394 160,091 495,923 123,101 69,841 1,104,881
37 Utilities - - - 703 - - 703
38 Student Aid 38,300 226,799 584,163 448,370 176,724 5,250 1,479,607
39 Operating Expenses 1,010,378 586,431 1,069,336 2,196,359 701,583 185,726 5,749,813
40 Deferred Maintenance - - - - - - -
41 Book & Periodicals - - - - - - -
42 Intercampus Cost Allocation - - - - - - -
43 Debt Service - Direct - - - - - - -
44 Voluntary Transfers (87,669) (455,126) (223,631) (129,789) (516,035) (48,719) (1,460,969)
45 Total Direct Expenses 9,908,875 5,243,606 8,752,871 28,937,500 8,949,278 2,810,068 64,602,199
46
47 Direct Unit Margin 8,927,391 7,553,869 8,892,617 43,247,102 7,722,371 4,285,700 80,629,051
47.4% 59.0% 50.4% 59.9% 46.3% 60.4%
49 General Fund Benefits Allocation
50 Benefits (2,669,824) (1,306,188) (2,119,741) (7,965,708) (2,093,231) (663,837) (16,818,529)
52 Assignable Debt Service Allocation
53 Debt Service Expense (15,360) (9,669) (535,755) (1,537,493) (333,485) (128,498) (2,560,259)
58 Assignable Facilities Utilities Allocation
59 Utilities (186,888) (53,370) (359,134) (1,319,932) (88,425) (27,444) (2,035,193)
61 Total Unit Margin 6,055,320 6,184,642 5,877,987 32,423,969 5,207,230 3,465,922 59,215,069
62
63 Driver Administrative & Support Unit Allocations
64 FTE - Fac + Stud Academic Affairs (759,949) (375,489) (755,470) (2,879,223) (630,828) (303,074) (5,704,033)
65 GCE - PrU AA - Research (3,566) (179,165) (145,417) (187,509) (110,308) (77,827) (703,792)
66 FTE - Fac + Stud Library (418,293) (206,678) (415,828) (1,584,789) (347,222) (166,819) (3,139,629)
67 HC - Tot Information Technology (572,546) (336,266) (540,705) (2,075,925) (578,795) (279,131) (4,383,367)
68 SQFT - Acad Facilities (223,377) (63,790) (429,254) (1,577,644) (105,690) (32,802) (2,432,556)
69 HCS - Tot Student Success (1,521,880) (832,028) (1,430,180) (5,454,035) (1,471,403) (736,122) (11,445,649)
70 DREV - PrU Executive Leadership & Advancement (1,298,824) (882,429) (1,216,715) (4,977,370) (1,149,566) (489,277) (10,014,181)
71 DEXP - PrU Administration & Finance (466,181) (246,695) (411,794) (1,361,416) (421,035) (132,205) (3,039,325)
72 HCS - Tot Athletics (63,035) (34,462) (59,237) (225,902) (60,944) (30,490) (474,070)
73 Total A&S Unit Allocations (5,327,650) (3,157,002) (5,404,600) (20,323,812) (4,875,791) (2,247,747) (41,336,603)
74
75 Unit Margin After Cost Allocations 727,669 3,027,640 473,387 12,100,156 331,440 1,218,175 17,878,466
77 Deferred Maintenance Allocation
78 No Auxiliaries Deferred Maintenance (706,749) (201,827) (1,358,127) (4,991,551) (334,394) (103,785) (7,696,433)
80 Unit Margin After Depreciation Allocation 20,920 2,825,813 (884,741) 7,108,605 (2,954) 1,114,390 10,182,033
81
82 Tuition Stabilizaton Fund Assessment (877,954) (556,185) (719,133) (3,459,775) (701,557) (316,679) (6,631,282)
83 4.5% Break-Even Tax Rate (781,085) (494,819) (639,788) (3,079,350) (685,277) (281,738) (5,962,056)
84 Cumulative SIP Assessment (1,659,039) (1,051,003) (1,358,921) (6,539,124) (1,386,833) (598,417) (12,593,338)
86 Unit Margin after SIP Assessment (1,638,118) 1,774,810 (2,243,662) 569,481 (1,389,788) 515,973 (2,411,305)
87 SIP Distribution 1,638,118 - 2,243,662 - 1,389,788 - 5,271,568
88 Unit Margin after SIP Distribution - 1,774,810 - 569,481 - 515,973 2,860,263
FY19 Resource Allocation Model - Executive Summary
Schools & Colleges Model Summary
Business EducationEngineering & Applied
Science
Letters, Arts, &
Sciences
Nursing & Health
SciencesPublic Affairs
Schools & Colleges
Total
Row Revenue
10 Student Fees 501,133 333,353 579,430 1,554,190 331,381 88,810 3,388,297
11 Direct Student Tuition 45,700 136,806 85,124 606,612 123,263 4,153 1,001,659
12 Tuition Differential Premium 1,686,620 - 1,443,689 77,731 1,871,349 - 5,079,390
13 Allocated UG Tuition 11,622,349 4,621,335 9,580,788 61,674,449 8,117,984 3,745,645 99,362,550
14 Allocated Grad Tuition 3,310,874 5,004,077 2,190,464 2,099,195 2,974,121 1,963,864 17,542,595
15 Allocated UG Scholarships (1,606,037) (585,736) (1,355,894) (7,816,995) (1,211,783) (474,746) (13,051,191)
16 Allocated Grad Scholarships (199,409) (252,716) (127,125) (109,939) (171,845) (99,179) (960,212)
17 Net Tuition and Fees 15,361,229 9,257,120 12,396,477 58,085,242 12,034,471 5,228,547 112,363,086
18 20% Cent. Ret State Appropriations 2,428,720 1,498,487 1,917,519 11,118,964 1,787,427 869,958 19,621,075
19 Earmarked State Appropriations - - 998,804 - - - 998,804
20 State Approps. Allocated for G&C 11,275 566,472 459,769 592,853 348,766 246,068 2,225,203
21 Grants & Contracts 22,661 1,179,227 1,026,321 1,235,377 703,058 494,563 4,661,208
22 F&A Recovery 9,744 95,573 265,512 289,449 150,574 64,801 875,652
23 Gifts 712,286 32,659 583,335 393,255 147,526 161,672 2,030,733
30 Sales, Services, Misc & Other Revenue 290,352 167,935 (2,249) 469,463 1,499,828 30,160 2,455,490
31 Total Revenues 18,836,267 12,797,474 17,645,489 72,184,602 16,671,650 7,095,769 145,231,250
32
33 Expense
34 Salaries & Wages 8,678,362 4,623,669 7,110,036 25,638,064 7,977,413 2,465,122 56,492,666
35 Benefits 105,972 169,439 52,877 287,870 486,492 132,848 1,235,497
36 Travel 163,532 92,394 160,091 495,923 123,101 69,841 1,104,881
37 Utilities - - - 703 - - 703
38 Student Aid 38,300 226,799 584,163 448,370 176,724 5,250 1,479,607
39 Operating Expenses 1,010,378 586,431 1,069,336 2,196,359 701,583 185,726 5,749,813
40 Deferred Maintenance - - - - - - -
41 Book & Periodicals - - - - - - -
42 Intercampus Cost Allocation - - - - - - -
43 Debt Service - Direct - - - - - - -
44 Voluntary Transfers (87,669) (455,126) (223,631) (129,789) (516,035) (48,719) (1,460,969)
45 Total Direct Expenses 9,908,875 5,243,606 8,752,871 28,937,500 8,949,278 2,810,068 64,602,199
46
47 Direct Unit Margin 8,927,391 7,553,869 8,892,617 43,247,102 7,722,371 4,285,700 80,629,051
47.4% 59.0% 50.4% 59.9% 46.3% 60.4%
49 General Fund Benefits Allocation
50 Benefits (2,669,824) (1,306,188) (2,119,741) (7,965,708) (2,093,231) (663,837) (16,818,529)
52 Assignable Debt Service Allocation
53 Debt Service Expense (15,360) (9,669) (535,755) (1,537,493) (333,485) (128,498) (2,560,259)
58 Assignable Facilities Utilities Allocation
59 Utilities (186,888) (53,370) (359,134) (1,319,932) (88,425) (27,444) (2,035,193)
61 Total Unit Margin 6,055,320 6,184,642 5,877,987 32,423,969 5,207,230 3,465,922 59,215,069
62
63 Driver Administrative & Support Unit Allocations
64 FTE - Fac + Stud Academic Affairs (759,949) (375,489) (755,470) (2,879,223) (630,828) (303,074) (5,704,033)
65 GCE - PrU AA - Research (3,566) (179,165) (145,417) (187,509) (110,308) (77,827) (703,792)
66 FTE - Fac + Stud Library (418,293) (206,678) (415,828) (1,584,789) (347,222) (166,819) (3,139,629)
67 HC - Tot Information Technology (572,546) (336,266) (540,705) (2,075,925) (578,795) (279,131) (4,383,367)
68 SQFT - Acad Facilities (223,377) (63,790) (429,254) (1,577,644) (105,690) (32,802) (2,432,556)
69 HCS - Tot Student Success (1,521,880) (832,028) (1,430,180) (5,454,035) (1,471,403) (736,122) (11,445,649)
70 DREV - PrU Executive Leadership & Advancement (1,298,824) (882,429) (1,216,715) (4,977,370) (1,149,566) (489,277) (10,014,181)
71 DEXP - PrU Administration & Finance (466,181) (246,695) (411,794) (1,361,416) (421,035) (132,205) (3,039,325)
72 HCS - Tot Athletics (63,035) (34,462) (59,237) (225,902) (60,944) (30,490) (474,070)
73 Total A&S Unit Allocations (5,327,650) (3,157,002) (5,404,600) (20,323,812) (4,875,791) (2,247,747) (41,336,603)
74
75 Unit Margin After Cost Allocations 727,669 3,027,640 473,387 12,100,156 331,440 1,218,175 17,878,466
77 Deferred Maintenance Allocation
78 No Auxiliaries Deferred Maintenance (706,749) (201,827) (1,358,127) (4,991,551) (334,394) (103,785) (7,696,433)
80 Unit Margin After Depreciation Allocation 20,920 2,825,813 (884,741) 7,108,605 (2,954) 1,114,390 10,182,033
81
82 Tuition Stabilizaton Fund Assessment (877,954) (556,185) (719,133) (3,459,775) (701,557) (316,679) (6,631,282)
83 4.5% Break-Even Tax Rate (781,085) (494,819) (639,788) (3,079,350) (685,277) (281,738) (5,962,056)
84 Cumulative SIP Assessment (1,659,039) (1,051,003) (1,358,921) (6,539,124) (1,386,833) (598,417) (12,593,338)
86 Unit Margin after SIP Assessment (1,638,118) 1,774,810 (2,243,662) 569,481 (1,389,788) 515,973 (2,411,305)
87 SIP Distribution 1,638,118 - 2,243,662 - 1,389,788 - 5,271,568
88 Unit Margin after SIP Distribution - 1,774,810 - 569,481 - 515,973 2,860,263
FY19 Resource Allocation Model - Executive Summary
Model DevelopmentThe process to develop a customized model is an iterative one during which Huron and UCCS relied heavily upon
community feedback for each model iteration, which culminated in a highly customized model that reflects the
unique culture and strengths of the University.
2
▪ Highly customized incentives to
drive mission-critical needs
▪ Fits with University culture and
strengths
▪ Features strategic and mission
enhancement fund for
University priorities
31
Baseline Model Customized ModelActuals Model
▪ No use of allocation rules
▪ Reflects general ledger activity
▪ Reorganization of transactions
to align with unit and account
definition
▪ All data-driven allocation rules
▪ Reflects internal economy
▪ Baseline for sensitivity analysis
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 52
Budget Process OverviewThe table below outlines the budget development process milestones and the groups with primary accountability
and responsibility for their completion.
Strong central leadership and relevant feedback from key stakeholders will ensure that the
budget process is equitable for all units and allow for mission-critical and strategic growth.
Course
Completion
35%
Inst. Support
10%
Acad. Support
10%
M&O
10%
Student
Success
35%
Model Development
Budget Modeling & Scenario Planning
Shared Support Unit Budgeting
Revenue Unit Budgeting
Strategy & Mission
Enhancement Fund
Ongoing Budget Management
Central Budget OfficeCentral Support Unit
EngagementDeans (Academic Units) Budget Update Group Central Budget Office
• Undergraduate tuition
forecasted for
forthcoming year (top-
down)
• Central Support Units
prepare budgets and
supplementary
documentation, then
present materials to
the Support Unit
Allocation Committee
• Schools/college receive
allocated revenue and
Central Support Unit
amounts, then build
budgets for direct
revenues and expenses
(bottom-up)
• Academic Unit
budgets are reviewed
and shared, and
negative-margin units
negotiate to receive an
appropriate amount of
the SIP funds to fill any
anticipated shortfalls
• Reports provided to
Academic Units on an
ongoing basis to monitor
actual revenues and
expenses against budgets;
Central Support Unit
allocation amounts will
remain fixed
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 53
AppropriationsHuron has helped several other institutions determine the level at which research could be subsidized. This
calculated starting point has ranged between 50/50 and 88/12.
Academic
Research
Distribution of General State
Appropriations Examples
100%
0%
0%
100%
Course
Completion
35%
Acad. Support
10%
Baseline
(Starting Point)
Customized
(80/20)Customized
23 3
General State Approp. to Academic Programs
▪ Promotes externally funded research
▪ Often aligns with legislative intent
▪ Creates a lopsided funded model
▪ Increases risk for research portfolio
General State Approp. to Research
▪ Encourages mission-based activities
▪ Recognizes the need to subsidize research
▪ Optically unfeasible (legislative intent)
▪ May place a large burden on instruction portfolio
50/50
56/44
64/36
University B
Medical School
80/20
University C
Medium Research
University D
Higher Research
University E
High Research
90/10
University A
Lower Research
88/12
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 54
46%44%
20%
2%
24%
0%
10%
20%
30%
40%
50%
Calculated Negotiated Effective (Avg.)
FY19 Indirect Cost Recovery Rates
Sponsored Programs Support CalculationsA review of UCCS’ indirect cost recovery rates served as a starting point for discussing how to use state
appropriations to support sponsored research programs.
10% 90%
UCCS General State Approp. ($28.3M)
Research Subsidy: $2.8MRemaining State Approp. : $25.2M
▪ Research subsidy rate of 24% is applied to the primary units’ total sponsored expenses of $4.5 million to calculate a
minimum research subsidy of $2.8 million, representing 10% of general state appropriations
Source: Calculated rate is from UCCS’s latest F&A Rate Proposal, effective 2016-2020; effective rate was provided by the Office of Research and is for FY19.
Row 20
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 55
Cost Pool Allocations: ExampleIncentive-based budget models use a variety of metrics to allocate support unit expenditures to the primary units.
The following is an illustrative example for consideration.
Illustrative Allocation: Square Footage (SQFT)
▪ Universities often choose to allocate centrally-managed facilities costs to primary units based on square
footage, as it best depicts the fluctuation of expenditures for the given unit (economic reality). In this
example, the allocation formula is as follows1
( )
−=
nnn SUSU
PU
PU
PU esExpenditurRevenuesSQFT
SQFTAllocation
n all of Sum
n
Primary Unit’s share of
square feet
Support Unit’s net
expenditures
1 Allocation Formula Notes:
PU = Primary Unit; SU = Support Unit
For PUn, n represents each individual primary unit (i.e. academic units, centers & institutes, auxiliaries)
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 56
Pass ThroughPer the Executive Team’s recommendation, certain funds have been reclassified as Pass Through in the budget
model because the primary and support units do not have spending authority over these funds.
Reclassification Description
Federally Funded Student
Aid
($25.5MM)
• Reclassified $25.5MM of state-funded aid (including PELL, SEOG, KEES, etc.)
revenue and expense to Pass Through.
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 57
7.4 Year-over-Year Subvention Decisions While subvention is set on an annual basis, it is recommended that Academic Unit Leadership meet with the
Chancellor/Provost/VC of Administration & Finance to develop rolling 3-year guidance, which will prevent an
annual formulaic dollar-for-dollar reduction in subvention in relation to positive margins and/or prior-year
carryforwards.
▪ While it is expected that the degree to which subvention occurs will generally decrease over time, this
change is not based on a formula, but data-informed, strategic decisions. As such, an increase in revenues
would not necessarily result in a formulaic and corresponding decrease to subvention.
▪ The degree to which a school is subvented is neither inevitable nor constant over time. As the goal is to
increase strategic initiatives and decrease subvention, conversations with Chancellor/Provost/VC of
Administration & Finance during the initial budget setting process will inform the proposed subvention
requirements over a rolling 3-year timeframe.
▪ While agreements are subject to adjustment in the event of large, external shifts to anticipated revenues (state
funding cuts, tuition freezes, etc.), rolling subvention plans provide time for deans to realize multi-year
growth and cost reduction strategies without substantial changes in subvention.
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 58
Model StructureAn incentive-based model requires the identification of units to serve as the drivers of revenue-generating activities; other units are expected to support the activities of revenue generating units.
Central Support Units
▪ Limited-to-no ability to influence
revenue
▪ Provide services and/or support to
academic, research, and auxiliary
units
▪ No allocation of central costs
▪ Accountable for optimal service
levels
▪ Encouraged to justify funding
levels through benchmarking
▪ Accountable for fiscal
performance
▪ IT, HR, and Facilities may have
service-level agreements with
select primary units
Hybrid Units
▪ Units that do not fall cleanly into
one of the other categories; some
operations may act like a primary
unit while others act like a support
unit
▪ For simplicity and consistency,
these are not typically
recommended
Primary Units
▪ Ability to influence revenue
generation:
- Price
- Quantity (not captive market)
▪ Cover direct costs with generated
revenue
▪ Fully-allocated central (support
unit) costs
▪ Accountable for performance,
retaining both surpluses and
losses
▪ Pay subvention tax
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 59
Executive Budget CommitteeMany institutions have an Executive Budget Committee that recommends a university-wide budget, including subvention fund allocations, to the Chancellor.
Roles and Charges
▪ Reviews support unit budget proposals
recommended by the Support Unit Allocation
Committee
▪ Recommends a unified support unit budget to the
Chancellor if the Chancellor is not part of the group
▪ Reviews executive summary of primary unit
financial plans, including strategic fund requests, from
the budget hearings in February and March
▪ In April, recommends a university-wide budget to
the Chancellor
▪ Reviews other proposals from various governance
committees for potential Chancellor approval
Example Membership
▪ Executive Leadership Team
▪ Budget Director
▪ Academic Affairs Reps
Chancellor
Campus Support Unit
Subcomittee
Evolved UBAC
Academic
Subcommittee
Executive Budget
Commitee
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 60
Evolved UBAC SubcommitteesProposed subcommittees for the Evolved UBAC play important governance, advisory, and support roles related to academic and support unit budget development, concerns arising from model incentives, and service levels.
Roles and Charges
▪ Campus Support Unit Subcommittee proposed roles
include support for unit budget development,
forwarding financial requirements/requests to UBAC,
and addressing service concerns.
▪ Academic Subcommittee proposed roles include
supporting academic entity budget development and
addressing concerns related to program offerings and
revenue allocations.
▪ Proposed subcommittees provide recommendations
and guidance reflective of broad stakeholder feedback
to the broader University Budget Advisory Committee
Proposed Membership To Include
▪ Faculty & Chairs
▪ Staff Council
representatives
▪ Professional Exempt
Staff Association
representatives
▪ Students
▪ Academic & Associate
Deans
▪ Budget Chair
▪ UBAC Chair
Chancellor
Campus Support Unit
Subcomittee
Evolved UBAC
Academic
Subcommittee
Executive Budget
Commitee
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 61
Project Team
Andrew Laws,
Managing DirectorWill Campbell,
Project Consultant
Laura Humberger,
Project Director
Glenn McLaurin,
Project Manager
▪ Experience: 16+ years
▪ Focus Area: Andrew has
helped more than 45
universities optimize
institutional resources
through financial modeling
and budget planning
initiatives; revenue
enhancement and cost
reduction initiatives; and
organizational assessment
and business process
redesign initiatives.
▪ Recent Clients: University
of Denver, University of St.
Thomas, University of
Wyoming, University of
Virginia, Auburn University,
University of North Dakota,
University of Kentucky
▪ Experience: 1+ years
▪ Focus Area: Will has
supported academic
institutions on a variety of
projects, which include long-
term financial feasibility
assessments, budget
assessment, and academic
portfolio management.
▪ Recent Clients: Oklahoma
State Regents for Higher
Education, Watkins of Art
▪ Experience: 25+ years
▪ Focus Area: Laura has
worked on a variety of
finance-related projects,
which include budget model
redesign, debt and capital
planning, business process
automation and efficiency,
financial report development,
strategic planning, fund
balance analysis,
governance and risk
management, and service
delivery design
▪ Recent Clients: University
of Texas – San Antonio,
Oregon State University,
Montana State University
▪ Experience: 7+ years
▪ Focus Area: Glenn has
experience supporting
academic institutions with
financial reporting,
institutional financial and
performance assessments,
resource allocation
management, and business
office support
▪ Recent Clients: Oklahoma
State Regents for Higher
Education, Watkins College
of Art, University System of
Georgia, University of North
Carolina – Chapel Hill
[email protected] [email protected] [email protected] [email protected]
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 62
Steering CommitteeThe Steering Committee will act as a decision-making resource that can speak and act on behalf of the campus.
The primary role of the Committee is to provide guidance for this initiative, to review project status reports, and to
validate the opportunities presented.
Name Title
Tom Christensen Provost and Executive Vice Chancellor for Academic Affairs (Co-Chair)
Chuck Litchfield Vice Chancellor, Administration & Finance
Kevin Laudner Dean, Helen and Arthur E. Johnson Beth-El College of Nursing &
Health Sciences
George Reed Dean, School of Public Affairs
Rob Block Associate Dean, College of Business
Alex Ilyasova Associate Dean, College of Letters, Arts, & Sciences
Laura Edwards Finance Manager, College of Engineering & Applied Science
April Keller Finance Manager, College of Education
Dale DeBoer Associate Professor, College of Letters, Arts, & Sciences
Sylvia Mendez Associate Professor & Department Chair, College of Education
Carlos Garcia Interim Vice Chancellor, Student Success
Corrie West Director of Development, University Development
Christina Jimenez Associate Professor, College of Letters, Arts, & Sciences
© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 63
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