Transparent, Activity-Based Budget System
www.usask.ca/tabbs
Session 5: TABBS Operating Budget Model
April 19, 2012
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Overview:

Review of Critical Design Features’ Recommendations








Example of College of Pharmacy and Nutrition
Format of TABBS Operating Budget Model
Scenario Analysis example
Phase Three
Next Steps
Question/Answer
Breakout Session
Closing
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Within TABBS model:
Operating Budget 2010/11
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Strategic Envelope
Academic Priorities Fund
Including Strategic Research Fund
(1.5% of operating budget revenue)
Strategic Envelope
(3.5% of operating budget revenue)
RenewUS
(1% of operating budget revenue)
Balancing Fund
Strategic Initiatives
(1% of operating budget revenue)
Other Strategic Initiatives
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Within TABBS model:
 All expenses allocated out
Indirect
Costs:
42%
Direct
Costs:
57%
Operating Budget 2010/11, $387M
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Review of Critical Design Features



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Responsibility Centres
Provincial Operating Grant Allocation
Integration of Research
Tuition Revenue Allocation
Expenses
Strategic Envelope
Governance
Transition/Implementation
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TABBS Operating Budget Model
Responsibility Centres (RCs): Overview

TABBS is a “responsibility centre management” model
a)
b)
c)
Places unit-level control within the budgeting structure and
management structure
Aligns authority over revenues and costs with the
responsibility for revenues and costs (i.e. to Responsibility
Centres)
The establishment of Responsibility Centres is a key
component of responsibility centre management, planning,
and budgeting
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TABBS Operating Budget Model
RC Recommendation

A Revenue Centre is an RC whereby the majority of
activities result in the generation of external revenues.

A Support Centre is an RC that generates little or no
external revenue but which provide critical services to
support the activities of the Revenue Centres and other
Support Centres.
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TABBS Operating Budget Model
Current RC Classification (condensed)
Revenue Centres
Colleges/schools
Some research centres
(e.g. Toxicology Centre, VIDO)
Support Centres
Administrative units
(e.g. FSD, FMD, ITS, HR, IPA)
College of Graduate Studies & Research
Consumer Services Division
University Library/University Archives
CCDE (Community Programming/
Language Centre)
President’s Office (and other VP offices)
Etc…
CCDE (credit programming)
Etc…
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Example: College of Pharmacy & Nutrition
COLLEGE OF PHARMACY & NUTRITION
REVENUE CENTRE
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TABBS Operating Budget Model
Provincial Operating Grant Recommendation



Allocate the core provincial operating grant, less a
portion for strategic initiatives, to revenue centers
based on their teaching and research activity as
compared to other revenue centres.
Allocate the directed funding, less a portion for
strategic initiatives, to the revenue centres as indicated
in the provincial grant.
Allocate the targeted funding as instructed in the
provincial grant.
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TABBS Operating Budget Model
Provincial Operating Grant Allocation
Infrastructure
Instruction 70%
25%
Instruction
45%
10%
Research 30%
Research
20%
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TABBS Operating Budget Model
Allocation of Instruction: Steps
1.) Determine Cost Support for faculty & staff support
resources (based on # of FLEs and ratios per discipline)
 Calculate as percentage of all revenue centres
2.) % of Cost support x Operating Grant amount
(including tuition expectation)
3.) Minus Tuition Expectation (per discipline factors)
= Instruction allocation of Operating Grant
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TABBS Operating Budget Model
Allocation of Instruction
Step 1: Support for Faculty Resources
College of
Pharmacy
& Nutrition
FLEs
Faculty FTE
Entitlement
Instructional
Support
Cost Total Instruction
(FLEs x student :
faculty ratio)
(FTEs x salary x
discipline multiplier*)
(total faculty +
instructional support)
UG
460.9
17.94
Masters
26.3
2.02
Doctoral
17.3
2.10
•
•
•
•
$2,101,670 +
$1,032,215
$1,032,215 =
$3,133,885
Teaching activity will be measured by student full-load equivalency
Weights and multipliers employed by SUFM will be used
Social Sciences is the baseline: 1 faculty resource for every 40 FLEs
* faculty ratio and discipline multiplier differ based on discipline
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TABBS Operating Budget Model
Allocation of Instruction
Total Tuition Expectation:
$76,321,441
Step 2: Tuition Expectation
College of
Pharmacy
&
Nutrition
FLEs
UG
460.9
Masters
26.3
Doctoral
17.3
Tuition Weightings
Tuition
Expectation
(FLEs x tuition fee unit factorper discipline)
(tuition weighting
x avg tuiton fee)
Tuition adj for
Grant amount
(% tuition exp x
grant’s total tuition
expectation)
662.2
$3,007,938
29.4
$2,849,722
Or 3.7%
19.4
• Tuition Expectation employed by SUFM will be used
• Highlighted weighting represents the base tuition fee
• *Tuition fee unit factor varies per discipline
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TABBS Operating Budget Model
Allocation of Instruction
Instruction portion of Grant
(incl tuition): $220,905,830
Step 3: Instruction Portion
College
Pharmacy
Cost Total Instruction
(step 1)
$3,133,885
% of
Cost
Total
3.77
Tuition
Expectation
adj for Grant
amount
(step 2)
$2,849,722
Instruction
Portion of
Grant
(% x Total Instruction
portion of Actual
Grant – Tuition adj)
$5,468,748
% of
allocation
3.78
• Total Instruction portion of actual grant includes the instructional
support and tuition expectation
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TABBS Operating Budget Model
Allocation of Research Portion
Tri-Agency &
Non-Tri-Agency
Activity
33%
Tri-Agency
Activity
67%
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TABBS Operating Budget Model
Allocation of Research
• 67% ($41M) allocated on research dollar of
total Tri-Agency
• 33% ($21M) allocated on research dollar of
total Tri-Agency plus non-Tri-Agency
Step 1
Pharmacy
Step 2
Pharmacy
Tri
Non-Tri
Total Tri & Non-Tri
Total %
$450,173
$971,793
$1,421,966
1.8%
67%
33%
Total Distribution
Total %
$975,443
$363,948
$1,339,391
2.2%
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Example: College of Pharmacy & Nutrition
COLLEGE OF PHARMACY & NUTRITION
PROVINCIAL OPERATING GRANT:
INSTRUCTION
$5,468,748
RESEARCH
$1,339,391
DIRECTED FUNDING
$0
TARGETED FUNDING
$0
TOTAL AMOUNT ALLOCATED:
$ 6,808,139
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TABBS Operating Budget Model
Tuition Recommendation

To allocate tuition revenue to RCs based on enrolment
and instructional activity for undergraduate students,
and enrolment, instruction, and supervisory activity for
graduate students as follows:
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TABBS Operating Budget Model
Tuition Allocation Methodology
PHARMACY
Undergraduate/
Non-Degree
Enrolment
25%
Instruction
75%
Student’s College of Enrolment
Home College/Unit of Instructor of
Course
$721,194
$2,130,115
$2,851,309
Tuition
Enrolment
40%
Graduate
Instruction
20%
Supervision
40%
Student’s College of Enrolment
$63,782
Home College/Unit of Instructor of
Course2
$28,654
Supervisor’s College/Unit1
$72,279
$164,715
1. If no supervisor is assigned, or the supervisor’s home college/unit cannot be determined, then 40% will default to the student’s college of enrolment.
2. If no instructional activity exists (i.e. no active courses enrolled), then 20% will default to the student’s college of enrolment.
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Example: College of Pharmacy & Nutrition
COLLEGE OF PHARMACY & NUTRITION
TOTAL REVENUE ALLOCATED IN TABBS:
PROVINCIAL OPERATING GRANT $ 6,808,139
TUITION REVENUE
$ 3,016,024
TOTAL REVENUE ALLOCATED
$ 9,824,163
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TABBS Operating Budget Model
Revenue Centre within TABBS:
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TABBS Operating Budget Model
Expenses Recommendation



Direct and indirect expenses will be allocated to the
revenue centers whose activities generate those
expenditures.
Direct expenditures will continue to be directly funded
by revenue centres.
Indirect expenditures will be allocated using activity
measures (cost drivers) that recognizes the revenue
centre’s proportionate share of indirect expenditures.
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Cost Bins:
TABBS Operating Budget Model
Indirect costs are placed into common cost groupings (cost bins)
based upon activity supported by those costs (e.g. support of
students, support of faculty and staff, etc.)
Expense Source
Cost Bins
Student Support Bin
Budgeted Direct
Expenses of Support
Centres
and
Central Expense Funds
Faculty/Staff Support Bin
Research Support Bin
Occupancy Costs Bin
General Support Bin
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TABBS Operating Budget Model
Indirect Cost Allocation
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TABBS Operating Budget Model
Indirect Cost Allocation Continued…
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Example: College of Pharmacy & Nutrition
COLLEGE OF PHARMACY & NUTRITION
INDIRECT COSTS
Research Support Cost Bin
Activity
Allocation
Driver
1,303,474
$
0.2032
264,901
515
$
2,315
1,192,472
61
$
727
44,340
6,267,087
$
0.0639
400,622
General Occupancy Costs Sub-bin- based on total NASM
3,578
$
107
381,592
Utilities Sub-bin- based on NASM per building for RC
Electrical NASM
Steam NASM
Chilled Water NASM
Water NASM
Gas NASM
Heating-other NASM
3,578
3,578
3,578
3,578
3,578
3,578
Based on Research Expenditures ($)
Student Support Cost Bin (incl Classroom Costs)
$
Based on Student Headcount Enrolled -ALL
Based on Student Headcount Enrolled -Graduate
Faculty/Staff Support Cost Bin
Based on Salary Expenditures ($)
Occupancy Cost Bin
$
Caretaking Sub-bin- based on NASM per building for RC
Leases Sub-bin- based on NASM per building for RC
Health Sciences Holding Bin
214,234
3,578
-
$
-
32
115,391
-
Based on Operating Expenditures ($)
General Support Cost Bin
$
8,570,158
$
0.0060
51,268
Based on Operating Expenditures ($)
Total Indirect Costs
$
8,570,158
$
0.0749
641,907
3,306,728
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TABBS Operating Budget Model
TABBS Model Reference Level (TMRL)

Implied funding level through the allocation of
operating budget revenue and allocation of indirect
expenses in TABBS.

Provincial Operating Grant Allocation + Tuition Revenue
Allocation – Indirect cost allocation = TMRL
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Example: College of Pharmacy & Nutrition
COLLEGE OF PHARMACY & NUTRITION
TABBS MODEL REFERENCE LEVEL (TMRL)
TOTAL REVENUE ALLOCATION $ 9,824,163
- TOTAL INDIRECT COSTS $3,306,728
= TABBS MODEL REFERENCE LEVEL: $ 6,517,435
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TABBS Operating Budget Model
Current Operating Budget Allocation

Historically adjust annually for
a)
b)
c)

Salary/benefit incremental increases
Economic changes
Strategic priority funding
For Pharmacy and Nutrition: $4,822,710
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Example: College of Pharmacy & Nutrition
COLLEGE OF PHARMACY & NUTRITION
DIFFERENCE BETWEEN TMRL & CURRENT
BUDGET ALLOCATION
TABBS MODEL REFERENCE LEVEL $ 6,517,435
- CURRENT OPERATING BUDGET ALLOCATION
(DIRECT COSTS) $4,822,710
= DIFFERENCE BETWEEN TMRL & CURRENT
BUDGET ALLOCATION $ 1,694,725
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What the Model is and is not

Represents actual activity levels in the past
a)
b)



How revenue actually is received by the university
Actual operating budgets of support centres and revenue
centres
Does not represent planned activity levels
Is not representative of the revenue centre’s
consolidated budget
Is not to be viewed on its own, but in conjunction with
other tools and judgment
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What does this mean to units?



Better ability to plan for change with greater certainty
as to the potential impacts on revenue
Greater correlation between their teaching and
research activity and their budgets
Additional changes are expected, from consultation
with other universities…see next slide
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From Other Universities--Changes We
Anticipate:



improved clarity around the cost of specific activity has
enhanced interdivisional collaboration;
units tend to pay more attention to details, such as
increasing revenue or leveraging opportunities;
conversations with funders such as the governments
are enhanced by the open, transparent process
including the data created by the model;
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From Other Universities--Changes We
Anticipate continued…





increased transparency and understanding within units
of the overall resources available to the university and
to the units;
there are opportunities for divisions to collaborate to
utilize capital and infrastructure more effectively;
increase in energy conservation and sustainability
practices;
promotion of collaborative research; and,
interdisciplinary growth.
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Scenario Analysis

Case reviewed: new undergraduate program in
Pharmacy & Nutrition
a)
b)
25 new students
1 new faculty member
•
c)

Tri-Agency and non-Tri-Agency research plus instructs
Half-time staff member
Review the effect of the new revenue and expenses in
the model, holding all else constant.
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Scenario Analysis: Statistics


25 FLEs
Tuition rate of $8,207 for 35 credits
a)
b)




10 credits are instructed by College of Medicine
25 credits are instructed by College of Pharmacy & Nutrition
1.0 FTE new faculty member with $35,000 Tri-Agency
research and $30,000 non-Tri-Agency research
0.5 FTE staff member – CUPE phase 4
Non-salary costs $2,500 per FTE
No additional space cost
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Scenario Analysis: New Program in Pharmacy
Increased Revenue
Provincial Operating Grant Allocation- Instruction
$250,606
Provincial Operating Grant Allocation- Research
$90,243
Total Provincial Operating Grant Allocation
$340,849
Tuition Revenue – Undergraduate: Enrolment
$51,294
Tuition Revenue – Undergraduate: Instruction
$109,913
Total Tuition Revenue – Undergraduate
Total Revenue Allocation
Based on 2010/2011 Operating Budget; rates
$161,206
$502,055
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Scenario Analysis: New Program in Pharmacy
Increased Cost
Indirect Costs
Research Support Bin
$13,208
Student Support Bin
$57,875
Faculty/Staff Bin
$11,146
Occupancy Bin
Health Sciences Holding Bin
General Support Bin
Total – Indirect Costs
Based on 2010/2011 Operating Budget; rates
$0
$1,069
$13,346
$96,644
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Scenario Analysis: New Program in Pharmacy
Result:
Total Revenue Allocation
Total Indirect Costs
$502,055
$96,644
TABBS Model Reference Level
$405,411
Additional Direct Costs
$178,183
Difference b/w TMRL & Current Budget Allocation
$227,228
Based on 2010/2011 Operating Budget; rates
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Phase Three

Refinement of Model
a) Adherence to principles: fall 2012
b) Data validation (sources, definitions): summerwinter 2012/13
c) Error corrections: 2012-13
* Consultation points with focus groups: summer 2012; winter
2012/13
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Phase Three

Implementation of Model
a)
Training of Model
•
•
•
b)
Develop prototype of model: winter 2012/13
Documentation: 2012/13
Training sessions: spring 2013
Establishment of Support Unit Budget Review Committee
•
Determine membership: Fall 2012

•
Develop terms of reference: Fall 2012

•
c)
Consultation Fall 2012
Consultation Fall 2012
Start meeting: winter/spring 2013
Developing Reports: 2012/13
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Next Steps
Online Review Period:
 April 20 to April 30


www.usask.ca/tabbs
Questions/answers facilitated by email with response
during the Online Review Period.


Website’s “online review” page
tabbs@usask.ca
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Questions/Comments?
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Breakout Session




9 flip chart stations
3 questions being asked (3 stations per question)
Please take 10 mins on each question
Team member will gather feedback
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Questions:
1.
2.
3.
With the knowledge of each critical design feature’s
recommendation and presentation of the TABBS Operating
Budget Model today, does the model adhere to the principles
of the model? [please see a handout of the principles in your
packet]
How do you see TABBS linking budgets to cycles of integrated
planning and ensuring resources are allocated to strategic
priorities?
Collaboration and interdisciplinary teaching/learning are a
priority at the University of Saskatchewan. How do you see
this model assisting in the further progression of this priority
moving forward?
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Closing Comments
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