University of California, Berkeley
DRAFT- near final
Berkeley
Financial Overview
Erin S. Gore
Associate Vice Chancellor
Budget and Resource Planning
esgore@berkeley.edu
Source: http://controller.berkeley.edu/FINRPTS, unless otherwise noted
Berkeley's total revenue -- $1.8 billion
in 2008-09 (FY 2009)-- came from 8 major sources
28%
20%
19%
18%
8%
4%
2%
1%
State Government,
$507.6m
Tuition and Fees , $362.1m
Federal Government ,
$347.6m
Private Gifts, Grants,
Contracts , $317.5m
Sales and Services of
Auxiliary Enterprises,
$149.m
Sales and Services of
Educational Activities,
$75.1m
Other Sources, $39.2m
Local Government ,
$10.9m
2
$123 million = painful choices
$ 209m
$92m
$92m
$31m
$ 148 m
$24m
$ 123m
$ 7m
$67m
$31m
$17m
$1m
The state budget cut on A one-time federal Unfunded expenditures, The initial shortfall after Student fee increases The total deficit after
We increased
stimulus offset the full
July 1st 2009
including utilities,
federal stimulus and were approved in July revenue enhancements
administrative full
impact of cut by $92m
was then $123m
benefits, network
unfunded expenditures
and reduced the
costing rate from 4% to
funding model, and
was $148m
shortfall by $24m
7% on external revenue
previously-negotiated
to reduce the deficit by
salary increases added
$7m
to the initial shortfall by
$31m
Activities external to UC Berkeley’s actions that resulted in a $123m deficit in July 2009
We made permanent
The system-wide
budget reductions
furlough program
averaging 19.3% on a reduced the deficit by
$31m
base that excluded
faculty salaries, libraries
and purchased utilities
Other temporary
reductions, including
budget cuts to carryforward balances
reduced the deficit
further by $17m
The remaining shortfall
is about $1m
Choices we made at UC Berkeley to meet the $123 million shortfall
3
The deficit had to be plugged with unrestricted
revenue -- a dramatically shrinking resource
$2,000m
Berkeley’s Current Funds Revenues ($ in millions)
Funds that are not subject to externally imposed restrictions on their use must be classified as
unrestricted for financial reporting purposes, however “unrestricted” does not mean that the funds
are uncommitted.
$1.7b
$1,800m
$1,600m
$1.5b
$1.5b
$1.6b
$1.4b
$1,400m
$1.3b
$1,200m
$1,000m
$572.m
44%
$800m
$600m
$379.9m
29%
$550.m
39%
$360.m
27%
$483.3m
32%
$500.7m
31%
$483.5m
27%
$652.2m
36%
$588.8m
34%
$577.2m
36%
$596.8m
35%
$621.m
35%
$673.3m
37%
2005-06
2006-07
2007-08
2008-09
$448.1m
30%
$520.8m
33%
$484.3m
34%
$552.5m
37%
$569.6m
37%
2002-03
2003-04
2004-05
$382.6mz
27%
$536.5m
31%
$572.3m
32%
$1.8b
$595.6m
33%
$481.2m
31%
$400m
$200m
$506.8m
34%
$1.8b
Total
Revenue of
$1.8b is
grouped into
three broad
categories
$0m
2001-02
Restricted Use
Unrestricted Designated Use
Unrestricted General Use
4
Unrestricted revenue: a closer look
Current Funds Revenues
Schedule 1-A
($ thousands)
Unrestricted
General Use
Unrestricted
Designated
Use
Restricted
Use
Total
Tuition and Fees
Regular Session
Summer Session
University extension & continuing education
Contra Bad Debts
Scholarship allowance
72,821
(384)
72,437
357,805
23,828
30,509
(1,425)
(121,055)
289,662
-
60,774
3,399
64,173
2,087
258,936
22,409
283,432
2,087
319,710
25,808
347,605
2,814
2,814
32,700
61,070
93,770
443,649
63,884
507,533
-
-
430,626
23,828
30,509
(1,809)
(121,055)
362,099
Federal Government
Appropriation
Grants
Contracts
Contra Bad Debts
State Government
Appropriation
Contracts
Contra Bad Debts
410,949
410,949
Local Government
-
756
10,186
10,942
Private Gifts, Grants, Contracts
-
31,589
285,876
317,465
Sales & Services of Educational Activities
61
75,000
-
75,061
31,828
8,251
110,609
2,921
27,302
(446)
(31,430)
149,035
-
31,828
8,251
110,609
2,921
27,302
(446)
(31,430)
149,035
40
4,643
34,296
205
39,144
-
4,643
34,336
205
39,184
483,487
652,173
Sales and Services of Auxiliary Enterprises
Intercollegiate athletics
Parking operations
Residence and dining halls
Student Union and bookstore
Other
Contra Bad Debts
Scholarship allowance
-
Other Sources
http://controller.berkeley.edu/FINRPTS
Service Enterprises
Other
Contra Bad Debts
Scholarship allowance
Total
40
673,264
1,808,924
5
Drilling down: State educational funding is now
just 22% of total revenue, and falling
28%
20%
8%
4%
2%
1%
Tuition and Fees , $362.1m
$507.6m State Government 28%, 2008-09
Federal Government ,
$347.6m
19%
18%
State Government,
$507.6m
Private Gifts, Grants,
Contracts , $317.5m
Sales and Services of
Auxiliary Enterprises,
$149.m
Sales and Services of
Educational Activities,
$75.1m
State
Educational
Appropriation
$390.1 m,
<22% of total
revenues
Indirect Cost
Recovery return,
$20.8m,1.2%
Other Sources, $39.2m
State Contracts,
$63.9m, 3.5%
Local Government ,
$10.9m
State Restricted
Appropriation,
$32.7m, 1.8%
State Educational appropriations excluding ICR
2000-01 to 2009-10 (projected)
$497m
$475m
$429m
$399m
$416m
$454m
$484m
$390m
$304m
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
projected
State educational appropriations excluding
Indirect Cost Recovery (ICR) decreased by $93m
between 2007-08 and 2008-09 due to budget
reductions. From this lower base, we are taking a
$86m budget cut (a permanent cut of $67m, a
temporary cut of $17m and unallocated cut of $1)
this year.
6
Tuition and fees makes up the largest portion of
the Unrestricted Designated Use source
Berkeley’s Current Funds Revenues, 2008-09 ($ in thousands)
Unrestricted
Schedule 1-A
Unrestricted
($ in thousands)
General Use
Designated Restricted
Use
Use
Total
Tuition and Fees
Regular Session
Summer Session
University extension & continuing education
Contra Bad Debts
72,821
357,805
-
430,626
-
23,828
30,509
-
23,828
30,509
(1,425)
-
(1,809)
(121,055)
289,662
-
(121,055)
362,099
(384)
Scholarship allowance
72,437
Federal Government
Appropriation
Grants
Contracts
Contra Bad Debts
-
60,774
3,399
64,173
2,087
258,936
22,409
283,432
2,087
319,710
25,808
347,605
2,814
2,814
32,700
61,070
93,770
443,649
63,884
507,533
Tuition and Fees, $362.1m
This is the largest portion (44%) of the
Unrestricted Designated Use revenue. Outof-state tuition and fees ($73m) is reported
as Unrestricted General Use. Revenues from
University Extension classes to the public
and degree-granting programs required to
be self-sustaining are also included as
Unrestricted.
Tuition and Fees Revenue
This category has grown 106% ( $247m to $509m) from 2001-02 to
2009-10, however, Berkeley’s return to aid in the form of scholarships
results in a smaller increase of 80% ($201m to $388m) in the same time
period. In 2001-02 inflation-adjusted dollars, the increase is 37% ($201m
to $296m), indicated by the line and bold type.
$443m
$386m
$483m
$407m
Tuition and fees
$354m
$317m
$247m
$256m
$227m
$243m
$246m
$509m
$253m
$258m
$276m
$296m
$193m
Tuition and fees,
inflation-adjusted
and net of
scholarships
Tuition and fees, net of scholarships
$201m
$203m
$247m
$275m
$292m
$310m
$331m
$362m
$388m
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
projected
State Government
Appropriation
Contracts
Contra Bad Debts
410,949
410,949
Local Government
-
756
10,186
10,942
Private Gifts, Grants, Contracts
-
31,589
285,876
317,465
Sales & Services of Educational Activities
61
75,000
-
75,061
31,828
8,251
110,609
2,921
27,302
(446)
(31,430)
149,035
-
31,828
8,251
110,609
2,921
27,302
(446)
(31,430)
149,035
Sales and Services of Auxiliary Enterprises
Intercollegiate athletics
Parking operations
Residence and dining halls
Student Union and bookstore
Other
Contra Bad Debts
Scholarship allowance
-
Other Sources
Service Enterprises
Other
Contra Bad Debts
Scholarship allowance
Total
-
4,643
4,643
40
34,296
205
-
-
34,336
205
-
40
39,144
-
39,184
483,487
652,173
-
673,264
1,808,924
Source: Current Funds Revenues 2008-09 Schedule 1-A at http://controller.berkeley.edu/FINRPTS/2008-09/BK09SchA.pdf
7
Declining state support has led to rising student
fees over the past decade...
Resident and Non-Resident Student Fees have increased by
151% and 117% respectively since 2001-02. The per student fee
is shown in nominal dollars and includes registration,
education, campus, class pass and health insurance fees.
$23,686
$25,254
$33,051
$26,484
$28,005
$29,540
$25,162
Non-Resident Fees:
nominal and
inflation-adjusted
$20,068
$15,197
$4,123
2001-02
$16,715
$4,336
2002-03
$5,858
2003-04
$6,730
2004-05
$7,434
2005-06
$7,800
$8,385
$8,932
$10,334
$7,867 Resident Fees:
nominal and
inflation-adjusted
2006-07
2007-08
2008-09
2009-10
$483m
$509m
$443m
$386m
$407m
Tuition and fees
$354m
$317m
$247m
$256m
$193m
$227m
$243m
$246m
$253m
$258m
$276m
$296m
Tuition and fees,
inflation-adjusted
and net of
scholarships
Tuition and fees, net of scholarships
$201m
$203m
$247m
$275m
$292m
$310m
$331m
$362m
$388m
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
projected
Sources: Undergraduate Student Fees from UC Berkeley Registrar, For inflation, Higher Education Price Index (HEPI)
8
... yet despite higher fees, reduced state funding
leaves us less to spend on our students
State
Education
Funds,
excluding ICR ,
$15,165
71%
$21,287
Tuition and
Fees, net of
scholarships,
$6,122
29%
$22,872
$22,092
$20,183
$19,209
$20,000
$20,146
$20,884
$20,628
State educational appropriations and tuition and fees per student FTE, nominal and inflation-adjusted
$18,360
$17,797
$17,551
$18,054
State
Education
Funds,
excluding
ICR, $6,263
44%
Tuition and
Fees, net of
scholarships,
$7,987
$18,717
56%
$17,808
$15,704
$14,249 - 33%
In 2001-02, the total of State funds and Tuition and Fees per
student FTE was $21,267 with 71% being paid by the state.
By 2009-10, the inflation-adjusted total
support declined by 33% to $14,249 per
student FTE. At the same time, the portion
paid by students for their education has
increased to 56%.
Student
FTE 32,781
33,591
33,804
33,462
33,922
34,576
35,654
36,464
37,006
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
projected
+ 13%
State educational appropriations exclude Indirect Cost Recovery (ICR) returned as Unrestricted General funds. Tuition and Fees is net of scholarships. Inflation-adjustment is to
2001-02 dollars using the Higher Education Price Index (HEPI). Sources: Berkeley Overhead Allocations, 2000-01 – 2008-09 prepared by Budget Resource and Planning,
9
Student FTE from UC Berkeley Registrar
Grants and Gifts are a large source of revenue,
yet not available for other uses
Berkeley’s Current Funds Revenues, 2008-09 ($ in thousands)
Unrestricted
Federal Government Revenue, $347.6m
This is the largest source of restricted revenue on
campus, and the largest contributor to Berkeley’s
research mission through grants and contract
awards. A portion ($64m) reimburses the campus
for use of facilities and the administration of the
grants that support research. This reimbursement
comes to Berkeley as Unrestricted funds.
Schedule 1-A
Unrestricted
($ in thousands)
General Use
Designated Restricted
Use
Use
Total
Tuition and Fees
Regular Session
Summer Session
University extension & continuing education
Contra Bad Debts
Scholarship allowance
72,821
357,805
-
430,626
-
23,828
30,509
-
23,828
30,509
(384)
72,437
(1,425)
-
(1,809)
(121,055)
-
(121,055)
289,662
-
362,099
Federal Government
Grant and Contract Revenue
$597m
$457m
$422m
$56m
$54m
$83m
$95m
$284m
$306m
2001-02
2002-03
$484m
$496m
$495m
$498m
$57m
$55m
$57m
$60m
$90m
$95m
$104m
$109m
$337m
$346m
2003-04
2004-05
Federal
$529m
$64m
$61m
$185m
$139m
$334m
$329m
$329m
$348m
2005-06
2006-07
2007-08
2008-09
Private & Local
-
Grants
Contracts
Contra Bad Debts
-
2,087
2,087
60,774
3,399
64,173
-
258,936
22,409
283,432
319,710
25,808
347,605
2,814
2,814
32,700
61,070
93,770
443,649
63,884
507,533
State Government
Appropriation
Contracts
Contra Bad Debts
410,949
410,949
Local Government
-
756
10,186
10,942
Private Gifts, Grants, Contracts
-
31,589
285,876
317,465
State*
*State contracts include state agency contracts only. They
exclude special state appropriations for student financial aid
($8.4m), lottery ($3.6m), other state/special funds ($1.3m) which
make up the total grant and contract operating revenues in the
report, Statements of Revenues, Expenses and Changes in Net
Assets, but are a portion of the source of Unrestricted General
appropriation in this report.
Sales & Services of Educational Activities
61
Y
Federal, Private & Local and State* sources
Appropriation
75,000
-
75,061
-
31,828
8,251
110,609
2,921
27,302
(446)
(31,430)
149,035
-
31,828
8,251
110,609
2,921
27,302
(446)
(31,430)
149,035
40
4,643
34,296
205
39,144
-
4,643
34,336
205
39,184
483,487
652,173
Sales and Services of Auxiliary Enterprises
Intercollegiate athletics
Parking operations
Residence and dining halls
Student Union and bookstore
Other
Contra Bad Debts
Scholarship allowance
Other Sources
Service Enterprises
Other
Contra Bad Debts
Scholarship allowance
Total
40
673,264
1,808,924
Private Gifts, Grants, Contracts, $317,465
similar to the Federal and Local Government, most revenue is
restricted by donors, individuals and institutions for specific
uses.
$236m
$212m
$165m
$104m
$317m
$284m
$252m
$218m
$133m
$101m
$174m
$104m
$89m
$92m
$124m
$125m
$135m
$148m
$150m
$143m
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
$93m
$82m
$72m
$22m
2001-02
2002-03
Private Gifts
Private Grants and Contracts
10
Berkeley's grants and contract growth is good
news... but not that good
$628m
$597m
$529m
$484m
$496m
$495m
$498m
$57m
$55m
$57m
$60m
$90m
$95m
$104m
$109m
$337m
$346m
$334m
$329m
$329m
$348m
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
$457m
$422m
$367m
$34m
$56m
$54m
$83m
$95m
$64m
$64m
$61m
$185m
$185m
$139m
$76m
$258m
2000-01
$284m
$306m
2001-02
2002-03
Federal
Private & Local
Our current federal Indirect
Cost Recovery rate is 53.5%. It
is intended as a reimbursement
for the costs of conducting
research activity at Berkeley.
The cost components are:
Facilities (Building
depreciation, Building interest,
Equipment depreciation,
Operations & Maintenance,
Utilities allowance, Libraries)
and, Administration (General
administration, Departmental
Administration, Sponsored
projects administration and
student services).
$379m
2009-10
projected
State*
Source: Statements of Revenues, Expenses and Changes in Net Assets include Indirect Cost Recovery by source; however, State Grants and Contracts is adjusted to
match Schedule 1A and excludes $8.4m Student Financial Aid, $3.6m Lottery Funds and $1.3 Other State/Special funds. Cost for Facilities and Administrative
Expenses are 66.8% based on Berkeley’s most recent cost study (2004-05), from which our current rate was negotiated with the federal cognizant agency.
11
An example of one segment of Berkeley’s
complex and decentralized organizational
structure
Source: http://www.berkeley.edu/admin/pdf/research.pdf
12
Waste? Probably, but where?
Expenditures, 2008-09
Scholarships and
fellowships $77.3m
4%
Utilities $42.5m
2%
Berkeley’s operating expenses are reported in our
financial statements as a total of all expenditures,
regardless of the source of revenue that funded it. In
2001-02, it totaled $1.35b. By 2008-09 this had grown
an average of 5% per year to $1.88b. In constant,
inflation-adjusted dollars, the average growth was .8%
Supplies and
materials
$139m
7%
Salaries and
benefits
$1,193.4m
63%
The Higher Education Price Index (HEPI) is an inflation
index designed specifically for use by institutions of
higher education. Compiled from data reported by
government agencies and industry sources, HEPI
measures the average relative level in the price of a
fixed market basket of goods and service purchased by
colleges and universities each year through current fund
educational and general expenditures, excluding
research.1
Depreciation and
amortization
$145m
8%
Other expenses
$293m
Other expenses include travel,
16%
rent, insurance, legal
settlements, repairs and
maintenance, plus gains or
losses on disposals of capital
assets.
Berkeley’s expenditure growth compared to inflation from 2001-02 through 2008-09
Expenditure category
Salaries ($m)
Benefits ($m)
Scholarships and fellowships ($m)
Utilities ($m)
Supplies and materials ($m)
Depreciation and amortization ($m)
Other expenses ($m)
Total Operating Expenses ($b)
Inflation-adjusted 2001-02 dollars (HEPI) ($b)
Price Indexes
Higher Education Price Index (HEPI)
Consumer Price Index (CPI) All Items
2001-02
742.6
134.1
57.4
25.8
94.6
101.1
192.7
1.348
1.348
2002-03
763.9
147.5
69.3
29.8
74.8
113.0
217.7
1.416
1.348
2003-04
771.4
157.6
68.1
35.8
104.1
117.7
210.2
1.465
1.345
2004-05
771.5
171.9
77.4
38.2
113.7
120.9
243.6
1.537
1.358
2005-06
807.9
189.1
65.6
37.3
114.3
123.2
251.5
1.589
1.335
2006-07
858.1
180.2
76.8
34.2
123.3
130.9
282.1
1.686
1.377
2007-08
932.2
204.2
75.7
35.9
133.5
132.4
296.4
1.810
1.410
2008-09
973.0
220.5
77.3
42.4
139.0
144.2
292.1
1.888
1.438
total
growth
31%
64%
35%
65%
47%
43%
52%
40%
7%
1.0000
1.0000
1.0508
1.0220
1.0893
1.0443
1.1321
1.0758
1.1899
1.1167
1.2238
1.1456
1.2844
1.1880
1.3136
1.2047
31%
20%
Source: 1Commundfund Institute, 2009 HEPI Update, p.1, at http://www.commonfund.org/Commonfund/CF+Institute/CI_About_HEPI.htm
Statements of Revenues, Expenses and Changes in Net Assets at http://controller.berkeley.edu/FINRPTS/
average
annual
growth
3.9%
8.0%
4.3%
8.1%
5.9%
5.3%
6.4%
5.0%
0.8%
3.9%
2.6%
13
Berkeley's salaries go mainly to instruction and
research
Total Salaries by Activity for 2008-09 were $973m.*
Faculty Salaries and Instruction
Research
Cultural and Public Educational Services
Main Library
Administration within Academic Units
Academic Support
Central Ops
Student Services
Academic Achievement Programs
Research
Student Services
Instruction
Campus Administration
Administration within Academic Units
Capital Projects and Facilities
IT
Intercollegiate Athletics
Cultural and Public Educational Services
Main Library
External Relations
Academic Achievement Programs
Academic Support
Central Ops
Equity & Inclusion
Academic Salaries, from all sources total $462m
263
163
11
9
9
All Salaries by Activity
3
2
1
1
Staff Salaries, from all sources total $518m
90
82
68
53
44
35
34
24
23
20
19
12
8
5
2
Faculty Salaries and Instruction
Research
Student Services
Administration within Academic Units
Campus Administration
Capital Projects and Facilities
Cultural & Public Educational Services
IT
Main Library
Intercollegiate Athletics
External Relations
Academic Achievement Programs
Academic Support
Central Ops
Equity & Inclusion
Vacation accrual adjustment
Total
$m
331
253
83
53
53
35
34
34
29
24
19
13
11
7
2
(7)
973
%
34.0%
26.0%
8.5%
5.4%
5.4%
3.6%
3.5%
3.5%
3.0%
2.5%
2.0%
1.3%
1.1%
0.7%
0.2%
-0.7%
100%
*Source: Expenditures by activity-based categories excludes benefits of $220.5 million, is from BAIRS.
Campus Administration includes the Chancellor’s Office, EVCP Office, VC-Administration Office, Audit, Budget and Resource Planning, Business
Service (Parking & Transportation, Document Services, COrWE), Financial Services (Accounting, Payroll, Disbursements), Human Resources, Safety &
Security (EH&S, Police)
14
Expense by Activity ($ in millions)
Expense by Unit ($ in millions)
Discovery and Research
Executive Vice Chancellor and Provost
$637
495
Chancellor's Office
Financial Aid
229
Vice Chancellor - Administration
Student Life and Services
174
Teaching and Learning
Administration
71
Facilities
70
Cultural and Educational Services
68
Library
60
Accounting adjustments and accruals
Athletics (excluding financial aid)
53
Total expenditures
Information Technology
47
Development and Alumni and Public A
34
Academic Achievement
19
Academic Support
14
Total expenditures
3
-242
$1,816
18
Vice Chancellor - Facilities Services
85
Equity and Inclusion
12
187
Vice Chancellor - Equity and Inclusion
Academic Leadership
Accounting adjustments and accruals
$1,194
67
Vice Chancellor - Research
269
Vice Chancellor - Student Affairs
238
Vice Chancellor - University Relations
34
Assoc Vice Chan Information Technology and Chief Information Officer
41
-242
$1,816
Expense by Type ($ in millions)
Faculty salaries
Temporary academic salaries
Other academic salary
Academic benefits
$173
75
213
83
Staff salaries
517
Staff benefits
146
Other operating expense
852
Accounting adjustments and accruals
-242
Total expenditures
$1,816
Source, and for more discussion on expenditures, see Budget Central
http://newscenter.berkeley.edu/news/budget/primer/expenses.shtml