 Institutional Support Expenditures
Total Operating Expense
divided by
 According to the Legislative Budget Board:
“provides an indicator of the proportion of
operating budget being spent on
administrative costs.”
2
 Institutional Support is a functional
category defined by NACUBO (National
Association College & University Business
Officers) used to allocate costs between
higher education activities.
3
Institutional Support includes:





Executive Management – President, VPs &
their staff including operations related to planning
& legal
Fiscal Operations – should not include bad debt
expense
General Administration– HR, Purchasing, etc.
Administrative Information Technology
Public Relations/Development
4




Instruction – costs directly related to instructional
mission (includes department chairs).
Academic Support – includes dean’s offices &
library, museums, academic computing &
advising.
Research– includes expenses for activities
specifically organized to produce research
whether internal or externally funded.
Public Service – non instructional activities to
external groups. Includes conferences, institutes,
consulting & general advisory services.
5

Student Services – costs that have the primary
purpose of contributing to students’ emotional and
physical well being and intellectual, cultural &
social development (outside the context of the
formal instructional program.) Includes admissions
& records, student IT, student health, counseling
& career guidance, financial aid administration.
Does not include intercollegiate athletics programs as those
must be identified as an Auxiliary Enterprise by Texas law.
6



Operation & Maintenance of Plant – includes
administrative costs, building maintenance,
custodial, utilities, landscape / grounds, repair &
renovation, security & safety (police, disaster
preparedness, environmental health & safety,
etc.), logistical services (central receiving,
stores) and facilities related IT.
Scholarships & Fellowships
Auxiliary Enterprises– self supporting entities
to furnish goods or services to students, faculty,
staff or incidentally to the general public;
includes all related administrative expenses.
7
Institutional Support Expenditures
Total Operating Expense
(FY09 Annual Financial Report)
$40,437,657
____________ = 11.24%
$363,087,491
UTSA 5 Year
Administrative Cost Trend
AFR 2005
AFR 2006
AFR 2007
AFR 2008
AFR 2009
28,925,000
32,996,000
30,657,000
31,505,000
40,816,000
256,385,000
277,752,000
298,937,000
328,230,000
363,087,000
11.3%
11.9%
10.3%
11.2%
11.2%
FY96 (10.4%) FY97 (11.6%) FY03 (11.2%) FY04 (11.7%)
9
Comparative
Administrative Cost Trends
AFR 2006
AFR 2007
AFR 2008
AFR 2009
11.9%
10.3%
11.2%
11.2%
UT Dallas
9.6
8.5
9.8
9.1
UTEP
8.6
7.5
7.7
7.5 (est)
UT Pan Am
8.2
9.7
9.6
10.9
UT Arlington
8.3
8.7
8.0
DNR
UT Tyler
15.4
13.2
12.7
DNR
UT Austin
6.1
5.7
5.1
DNR
UTSA
A small institution will usually have a higher institutional support percent of program expense
than a large comprehensive institution.
10
5 Yr Comparison by Program
UTSA
FY05 FY06 FY07
FY08
FY09
5 Yr
Chg
Instruction
34%
33%
33%
33%
30%
-4%
Research
7%
9%
8%
8%
10%
3%
Academic Support
7%
8%
9%
9%
10%
-1%
Public Service
6%
6%
5%
5%
5%
2%
Student Services
8%
8%
8%
9%
7%
-1%
Institutional Support
11%
12%
10%
10%
11%
0%
O&M of Plant
9%
10%
10%
12%
10%
1%
Scholarships
9%
7%
8%
8%
8%
-1%
Depreciation
8%
7%
8%
8%
9%
1%
11
 Higher education is under scrutiny for spending and
considered to be inefficient.
 Governor Perry has ordered a review of highereducation spending
 executive order calls for a comprehensive review of costefficiency in the state's public higher-education system. The
order lists a dozen areas to be considered, including faculty
workload, basing state spending on student course-completion
rates, and consolidating or eliminating academic programs.
 To demonstrate a goal of lowering administrative
costs is important when we are asking students to
increase tuition rates over the next 2 years.
12
UTSA’s LAR performance goal was 10%. We
exceeded that by 1.2%
What can we do to lower our ACR?
 Assure we are using the account that
correctly represents the functional
NACUBO program for ALL expenditures.
13
 Fill vacant faculty positions & improve the
ratio of T/TT to NTT
 Allocate administrative costs to Auxiliary
Enterprises
 Increase extramural funding – sponsored
programs & gifts
14
 Governor Perry’s Executive Order RP73 on
Higher Education Cost Efficiency
http://governor.state.tx.us/news/executiv
e-order/13573/
 Directs Coordinating Board to review
and offer recommendations for cost
efficiencies in higher education
16
 Included in the review:
 State funding based on student course
completion
 Restructuring financial aid to improve
efficiencies & to provide aid to students who
work hard to academically prepare for college
 Academic program consolidation & elimination
of programs that produce few graduates
17
 Included in the review, continued:
 Faculty Workload
 Articulation agreements between 2 and 4 yr
institutions
 Distance Learning
 Alternatives to creating new campuses
 Course redesign to improve quality & reduce
instructional costs for more courses
18
 Included in the review, continued:
 Cooperative, cross-system contracting &
purchasing
 Space utilization
 Energy use
 Cost of instructional materials
 Review of cost efficiencies in other states &
nations
19
 Executive Vice Chancellor Scott Kelley for Business
Affairs at UT System is the sole UT Representative:
http://www.utsystem.edu/BUS/vice_chancellor.htm
 Report to be submitted to Governor, Legislature &
institutions by November 1, 2010

Assumed to supplant HB4149 report:
http://www.legis.state.tx.us/tlodocs/81R/senateamend
/pdf/HB04149A.pdf
20




Continued scrutiny of tuition increases
Formula Advisory Committee work
Interim House & Senate committee studies
2010 Elections & Consequences
21
 State economic & budget condition
 Stimulus funds not available ($338M for Higher Ed)
For UTSA this means:
$3.53M
$1.87M
$4M
$0.5M
Formula Funding ($1.76M – 1 yr impact)
Higher Ed Incentive Funds
SALSI
P-16 Council
 Structural deficit continues to grow ($12-15B)
 Sales Tax Receipts down double digits (-12.8%
Sept 09 as compared to Sept 08)
22
 Rainy Day fund

May have $5B against the projected $12-15B deficit?
 Repeat of 2003 or worse?
 Some discussion about a mid biennium budget
cut
 Expenditure reductions of 10%?
 Impacts to Budget Planning
23
 Higher Education Funding Needs
 Maintain formula funding (backed with ARRA money
in the prior biennium)
 TRBs or some form of capital construction
support
 Funding for UT Austin
 Continuation of National Research University
Initiative
24
The Chancellor, under the direction of the
Board of Regents, is encouraging each
President to redirect resources towards:
 High priority mission activities
 Strategic competitive investments; and
 Reserves in preparation for potential future
financial shortfalls
26
1. Consider Scope and Mission – less effective
activities may need to be reduced or eliminated
2. Understand the Rationale – reasons should be
soundly developed and communicated widely
3. Transparency – decisions and actions must be
clear and communicated widely
4. Examine the entire budget rather than
budgeting at the margin
27
5. Focus – separate the budget not available for
redistribution; while resources from other areas
of the budget may not be redistributed, any
subsidies to those activities should be identified
and discussed.
6. Prioritization
28
7. Revenue – new revenue opportunities are less
predictable (and won’t necessarily result in
additional discretionary income)
8. Tracking & Measurement
9. External Benchmarks
10. Flexibility
11. Decision Level
29
12. Real v. Theoretical Reallocations – make
identification of reallocation strategies reality
versus an exercise.
13. Administrative & Academic Overhead –
thorough review of non-mission specific
activities & expenditures. Targeted reduction
in admin OH which do not impede critical
mission activities should be identified &
communicated.
30
14. Efficiency & Productivity
15. Reallocation Targets – customized to each unit
and not across the board; unit should
understand the need and amount required;
unit should benefit in some way from the
reallocation.
16. Multi-year Plan
31