Appendix D
Financial Modeling Tools
TWU Summary Budgets
Revenue/Expense Examples Derived from Revenue-Estimating
Spreadsheet developed during the Visioning Process
44
TWU Budget
Fiscal Year 2013
BUDGETED
BUDGETED
REVENUE
EXPENSES
$
79,302,689 47% $
79,302,689
49,973,319 30%
48,274,719
29,179,355 17%
28,764,343
10,169,695
6%
4,374,000
$ 168,625,058 100% $ 160,715,751
BUDGETED
SURPLUS
$
1,698,600
415,012
5,795,695
$ 7,909,307
Plant Funds
Restricted Funds
State Grants & Contracts
Private Grants & Contracts
Scholarships
Federal Grants & Contracts
Loan Funds
Unrestricted Gift Funds
$
$
Total
$
Education & General
Designated Funds
Auxiliary Funds
Higher Education Fund
Total Operating Budget
36,064,912
$
1,111,791
6,667,694
18,478,834
5,055,242
242,000
494,219
236,739,749
$
36,064,912
-
1,111,791
6,667,694
18,478,834
5,055,242
65,000
494,219
177,000
-
228,653,442
$ 8,086,307
45
Detailed Budget
By Funding Source
Percentage
Of Operating
Budget
Category
Amount
27%
6%
13%
1%
E&G
E&G
E&G
E&G
$ 46,176,745
$ 10,904,887
$ 21,142,057
$ 1,079,000
$ 79,302,689
State Appropriations (Formula Funding)
Employee Benefit Appropriations
Statutory Tuition & Lab Fees
Other
Total E&G
17%
4%
7%
1%
Designated
Designated
Designated
Designated
$ 29,055,807
$ 7,140,477
$ 12,077,035
$ 1,700,000
$ 49,973,319
Designated Tuition Revenues
Program & Instructional Enhancement Fees
Incidental Fees (application, computer use, transcript)
Investment Income
Total Designated
4%
1%
2%
3%
3%
4%
Auxiliary
Auxiliary
Auxiliary
Auxiliary
Auxiliary
Auxiliary
$ 7,103,324
$ 1,968,123
$ 2,824,158
$ 5,483,024
$ 4,220,133
$ 7,580,593
$ 29,179,355
Student Services
Medical Service Fee
Fitness & Rec Fees Miscellaneous Income & Services
Food Services
Housing
Total Auxiliary
6%
HEF
$ 10,169,695
Higher Education Funds (Specific use ‐ capital)
100%
$ 168,625,058
Details
Total Operating Budget
46
TWU Revenue/Expense Examples
In the process of developing a Vision regarding the size and composition of the desired TWU
student body of 2018, there was much discussion of which programs generated financial
resources for the institution. The Committee heard comments such as:
Undergraduate programs at TWU keep the lights on – large numbers of students, large
class sizes, less costly faculty, larger teaching loads relative to graduate faculty, etc.
Graduate programs generate proportionately larger amounts of revenue due to formula
funding rates (up to 20X UG liberal arts), incrementally larger graduate tuition, etc.
Which statement is correct? Probably neither as stated.
What seems to increase the generation of net revenue (SCH tuition and academic fees less
direct academic expenses, such as faculty salaries, grad assistants, etc.) is a relatively large
number of credit hours per faculty resource committed. When expressed as a ratio (Academic
Revenue/Direct Academic Expense), larger ratios reflect a larger generation of revenue for each
dollar expensed. To increase the revenue (and increase the ratio), it is necessary to increase
the number of students and/or the rate of reimbursement received by TWU (formula funding,
graduate tuition, differential tuition, etc.). To increase the expense (and thereby reduce the
ratio), it is necessary to use more highly compensated instructors (Full Professor vs. Assistant
Professor) or apply policies that increase the number of faculty units associated with each SCH
(e.g., 1.X load credit for a lab, 1.X load credit for graduate courses, 1.X load credit for course
enrollment over XX students, 1 hour of load for each 2 thesis students, 1 hour of load for each
dissertation student, 1 hour of load for each 6 students in practicum, etc.).
The attached tables are based on the Nutrition and Food Sciences Department. In particular,
the formula funding rates for UG Lower, UG Upper, Masters, and PhD are used in all of the
calculations and actual enrollments in courses are associated with the examples.
For the large undergraduate programs (BS Nutrition, BS Nutrition in Business and Industry),
enrollments in UG Upper level lecture classes are typically either 40 or 80. The smaller
undergraduate program (BAS Culinary) has a typical enrollment around the minimum required
level of 12. At the graduate level, the MS programs in Nutrition had about 10 courses with
enrollments from 25 to 50 students in recent years. There are another 25 or so courses that
enroll from 6 to 12 students each. The PhD program has relatively few lecture courses and
those courses typically enroll 8 students each. In addition, some graduate students enroll in
practicum, research, and thesis or dissertation.
47
Using the above assumptions and the attached tables, the following are some revenue and/or
expense conclusions about the course offering in NFS:
• NFS generates strong net revenue ($40-80K) in the following courses:
o UG-LL with enrollment of 160
o UG-UL with enrollment of 80,
o Masters with enrollment of 30+
In each of the above situations, the revenue to expense ratios were between 4.0 and
5.5. These results provide resources to offset other NFS expenses and provide
significant resources to address the operating costs of the university.
• NFS generates either negative or tiny net revenue in the following course situations:
o UG-UL with enrollment of 12
o Masters with enrollment of 8
o All graduate practicum, research, and thesis
In each of the above scenarios, except PhD research, the revenue to expense ratio is 1.0
or slightly higher. Essentially, NFS contributes nothing to non-direct expenses of the
department and nothing to the rest of TWU.
• The remaining courses fall in between these examples of strong and weak net revenue
generation.
• To illustrate the relative efficiency of revenue and expense generated at different
enrollment and degree levels in NFS, consider the following:
o An UG-LL course with 160 students taught by a clinical associate professor and a
Master’s degree course with 40 students taught by a tenured full professor
generate comparable net revenue with identical Rev/Exp ratios (5.5).
o An UG-UL course with 12 students and a PhD dissertation or Masters practicum,
research, or thesis course generate comparable net revenue with nearly identical
Rev/Exp ratios (~1.0 – basically covers direct instructor expenses).
o A PhD course with 8 students, a Masters course with 17 students, and an UG-UL
with 48 students, and an UG-LL course with 65 students (all taught by a full
professor), each generate a comparable amount of net revenue with about a 3.0
revenue to expense ratio.
o These conclusions would vary for other disciplines based on the formula funding
multipliers (from 1.0 to ~20) and any student/faculty ratios required by specific
program accreditation (OT, PT, Nursing, Dental Hygiene, etc.) or discipline
standards (visual art studio, music, etc.)
48