University Budget and Finances
A guide for TUFA members
University finances oversight
committee, 2010
Remit:
• To provide accurate information to the TUFA membership and Executive on
University finances.
• To document the budget structure and decision-making procedures within the
University.
• To identify and highlight issues that affect the membership in relation to University
finances.
• To provide support to the membership and Executive through these activities, in
preparation for collective bargaining and responses to specific financial issues that
affect working conditions.
• To employ financial specialists on an ad hoc basis to fulfill the remit.
To this end, we have identified questions for the administration on the budget (UFOC
1), received a response (UFOC 2) and provided an assessment of that response
(UFOC 3)
Budget decision making
• The Trent University Administration is
responsible for deciding what, how, and when
budget information is presented. It is
important to recognize that the
ADMINISTRATION is not a neutral provider of
budget information. Their own agenda will
influence their preparation, approval and
presentation of budgets.
Budget decision making
• Who decides the budget?
• Senior management decide the budget and
send it to the Board of Governors for approval
• Currently, it seems that the Provost’s Planning
Group is responsible:
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Acting Provost and Vice President Academic (chair)
VP Admin
VP Research
VP External Relations
Acting Dean
Dean of Grad Studies
University Librarian
Director of Public Affairs
Budget decision making
• It is not clear how often the budget planning is done, who
scrutinizes it at what stages (although perhaps Academic
Planning committee does this) and whether the Board of
Governors (the ultimate authority), scrutinizes it in relation to
the University’s mission.
• Eg, see UFOC 2 – 2.1 - There is an acknowledgement that the current
budget making processes do not operate in integration with the
University’s stated mission. The future procedures they discuss are
presumably the current Integrated Planning process run out of the
President’s Office. Update letter no. 5 on Integrated Planning (President’s
website) promises planning cycles that integrate budgets to overall
strategic goals – something which is missing right now (remember that we
had a financial crisis in 2008 that was apparently going to resolve issues).
There is also a promise for clear and transparent information – something
which is again absent right now.
Budget decision making
• What is the mechanism for getting budget
information from ADMINISTRATION?
• Nothing clearly stated in terms of the
processes described above:
• Transparency is therefore a serious issue, as is
clarity of the information presented
• These are promised in the current proposal for
Integrated Planning (see update letter 5 on
President’s website).
Budget presentation
• In Ontario, there are no accounting policies or
principles that govern how budget information is
presented to stakeholders. Within the budgeting
context, the ADMINISTRATION will choose among
different acceptable ways to present budgets i.e.
loose, tight, etc. depending on their motive. This
flexibility allows significant room for interpretation
and discussion around what is fair presentation of
accounting information (including substantial
estimates) at Trent University. In essence, budgeting
is more of an art than a science.
Budget presentation
• Padding happens when operational revenues are
underestimated and operational expenses are
overestimated. This "padding" is done so if revenues
come in higher than the budgeted number, the
ADMINISTRATION will look especially productive. The
difference between the padded amount and the
realistic amount is called budgetary slack.
• Current budget is padded (see UFOC 1- 1.1) and
administration’s response was vague, justifying their
estimates but without any indication of how extra
revenues that might appear would be allocated (see
UFOC 3 – section 1)
Budget presentation
• A balanced budget is the requirement from
the Board of Governors (UFOC 2)
• We are pursuing whether running a deficit is
possible given the generation of future
income – from hydro generation, new
residences and possibility of staff renewal
through VER (see UFOC 3 – section 3)
• Again, there seems no strategic planning from
the administration on these issues.
Budget definitions
• The operating budget is the account of
revenues and expenses and is therefore the
relevant issue for discussion.
• Remember, that it remains a future estimate
when presented each year.
• 97% of Trent salaries are sourced from the
operating budget (see recent OCUFA report)
• Revenue for operating budget is federal,
provincial grants and tuition (72% 08-09
average in ON in OCUFA report)
Initial 2010-11 “Budget”
Presented at Joint Committee: 2010-01-21
Updated version
• The publication by the Provost’s Planning
Group proposes a 2.6m shortfall – and lists
costs of 2.2m for pension contributions, 0.4
for fringe benefit inflation, 0.9m for increased
operating costs of buildings and scholarships
and some new staff costs. Increased revenue
is estimated at 2.4m from enrolment. One
time funding is included but we are told they
do not expect it this year.
Revenues and expenses
• We have asked for clarity in TUFA salaries as a
proportion of overall salaries (which the
Admin consistently tells us is 84% of operating
expenses – see UFOC 3).
• We are pursuing whether the operating
budget has been used to pay off other
expenses (such as building costs – see UFOC 3)
Revenues and Expenses
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Trent University Statement of Operations and DeficitYear Ended April 30, 2009
REVENUE
2009
2008
Government grants
60,092
59,694
Tuition fees
38,454
37,614
Ancillary sales and services 18,527
19,027
Donations and grants
3,529
2,425
Investment income
1,763
1,961
Miscellaneous
2,666
2,533
Totals
125,031 123,254
EXPENSE
Salaries and benefits
88,406
85,266
Scholarships and bursaries 7,762
8,083
Utilities
2,671
2,850
Supplies
22,713
22,633
Interest amortizations
1,365
1,406
Library acquisitions
658
723
Other capital assets
7,734
7,631
Change in fair value of financial (53)
728
Totals
131,256 129,320
Revenues and Expenses
• EXCESS OF EXPENSE OVER REVENUE FOR THE YEAR
(6,225)
(6,066)
• Change in internally restricted
2,254
4,170
net assets
• Change in investment in
488
865
Capital assets
• INCREASE IN DEFICIT
FOR THE YEAR
(3,483)
(1,031)
• DEFICIT – beginning of year
(9,933)
(8,902)
• DEFICIT – end of year
$ (13,416) $ (9,933)
Salaries and benefits
• Once we have some requested information,
we will add to this slide, but this is from
Trent’s latest report card
• Academic/instructional
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2004-05 52.54%
2005-06 53.31%
2006-07 52.99%
2007-08 54.81%
2010-11 53.00%
Support Library Student services Total
7.90%
7.59%
7.64%
8.28%
8.00%
4.65%
4.65%
4.41%
4.34%
5.00%
14.40%
13.13%
12.75%
12.25%
13.00%
79.5%
78.7%
77.8%
79.7%
79.0%
Key issues
• Transparency of process and accountability
• Transparency of instructional budget versus
other expenses in operating budget
• Integration of University mission and strategic
goals to budgeting procedures
• Recognition of the importance of instructional
staff and research to University delivery of its
mission and its reputation
• Long term planning on key financial cost
issues affecting TUFA