University of Missouri
February, 2013
Natalie “Nikki” Krawitz
Vice President for Finance and Administration
1
University of Missouri System
Office of the Vice President for Finance & Administration
Board of Curators
President
Timothy M. Wolfe
Secretary to the Vice President
Memoree Bradley
Controller
Jane Closterman
Accounting
Financial Information Systems
Financial Reporting
Sponsored Programs
Payroll
Tax Reporting
Vice President
Natalie “Nikki” Krawitz
Assistant Vice President
for Budget Planning &
Development
Cuba Plain
Assistant Vice President
Management Services
Dave Sheahen
Facilities Planning & Dev.
Risk & Insurance Mgmt.
Business Services
Records Management
Minority Business Dev.
Budget Planning, Development,
& Monitoring
Appropriations Request
Institutional Research &
Planning
Treasurer
Tom Richards
Cash Management
Debt Management
Banking
Retirement &
Endowment Fund Management
Chief Procurement Officer
&
Director, Sourcing and
Supply Chain (UMHC)
Tony Hall
Director of Financial Services
Nilufer Joseph
Internal Audit
Compliance
Scholarships (Tuition Settlement, MOST)
Financial Analysis
System-wide Procurement
2
State Budget Update
3
State of Missouri
FY2013 Total Operating Budget - $24b
Sources of Funds
General Revenue,
$8,013m 33%
Other, $8,112m
34%
Federal, $7,905,
33%
4
State of Missouri
FY2013 General Revenue Total $8.014m
Human Services
$2,372m, 39.6%
Corrections &
Public Safety
$665m, 8.3%
All Other $919m,
11.5%
Judiciary &
Elected Officials,
Gen Assembly
$290m, 4%
Higher Ed
$790m, 10.6%
5
Elementary &
Secondary Ed
$2,917m, 36.4%
Higher Education: A Shrinking State Priority
17%
16%
Percent
15%
14%
13%
12%
11%
10%
Percent Total General Revenue
6
State support for higher education in Missouri
is significantly lower than comparator states
FY2012 State Appropriations for Higher Ed per $1,000 in Personal Income
12.00
10.00
$9.17
$8.49
$8.42
8.00
$6.31
6.00
$6.03
$6.70
$6.35
$6.08
$5.63
$4.04
4.00
2.00
0.00
7
Missouri ‘s support for higher education on a
per capita basis is less than comparator states
FY2012 State Appropriations for Higher Ed per Capita
$400
$350
$300
$250
$352.99
$307.55 $278.65
$282.75
$241.34
$257.59
$249.31 $220.98 $233.28
$200
$154.74
$150
$100
$50
$0
8
To match the national average, Missouri would
need to increase funding for H.E. by $472 million
FY2012
Missouri ranked
44
Missouri per capita = $154.74
National average = $233.28
Funding gap
= $ 78.54
Total Funding Gap = $ 472 m
9
There has been a shift in Funding for the
University over the last 20 years
Revenue Contribution
Operations Fund
Revenue Contribution
All Funds
100%
100%
90%
$543.4
$309.0
20%
29%
80%
90%
80%
70%
70%
60%
$312.0
50%
29%
40%
$134.2
$1,226.7
60%
46%
50%
40%
13%
30%
30%
$508.4
$310.8
20%
29%
10%
0%
1993 Actuals
19%
20%
$397.7
10%
15%
0%
9%
$44.7
15%
$143.5
31%
$552.9
50%
$280.6
60%
$384.0
35%
1993 Actuals
2013 Budget
Other
State Appropriations
Sales & Services & Patient Revenues
Net Tuition & Fees
State Appropriations
10
$168.4
2013 Budget
Net Tuition & Fees
Other
State support is 10.4% below 2001; over the
same time period the CPI has increased 26.7%
Gross
Approp.
Change in
Percent
Year
Approp.
Received
Receipts
Change
FY01
$442.0
$428.8
FY02
$457.1
$376.9
($51.8)
-12.1%
FY03
$411.1
$385.0
$8.1
2.1%
FY04
$388.7
$377.1
($7.9)
-2.1%
FY05
$400.8
$388.8
$11.7
3.1%
FY06
$401.8
$389.8
$1.0
0.2%
FY07
$413.0
$401.8
$12.0
3.1%
FY08
$430.9
$419.1
$17.3
4.3%
FY09
$451.5
$437.9
$18.8
4.5%
FY10
$451.5
$437.9
$0.0
0.0%
FY11
$428.0
$415.1
($22.8)
-5.2%
FY12
$405.6
$383.6
($31.5)
-7.6% *
FY13
$400.0
$384.0 E
$0.4 E
0.1% E
Cumulative Change FY01-FY12
($44.7)
-10.4%
Dollars in Millions
CPI %
June
1.1%
2.1%
3.3%
2.5%
4.3%
2.7%
5.0%
-1.4%
1.1%
3.5%
1.7%
0.9% E
26.7%
*-8.1% excluding $2.0 M special increase for School of Pharmacy
11
34% enrollment growth since FY 2001
Headcount Enrollment
80,000
Enrollment Growth Fall 2000 – Fall 2012
75,000
70,000
34% Growth
65,000
60,000
55,000
50,000
12
State Appropriations /FTE Student
State Appropriations per FTE Student have
declined 35% since 2001
$11,000 $10,462
$10,000
36.5%
decline
$9,000
$8,000
$7,000
$6,643
$6,000
Note: Includes appropriations for Cooperative Extension and Ag Experiment Station
13
*estimate
UM’s resident UG tuition and fees is below the
average for public doctoral institutions.
Average Public Doctoral In-State Undergraduate Tuition and Fees Compared to UM
Campuses, FY2012-13
Tuition and Required Fees
2012-13
2011-12
$
Change
Public Doctoral - National Average
$9,539
$9,126
$413
4.5%
MU
$9,257
$8,989
$268
3.0%
UMKC
$9,299
$9,029
$270
3.0%
Missouri S&T
$9,350
$9,084
$266
2.9%
UMSL
$9,314
$9,038
$276
3.1%
UM Average per SB389 definitions
$9,167
$8,899
$268
3.0%
14
%
Change
Average Annual Tuition & Required Fee Change
Over 5-years is the Lowest in the Region
50%
FY2009-2013 Changes in Undergrad Resident Tuition &
Required Fees
45.3%
40%
30%
20%
10%
21.0% 21.8% 20.7% 18.2% 19.9%
23.1%
26.2%
25.3%
19.8%
13.1%
5.3%
5.4%
5.2%
4.5%
5.0%
5.8%
6.5%
6.3%
9.0%
4.9%
2.3%
0%
5 Year change
Average Annual Change
15
3.3%
11.3%
University of Missouri
Consolidated Financial Statements
16
16
FY 2012 Statement of Net Assets*
Total Assets: $6.4 billion
Total Liabilities: $2.3 billion
Cash & Cash Equivalents
$362.78 million
Current Liabilities
Accounts & Other Receivables
$390.56 million
Inventories, Prepaid & Other
$66.58 million
Bonds & Notes Payable &
Capital Leases
Investments
$2.66 billion
Property, Plant and Equip.,
net
$2.85 billion
Deferred Outflow of
Resources
$935.39 million
$1,122.31 million
Other Noncurrent
Liabilities
$215.24 million
Total Net Assets: $4.1 billion
$30.41 million
Invested in Capital Assets, Net
of Related Debt
$1.54 billion
Restricted
$1.16 billion
Nonexpendable .77 billion
Expendable
.39 billion
Unrestricted
*Excludes the University Retirement and Other Postemployment Benefits Trust Funds
17
$1.38 billion
University of Missouri System Credit Ratings
 University of Missouri System Long-term Debt Ratings
-- Moody’s – Aa1
-- Standard & Poor’s – AA+
 Moody’s Long-Term Debt Rating Definitions
-- Aaa - strongest creditworthiness
-- Aa - very strong creditworthiness
-- A - above-average creditworthiness
-- Baa - average creditworthiness
18
Retirement Fund / Endowment Pool Annualized Historical Performance
Annualized Returns - Periods Ended 9/30/2012
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
1 Year
3 Years
5 Years
10 Years
20 Years
Retirement Fund - Actual
13.9%
8.4%
1.3%
8.4%
8.5%
Retirement Fund - Benchmark
15.3%
8.5%
1.7%
8.7%
n/a
Endowment Pool - Actual
15.0%
8.1%
1.6%
8.0%
8.1%
Endowment Pool - Benchmark
16.8%
8.3%
1.6%
8.6%
n/a
19
19
Endowment Spending Policy & Distribution
 Goals: transparency, improved budgeting, long-term growth
without sacrificing short-term benefits
 The new policy applies a distribution rate of 4.5% to the trailing 28
quarter average market value of the Endowment Pool.
 Transition from 5.0% to 4.5% would be methodically phased in
over 5-7 years in a manner that would not cause year over year
decreases in the annual distribution.
 Measurement date changed from June 30 to Dec 31




Budget exact amount for next fiscal year
Improves transparency
Actual distribution of budget prorated over 12 months of fiscal year
Actuals allowed to go negative to the extent of the budgeted distribution
20
FY2012 Statement of Revenues Expense and
Changes in Net Assets: Revenues *
Operating Revenues: $2.1 billion
Nonoperating Revenues: $609 million
($ Millions)
($ Millions)
Net Tuition & Fees
$545
State Appropriations
$ 398
Government Grants &
Contracts
$ 241
Federal Appropriations
$ 28
Federal Pell Grants
$ 62
Private Grants & Contracts
$ 71
Endow/Invest Income
Sales & Services
$ 380
Private Gifts
UM Health Care
$ 813
Other
$ 55
*Excludes the University Retirement and Other Postemployment Benefits Trust Funds
21
$ 31
$ 90
FY 2012 Operating Expenses: $2.66 billion *
By Natural Classification
By Function
($ Millions)
($ Millions)
Salaries and Wages
$1,318
Instruction
$ 605
Staff Benefits
$ 360
Research
$ 210
Supplies, Services and Other
$ 763
Public Service
$ 147
Scholarships/Fellowships
$
Academic Support
$ 134
Depreciation
$ 161
Student Services
$ 75
Institutional Support
$ 103
Oper. & Maint. Of Plant
$ 97
Scholarships/Fellowships
$ 60
Depreciation
$ 161
Auxiliaries
$ 465
Hospital & Clinics
$ 605
60
*Excludes the University Retirement and Other
Postemployment Benefits Trust Funds
22
University Stewardship
The University of Missouri takes its
stewardship responsibility seriously and
engages in a continuous process to identify
opportunities to reduce costs and increase
efficiencies.
Since 1998, the University of Missouri System
has systematically collected and reported on
initiatives that have resulted in increased
effectiveness and efficiency of University
operations.
23
Cost Management: $246 million in
FY2009-FY2012
 Cost Management – initiatives that produce cost savings or
eliminate costs
$80.0
$70.0
Operating Expense
Cuts/Other
$60.0
$50.0
Energy Conservation &
$40.0
Savings
$30.0
Deferral of M&R
Strategic Procurement
$20.0
$10.0
Workforce Reductions
$0.0
$ Millions
FY2009
24
FY2010
FY2011
FY2012
Summary Impact of Actions Over Last 4 Years
$411.7 million
$450.0
$400.0
$350.0
$300.0
$250.0
Revenue Enhancements
$200.0
Cost Management
Cost Avoidance
$150.0
$100.0
$50.0
$0.0
FY2009
FY2010
FY2011
FY2012
$ Millions
25
Total
FY 2013 University Budget
26
FY2013 $2.7 billion Budget by Fund Type
Loan,
Endowment
& Plant,
$91.7, 3%
Restricted,
$302.6, 11%
Operations,
$1105.3,
40%
Other
Unrestricted,
$585.7, 21%
Hospital
Operations,
$682.7, 25%
Dollars in Millions
27
FY2013 $2.7b Budget Sources
State
Appropriations
14%
Net Student Fees
18%
Grants and
Contracts
13%
Other Income
2%
Gifts
2%
Endowment &
Investment
Income
Auxiliary
4%
Enterprises
Patient Revenues
24%
20%
28
FY2013 $2.7b Budget Uses
Benefits
14%
Salaries and
Wages
49%
Operating
Expense
29%
Interest Expense
2%
Depreciation
6%
29
FY2013 $2.7b Budget Uses: Programmatic
Instruction,
25.2%
Hospitals,
24.9%
Research,
8.6%
Auxiliaries,
18.2%
Public Service,
5.6%
Academic
Support,
5.8%
Scholarships,
3.0%
Plant O&M,
4.5%
Student
Institutional Services,
Support, 4.1% 2.7%
30
30
FY 2014 University Budget Outlook
31
FY 2014 UM Preliminary Budget Issues
Control rate of increase in expenses relative to
revenues
Revenues
Flat state support
Constraints on tuition increases
Expenses
Increase in salaries and wages: merit & market
Increase in medical benefits
Increase in required contribution to Retirement Fund
Increase in M & R
32
32
Other Issues on the Horizon
Performance funding
Limited capacity to increase tuition & fees
Pressure to reduce costs
Pressure to increase productivity
Pressure to increase output
Retention rates
Graduation rates
# of Degrees Granted
Transparency and accountability
33
Projected Marginal Costs for FY2014 Budget $51.2 million
Dec
Jan
$19.2
$19.9
1.
Salary & Wages Increase
2.
Benefits on Salary & Wages Increase
5.4
6.4
3.
Flat Rate Benefit Increase (1.5% of Salary
& Wages)
7.8
9.1
$32.4
$35.4
4.
Total Compensation
5.
Increase in M&R (inflation)
1.4
1.4
6.
Other Marginal Cost Increases
7.6
9.1
7.
Costs Due to Enrollment &Priorities
4.9
5.3
$46.3
$51.2
8.
Total Marginal Cost Increases
$ in Millions
34
Projected Marginal Revenues for FY2014
Budget - $21.1 million
Dec
Jan
$9.5
$8.1
2. Increase in Net Supplemental from rate
changes
2.4
2.3
3. Increase in Net Tuition Above Inflation
1.6
1.9
4. Increase in Net Tuition & Fees from
Enrollment
6.6
4.9
5. State Appropriations Change
0.0
0.0
6. Increase in Other Revenues (incl. dedicated)
1.2
3.9
1. Increase in Net Tuition from Inflation (2%
Dec; 1.7% Jan)
7.
Total Marginal Revenue Increases
$ in Millions
35
$21.3 $21.1
Preliminary Funding Gap of $30.1 million
1.
Marginal Cost Increases
Dec
Jan
$46.3 $ 51.2
2.
Marginal Revenue Increases
$21.3 $ 21.1
3.
Net Funding Gap
$25.0 $ 30.1
4.
Gap as a % of Operating Expenses
2.3% 2.7%
Impact of 1% inc/dec State Approps (net)
$ 3.8 $ 3.8
Impact of 1% Rate inc in Net Tuition & Fees $ 4.8 $ 4.8
Add’l Cost to reach M&R policy (FCNI of 0.30) $ 49.3 $ 49.3
Strategic Reallocation
1-2%
5.
6.
7.
8.
$ in Millions
36
FY2014 Core Operating Appropriations
Summary
I.
Minimum Funding for Core Operations
$417.9
FY13 Base $398M; UMKC/MSU Pharmacy $2M; MOFAST
$0.3M; Core Operating Support $15.7M; St. Louis Equity
$1.9M
II.a. Advancing Missouri's Competitiveness–
STEM Workforce Needs in STEM $20.2M; Science &
55.2
Engineering Equipment $2M; STEM Enrollment Growth
$16.6M; STEM Infrastructure $16.4M
II.b. Advancing Missouri's Competitiveness –
Caring for Missourians – Phase 2
Total Core Request
$ in Millions
37
10.3
$483.4
Other Strategic Operating Investment Needs
1. Protecting the University’s Infrastructure Base
M&R – year 1 of 2 year request
$12.3
2. MU Medical School Partnerships
10.1
3. Translational Science
20.0
4. Academic & Research Parity w/ Peers
15.6
Total Other Strategic Investment Needs
$ in Millions
OPEN – GB – INFO 2
38
$58.0
FY 2014 Capital Appropriations Request
State Request
Campus
Total
Total Tier I
$381,190,000
$41,020,000 $422,210,000
Total Tier II
$109,432,000
$28,412,000 $137,844,000
Total Tier III
$145,221,000
$27,211,000 $172,432,000
$635,843,000
$96,643,000 $732,486,000
Total Rehab & New
Construction
Total Engineering
Equip
$1,432,800
39
$1,432,800
$2,865,600
FY 2014 Tier 1
Capital Appropriations Request
Rehabilitation & New Construction
State Request
Critical Facility Needs
Campus
Total
$190,042,000
$0
$190,042,000
Benton/Stadler Renovation-UMSL
$60,000,000
$0
$60,000,000
College of Engineering - Lafferre Hall
Reconstruction, Additions & Renovations-MU
$54,735,000
$13,684,000
$68,419,000
School of Medicine Renovation and Health
Sciences Education Building Phase II –UMKC
$48,459,000
$27,336,000
$75,795,000
Chemistry and Biological Science RenovationS&T
$27,954,000
$0
$27,954,000
$381,190,000
$41,020,000
$422,210,000
$49,062,000
$0
$49,062,000
Total Tier I
State Historical Society Building & Museum
40
Strategic Planning
41
Developing system and campus strategies in a time
of tremendous challenge and change
“We don’t have a viable
business model.”
“Faculty members feel overloaded
and deans are concerned that
research productivity is declining.”
“We are being forced to do more
with fewer resources and at some
point it does affect quality.”
“We’re going to hit a brick
wall at some point.”
Some challenges confronting
the system:
1. Reduced state and federal
funding
2. Limits on tuition increases
3. Changes in student
demographics
4. The impact of technology on
teaching and learning
5. Public accountability
6. The economic crisis
7. The demand for greater higher
education access and increased
number of degrees conferred
8. Skilled workforce demands
“Our laboratories are in worse shape than the
high school laboratories.”
© Copyright 2012 Innosight LLC
42
“We have survived the funding
cuts by growing enrollment, but
we’re reaching capacity.”
“With the shift to online
learning, there are big
questions…”
“What is the end to this? What
will be cut next?”
“We need to fight to keep our
formula funds.”
Strategic Planning Goals
 Develop campus strategies and a system strategy that build
on our unique advantages and reflect clear trade-offs;
 Develop campus strategies and a system strategy that clearly
serve the identified needs of the state and the regions we
serve;
 Develop ways to incorporate disruptive innovations into the
business model;
 Develop sustainable financial plans to support the strategies;
 Identify ways that we can further leverage being a system
both academically and operationally;
 Identify criteria, other than history, for allocating a portion of
state resources toward strategy execution beginning with 5 10% of the 2014 appropriation and growing over time.
43
Strategic Planning Timeline
June Workshop
• Develop draft
strategy
statements
October
Workshop
November February
• Establish
situational
awareness
• Identify key
“themes” and
“levers”
• Learn
principles of
ideation
• Make case for
change
• Build
consensus
• Finalize
strategy
statement,
themes and
levers
• Draft themes
and levers
• Finalized
strategy
statements,
themes and
levers
March
Workshop
• Learn to
identify, plan
and measure
activities that
will support
the strategy,
theme and
levers
April –
June
• Plan activities
• Engage
activity
owners
• Develop final
strategic plan
Output
• Draft strategy
statements
© Copyright 2012 Innosight LLC
44
• Draft activities
and metrics
• Final strategic
plan with
detailed
activities and
metrics
A concise strategy statement has discrete
building blocks

3 required
components:
OBJECTIVE
OBJECTIVE
 A single objective
 Measurable and specific
 Time bound
 Addresses key
challenges
EFFECTIVE:
INEFFECTIVE:

SCOPE
 Describes in detail which
customer you are
pursuing
 Describes in detail the
product or service you
are offering to the
customer

ADVANTAGE
 Describes the unique
activities or assets that
no other organization
can claim
“Increase enrollment to 20,000
by 2020”
“Career-focused education for
full-time undergraduates who
are interested in STEM subjects”
“Internship programs with 40
partner employers in the St.
Louis area”
“Increase the number of
qualified graduates”
“Aligned curriculum and student
experience for undergraduates”
“World class instructors”
© Copyright 2012 Innosight LLC
Source: Collis, David J., and Michael G. Rukstad. "Can You Say What Your Strategy Is?“
Harvard Business Review (April 2008). Print.; Innosight analysis. 45
A strategy statement is not a mission
statement
Hierarchy of organizational statements
MISSION
Why we exist
“…discover, disseminate,
preserve and apply
knowledge…”
VALUES
What we believe in and how we
will behave
“…Respect, Responsibility,
Discovery, Excellence…”
STRATEGY
What our competitive game
plan will be
The basic elements of a
strategy statement:
OBJECTIVE = Ends
SCOPE = Domain
ADVANTAGE = Means
Metrics and Financial Plan
How we will monitor and
implement that plan
© Copyright 2012 Innosight LLC
Source: Collis, David J., and Michael G. Rukstad. "Can You Say What Your Strategy Is?"
Harvard Business Review (April 2008). Print.; Innosight and University of Missouri analysis.
46
A critical test: The strategy should explain how a campus
will leverage its unique strengths to overcome challenges
Mission and Vision
Barriers
Current State
© Copyright 2012 Innosight LLC
What specific barriers
does your campus
face?
47
UM System Draft Strategy Statement
The UM System will collaborate with the campuses in achieving, by
2018, mutually agreed upon, best-in-class, performance by:
1. Leveraging our unique campus strengths and resources,
2. Developing and applying leading practices, and
3. Advocating for higher education and the university.
© Copyright 2012 Innosight LLC
48
Questions?
49
Appendix - Statistics
50
50
Operating Statistics
 Statistics – FY 2012
• Accounting Transactions (14.1 million)
• Bank Reconciliation (53 bank accounts)
• Accounts Payable (~ 322,500 payments; ~$2.0 billion)
• Payroll Processing (47,141 Form W-2s; 4,838 Form 1099-MISCs; 9,103
Form 1099-Rs; 81,295 Form 1098-Ts)
 Total Current Funds Budget (FY2013) = $2.7 billion
• Operations Budget = $1.1 billion
• Auxiliaries & Service Operations Budget = $1.3 billion
• Restricted Budget = $302.6 million
 Appropriations Request for Operations (FY2014)
• Core Mission = $483.4 million
• Other Programs = $25.1 million
51
Operating Statistics
 Retirement Fund
• Defined benefit plan: $2.8 billion (as of 9/30/2012), 46 Investment Managers
 Endowment Fund
• Multiple pooled funds: $1.1 billion (as of 9/30/2012)
• Endowment Pool, 46 Investment Managers
• Fixed Income Pool, 1 Investment Manager
• Almost 5,000 individual endowments
• Funds held in trust by outside organizations: $120.8 million (as of 6/30/2012)
 General Pool
• Represents the University’s cash and reserves
• $1.7 billion (as of 9/30/2012)
52
Operating Statistics
 Debt Issuance
• System Facilities $1.368 billion outstanding as of 06/30/12
• Bond Rating
Aa1 with Moody’s, AA+ with Standard & Poor’s
 Bank Relationships
• One primary bank with 12 different depository banks and 4 campus bank facilities in Missouri
• Checks deposited annually over $468 million; electronic receipts of over $2.2 billion
• Ensure funds are available for 505,000+ vendor and employee payments issued annually,
totaling approximately $3 billion
• Fund transfers for purchase of securities of $5.5 billion; ACH/wire transactions to pay vendors
and employees of $2.3 billion annually; checks issued to pay vendors and employees of $707
million
 Credit Cards
• Manage credit card operations at 330 locations on four campuses, Hospital and internet
• Annual volume $88.4 million
 Lockbox
• Dollar amount of checks and credit cards processed in calendar year 2012: $332 million
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Operating Statistics
Property
Owned in Missouri:
2,123 acres on-campus
17,314 acres off-campus
582 acres
Owned in Other States:
Transactions during FY12:
Sales
3@
Acquisitions
8@
Leases to Others
78 @
Leases from Others 59 @
54
$
790,500
$ 13,171,836
$ 4,577,913
$ 2,652,170
Operating Statistics
 Facilities Planning & Development





1,596 Buildings, 29.2 million gross square feet
Replacement Value
$
7.8 billion
Plant Operating Expenditures
$ 69.4 million
Maintenance & Repair Expenses
$ 57.8 million
Design & Construction Contracts $ 134.8 million
 Minority Business Development
Services & Supplies
Financial Services
Architecture/
$ 5,753,912 Broker Transactions
Engineering Services
Bonds Issued
Construction Services $ 20,620,030
Procurement
$ 26,376,968
55
$39,872,746
$ 610,000
Operating Statistics
Records Management
• 110,825 boxes stored
• 35,750 activities (lookups, filings, destruction)
Risk & Insurance Management (estimated FY13)
•
•
•
•
Total cost of risk
Commercial Insurance
Self Insurance
Excess Commercial Insurance
56
$ 23,335,510
$ 2,976,149
$ 17,744,431
$ 2,614,930
Procurement/Supply Chain
The Procurement & Supply Chain departments work under a Shared Services model utilizing
comprehensive Memos of Understanding (MOU’s) and report to the Chief Procurement Officer,
this includes:
UM Procurement Services
Procurement Services is responsible for the contracting and procurement for the entire University including UM
System, Columbia, Missouri S & T, UMSL and UMKC campuses. They produce a comprehensive scorecard quarterly
for the Vice Chancellors (in a shared governance model) that report on pre-determined service level expectations
and key performance indicators.
UM Procurement Operations
In their role they work closely with Procurement Services and the Healthcare Supply Chain team and are
responsible for implementing, maintaining, and managing procurements software and web applications, as well as
developing and reporting data from those applications. This includes providing a Hotline (comprehensive call
center) for a customer base of nearly 5000 users.
MUHC Sourcing and Supply Chain (SSC)
SSC provides end to end supply chain services for all of MU Health Care. They differ from UM Procurement
Services in addition to contracting and procurement they also provide Distribution, Motor Transport (Couriers) and
a comprehensive Value Analysis program. Their operations are subject to a many regulatory compliance
requirements including the Joint Commission and Centers for Medicare & Medicaid Services (CMS). Their offices
and warehouse are located off-site in the Quarterdeck Building and are a 24/7-365 operation.
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UM Procurement/Procurement Operations
The University Procurement team impacts approximately $370 Million in expenses annually and is a six (6)
year National Procurement Institute award winning operation. They have representation providing
services on each of UM’s campuses in a centralized shared service model.
Operating Statistics
Savings/Revenue FY 12
Process Savings
RFP/B Resulting in PO
RFP/B Resulting in contract
Cost Avoidance using SMS
Negotiated Savings
RFP/B Resulting in PO
RFP/B/GPO results in contract
Revenue
PCard Rebate
SMS Rebate
$13,750,297
11,246 calls were handled by the Operations Hotline in FY 12
52,883 Purchase Orders were processed for $167,376,490
$ 3,981,145
$ 384,070
$ 655,798
$ 1,724,707
$ 4,934,589
44,784 Show Me Shop Orders were placed for $ 31,688,178
UM produced 368,179 Procurement Card/Fleet transactions
for a value of $ 99,626,540
$ 1,523,024
$ 546,964
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MUHC Sourcing and Supply Chain (SSC)
The supply chain services University Hospital, MU Psychiatric Center, Missouri Orthopedic Institute,
Women’s and Children’s Hospital, Ellis Fischel Cancer Center, Missouri Center for Outpatient Surgery,
Missouri Rehabilitation Center and all clinics (local and outlying).
Operating Statistics
Savings/Revenue in FY 12 Total
$13,209,954
In FY 12 the health systems perpetual inventory
locations averaged 17.4 turns on a goal of 12.
Process Savings
RFP/B Resulting in PO/Contract
$ 752,796
Par/Inventory Reductions
$
63,051
Cost Avoidance/ UHC/Novation
$ 5,366,599
Negotiated Savings
Reduction in previous price paid
$ 1,634,921
Contract negotiated savings
$ 2,964,398
Rebates
Manufacture/Standardization Rebates $ 433,874
UHC Patronage Equity Credits
$ 481,942
PHS Indigent Drug & Device Recovery $ 312,373
Perpetual Inventory Project BS Adj. $ 1,200,000
Nearly $4M in inventory is managed in Perpetual
Locations and Non-Perpetual Locations account for
$ 11,514,634 in inventory.
Average monthly issues from inventory = $ 2,240,244
Inventory Picks/Month average 467,932 lines
60, 643 Purchase Orders were processed in FY12
59