ILLINOIS STATE
UNIVERSITY
BOARD OF
TRUSTEES
Resolution No. 2014.10/26
FY2015 Operating Budget
Resolution
Whereas, the Board of Trustees of Illinois State University has the authority to approve the University’s annual
operations and grants budget, and
Whereas, the Illinois Board of Higher Education policies stipulate that the Board of Trustees shall approve an
official budget for FY2015 by source of funds, object and function;
Therefore, be it resolved that the Board of Trustees approves the FY2015 Budget for Operations and Grants totaling
$425.6 million that is outlined herein.
Board Action on:
Motion by:
Second by:
Vote:
Yeas:
Nays:
Postpone:
Amend:
Disapprove:
Approve:
ATTEST: Board Action, October 24, 2014
_______________________________
Secretary/Chairperson
Board of Trustees
Illinois State University
FY2015 Budget for Operations and Grants
Background
In FY2004, the Illinois Board of Higher Education (IBHE) adopted several new policies related to fiscal
accountability in higher education. One policy calls upon each public university governing board to review and
approve an official budget each fall. The IBHE policy requires the budget be approved by source of funds, by
functional expenditures and by objects of expenditure. Moreover, the specific functions and objects of expenditure
are defined by the IBHE. Those definitions are provided in Appendix A.
The University’s major sources of funds can be grouped into two broad classifications– unrestricted purpose funds
and restricted purpose funds. Unrestricted purpose funds are those that the University has the most discretion in
allocating among its instruction, public service, research and academic and institutional support functions. These
funds include:

State Appropriated Funds. Normally referred to as General Revenue Funds, these monies are
appropriated to Illinois State University annually by the General Assembly and approved by the Governor
for ordinary operational expenses.

University Income Fund. Include annual tuition revenue and some miscellaneous instructional fees.
State appropriated funds and the University Income Fund are aggregated and collectively budgeted as General
Revenue Funds.
Restricted purpose funds are those funds whose use is restricted either by a granting agency, legislative statutes and
rules, or by other contractual commitments. These funds include:

Bond Revenue (Auxiliary Facilities System – AFS): Revenues that are derived from the operation of
facilities constructed with proceeds from debt issued by the University, such as residence halls and dining
centers. The revenue is used both for operations of the unit (Housing and Dining) and to repay the debt to
the bond holders. These funds cannot be used for other purposes.

Grants and Contracts: Includes funds that are awarded to individual faculty or staff members for
research projects or institutional improvement. Funds may come from federal, state or local grant
foundations and are governed by individual guidelines of the foundation. Also included in the category are
federal and state student financial aid funds granted to the University to be distributed to students.

Other Local Funds: Includes monies generated by self-supporting units such as the University Farm,
monies from student fees such as the athletic fee, and monies generated by charging a course material fee.
These funds are restricted in use to the specific purpose for which they are charged. In other words,
revenue generated from a course material fee must be used to purchase materials for this same course in the
future. These funds are sometimes referred to as “Agency Funds.”
Board of Trustees Illinois State University – FY2015 Operating Budget
10/24/2014
Page 2
Context
Table 1 presents a summary FY2014 projected and actual1 revenues by fund source in order to provide a context for
the proposed FY2015 operating budget. Also provided is the dollar and percentage change between FY2014 actual
revenues and FY2015 projected revenues by fund source.
Table 1
Illinois State University
Fiscal Year 2014 Projected and Actual Revenues and Fiscal Year 2015 Projected Revenues
(in thousands of dollars)
Source of Funds
FY2014
Projected
Revenue
Actual
Revenue
Proposed FY2015
Percent
of Total
Projected
Revenue
Percent
of Total
FY2014-FY2015
Dollar
Change
Percent
Change
Unrestricted
State Appropriation 1
$
74,089
18.0%
73,889
17.4%
171,111
172,586
41.8%
180,627
245,200
246,675
59.8%
Bond Revenue Operations
79,681
83,575
Grants and Contracts
31,058
Other Local Funds
University Income Fund
Subtotal
74,089 $
$
$
(200)
-0.3%
42.4%
8,041
4.7%
254,516
59.8%
7,841
3.2%
20.3%
87,486
20.6%
3,911
4.7%
27,535
6.7%
27,100
6.4%
(435)
-1.6%
57,259
54,810
13.3%
56,546
13.3%
1,736
3.2%
167,998
165,920
40.2%
171,132
40.2%
5,213
3.1%
413,198 $ 412,595
100.0%
425,649
100.0%
$ 13,054
3.2%
Restricted
Subtotal
Total
1
$
$
Includes $3.078 million transferred to Central Management Services for Group Health Insurance.
Table 1 shows that actual revenues from all fund sources in FY2014 were $412.6 million, which is within 0.2
percent of estimated. Looking ahead to FY2015, it is expected that revenues for all fund sources will sum to a 3.2
percent overall increase.
As demonstrated in Table 1, 40.2 percent of the University’s FY2015 budget will be made of restricted funds.
Restricted funds are primarily comprised of Bond Revenue Operations, such as housing, dining and student activity
operations. Other Local Funds, or “Agency” funds are expected to represent 13.3 percent of the total University
budget and Grants and Contracts are expected to represent 6.4 percent. The projected change from FY2014 to
FY2015 for all Restricted Funds is an increase of 3.1 percent, resulting primarily from enrollment and various fee
increases.
As Table 1 demonstrates, FY2015 Unrestricted Funds are expected to increase 3.2 percent. This encompasses a $200
thousand dollar decrease to the state appropriation and an increase to the University Income Fund resulting from an
increase in projected enrollments as well as tuition and fee rate increases previously approved by the Board of
Trustees.
1
As of June 30, 2014
Board of Trustees Illinois State University – FY2015 Operating Budget
10/24/2014
Page 3
The proportion, of University operations and grants that are funded from State appropriations, continues to decline.
Only 17.4 percent of the total institutional operating revenues will come from State appropriated funds in FY2015,
including $3.1 million that will be transferred to the Illinois Department of Central Management Services as a
contribution toward Group Health Insurance premiums. Slightly more than 42 percent of all revenues will come
from the University Income Fund.
Budget Detail by Function and Object of Expenditure
Table 2 presents the estimated FY2015 operations and grants budget by fund source and by projected functional
expenditure. The budget is divided into eight functional areas: Instruction, Organized Research, Public Service,
Academic Support, Student Services, Institutional Support, Operations and Maintenance of the Physical Plant, and
Independent Operations (See Appendix A). These functional classifications are identified and defined in the Illinois
Board of Higher Education’s Resource Allocation Management Program (RAMP).
Table 2
Illinois State University
Fiscal Year 2015 Estimated Budget
Functional Expenditures by Fund Sources
(in thousands of dollars)
General
Revenue and
Income Fund
Local Funds
Grants and
Contracts
Instruction
$ 136,673.2
$ 5,693.6
$ 6,024.5
$ 148,391.3
34.9%
Organized Research
2,065.6
2,159.9
9,532.8
13,758.3
3.2%
Public Service
2,364.4
11,914.4
3,205.9
17,484.7
4.1%
Academic Support
26,832.0
603.1
27,435.1
6.4%
Student Services
21,463.2
31,707.4
61,493.4
14.4%
Institutional Support
24,907.9
2,547.7
O&M Phyical Plant
36,254.1
1,920.3
8,322.8
14.0
Independent Operations
Debt Retirement
Grand Total All Functions
Percent of Total
3,956.0
$ 254,516.4
59.8%
$ 56,546.4
13.3%
Bond
Revenue
$ 27,100.0
6.4%
Total
Percent of
Total
27,455.6
6.5%
21,006.7
59,195.1
13.9%
55,635.3
55,635.3
13.1%
10,843.8
14,799.8
3.5%
$ 87,485.8
$ 425,648.6
100.0%
20.6%
100.0%
Illinois State University expects to spend $179.6 million in FY2015 on the activities associated with its core
functions of instruction, research and public service. This amount is 42.2 percent of the estimated total University
expenditures. Most of these funds ($141.1 million) are derived from General Revenue appropriations or University
Income Fund. Another $27.4 million is expected to be spent on those activities that provide direct support to those
core functions, referred to in the table above as “Academic Support.” The largest allocation within this function is
for the operations of Milner Library but also includes some academic administrative functions.
Of the $59.2 million estimated to be spent on operations and maintenance, approximately $12 million will be for
utilities (electricity, natural gas, sewer and water). Deferred maintenance of facilities will be addressed to the extent
the budget allows. The University’s accumulated backlog of maintenance required to bring general revenue facilities
up to top working condition is estimated at $230 million.
Table 3 provides an estimated breakdown of anticipated expenditures by object of expenditure (see appendix A). All
universities are labor intensive organizations, and Illinois State University is no exception. Over half (53.4 percent)
of all funds are budgeted for personal service expenditures. Of the $227.1 million budgeted for personal services,
$163.8 million, or 72.1 percent, is expected from General Revenue and University Income funds.
Board of Trustees Illinois State University – FY2015 Operating Budget
10/24/2014
Page 4
Table 3
Illinois State University
Fiscal Year 2015 Estimated Budget
Objects by Fund Sources
(in thousands of dollars)
General
Revenue and
Income Fund
Local Funds
Grants and
Contracts
Bond
Revenue
Total
Personal Services
$ 163,829.2
$ 24,684.4
$ 11,620.8
$ 26,985.9
$ 227,120.3
53.4%
54.2
272.3
2,726.5
0.6%
Medicare
Contractual
Travel
Commodities
2,400.0
Percent of
Total
36,024.1
14,586.2
4,861.1
18,520.8
73,992.2
17.4%
1,911.2
943.2
268.3
127.8
3,250.5
0.8%
2,937.2
6,886.1
756.2
12,957.8
23,537.3
5.5%
12,713.3
1,309.2
739.9
1,690.5
16,452.9
3.9%
2,713.7
711.1
54.2
1,364.9
4,843.9
1.1%
557.3
175.6
32.5
121.8
887.2
0.2%
15,393.4
3,980.0
7,745.3
27,118.7
6.4%
Permanent Improvements
9,002.7
1,688.3
18,716.0
4.4%
Group Health Insurance
3,078.3
3,078.3
0.7%
Equipment
Telecommunications
Operation Auto
Awards and Grants
Refunds
76.1
Indirect Cost
Debt Retirement
8,025.0
103.8
1,506.2
3,956.0
General Services Overhead
Grand Total All Objects
Percent of Total
$ 254,516.4
59.8%
$ 56,546.4
179.9
0.0%
2,473.7
0.6%
10,843.8
14,799.8
3.5%
6,471.4
6,471.4
1.5%
$ 87,485.8
$ 425,648.6
100.0%
967.5
$ 27,100.0
13.3%
6.4%
20.6%
100.0%
The next largest object of expenditure is for contractual services (including Group Health Insurance) —$73.9
million or 17.4 percent of the budget. Of this amount, about $12 is expected to be devoted to utilities and another
$3.1 million will go to the Illinois Department of Central Management Services for group health insurance.
Personal services and contractual expenditures combined account for just under three-quarters of all expenditures.
The remaining quarter will be used for all other expenses such as equipment purchases, debt service, small
remodeling projects, building maintenance and student financial assistance.
Conclusion
This item was prepared in accordance with Illinois Board of Higher Education policy that calls upon public
university governing boards to review and approve an operating budget annually each fall. The material presented
does not represent a significant shift from previous years either in scope or priority. The University continues to
allocate its resources to its highest priorities and to support those initiatives that are outlined in its strategic plan,
Educating Illinois. Instruction and the support of high quality faculty and staff continue to be the two highest
priorities.
Board of Trustees Illinois State University – FY2015 Operating Budget
10/24/2014
Page 5
Appendix A
Standard Definitions of Functions and Objects of Expenditures
Functional Areas:
Instruction – Activities carried out for the explicit purpose of eliciting some measure of educational change in a
learner or group of learners. Activities include both teaching and facilitating activities.
Organized Research – Activities intended to produce one or more research outcomes including the creation of
knowledge, reorganization of knowledge and the application of knowledge. Research activities carried out on an
individual or project basis usually result from special institutional grant awards to individual faculty members.
Public Service – Program elements established to make available to the public the various unique resources and
capabilities of the University for the specific purpose of responding to a community need or solving a community
problem.
Academic Support – Activities that are carried out in direct support of the three primary programs of instruction,
organized research and public service.
Student Services – Activities carried out with the objective of contributing to the emotional and physical well-being
of students as well as to their intellectual, cultural and social development outside the context of the University’s
formal instructional activities.
Institutional Support – Activities carried out to provide for the day-to-day functioning as well as the long-range
viability of the University as an operating organization.
Operation and Maintenance of the Physical Plant – Activities related to maintaining existing grounds and
facilities used for educational and general purposes, providing utility services, campus security and fire protection,
transportation and rental of space.
Independent Operations – Auxiliary Services and programs and activities that are unrelated to the primary mission
of the university (instruction, organized research and public service).
Objects of Expenditure:
Personal Services – Wages and salaries.
Contractual – Payment for services from vendors. The largest contractual expenditure for Illinois State University
is utility expense.
Travel – Reimbursements to employees or vendors for in state or out of state travel including transportation,
mileage, lodging and meals.
Commodities – Purchase of articles of a consumable nature such as office supplies.
Equipment – Purchases over $100 for tangible personal property such as office furniture and equipment.
Telecommunications – All telephone and telecommunication services such as long distance charges, cell phone
charges, fax machine charges and local telephone charges.
Operation of Automotive Equipment – Operation, maintenance and repair of automotive equipment.
Board of Trustees Illinois State University – FY2015 Operating Budget
10/24/2014
Page 6
Awards and Grants – Most commonly used for awards and grants to students. The largest expenditure for Illinois
State University in this object is for Presidential Scholars.
Permanent Improvements – Remodeling and renovation of existing structures.
Refunds – Return of charges made in error.
Indirect Cost – Reimbursement from the granting agency for administrative costs associated with administering the
grant.
Debt Retirement – Payments for annual principal and interest on bonds and certificates of participation.
General Services Overhead – Payment for use of administrative services outside the immediate operation of the
unit. For example, the comptroller’s area, which is supported by general revenue funds, performs accounting
functions for all areas on campus; therefore, the non-appropriated units pay a portion of their expenses.
Board of Trustees Illinois State University – FY2015 Operating Budget
10/24/2014
Page 7