budget book 2017 - utas

BUDGET BOOK 2017 July 2017

Budget Book

BUDGET BOOK Contents

1 INTRODUCTION 1

2 PURPOSE 1

3 FINANCIAL RESULTS 2011 TO 2015 2

4 BUDGET PRINCIPLES 2

4.1 DEFINITION 2 4.2 BUDGET PURPOSES 2 4.3 BUDGET OBJECTIVES 3 4.4 BUDGET PERIOD 3 4.5 ASSUMPTIONS 3

5 BUDGET PROCESS 3

5.1 PLANNING STEPS 4 5.2 CAPITAL PLAN PROCESS 5

6 OPERATING BUDGET 6

6.1 REVENUE 6 6.2 EXPENSES 9 6.3 DEPRECIATION 10 6.4 STRATEGIC PLANNING AND INVESTMENT (LEVIES) 10 6.5 INVESTMENT INCOME 10 6.6 OVERHEAD PRINCIPLES 10

7 RESTRICTED FUNDS (INCLUDING RESEARCH) 11

7.1 GRANTS 11 7.2 INSTITUTES 11

8 CAPITAL PLAN 12

8.1 DEFINITION 12 8.2 RESERVES 13

9 CASHFLOW 13

10 GLOSSARY 14

11 APPENDIX A – TERMS OF REFERENCE 17

Budget Book 1 | P a g e

1 Introduction The University of Tasmania has an ambitious strategy for the State to drive higher education participation and social and economic impact. Our annual budget is a fundamental tool supporting our Open to Talent strategy objectives. It also provides the framework by which to incentivise and motivate appropriate fiscal decision-making. Disruptive technologies, the changing profile of our students and the on-going lack of clarity in relation to federal government policy and funding of the higher education sector are just some of the complexities that are now a part of our reality. As a nation, we are spending more than ever on higher-education. Yet, as a university we need to position ourselves to meet the demands of a higher student load, but we are funded less per student to teach them. The University of Tasmania has been reliant on federal funding for much of its history. Around 63 per cent of our funding comes from federal sources. This is significantly higher compared to other Australian universities. We will need to continue to grow traditional sources of revenue but also seek out ways to diversify this income and ensure the future sustainability of the University. In the last five years, we have grown our annual revenue (including research revenue) from around $400 to $560 million. An important proportion of growth is as a result of a successful international strategy. The quantum of the increase in revenue is still remarkable given the number of substantial federal funding cuts that have been imposed throughout that same period. All of those cuts have had an impact on our budget and are more visible in our core operating result which has been in the negative for the same period. Now, more than ever, we need to prioritise our limited resources to achieve the greatest strategic impact and financial sustainability.

2 Purpose The Budget Book documents the principles and processes that underpin the budget and provides the applicable framework and guidance to enable a shared understanding of the budget and the approval process.

For further information, please contact either the Central Budget Team or the applicable Finance hub team. Contact details are provided below:

• Central Budget Team - [email protected];

• Divisional Hub - [email protected];

• Arts, Business and Law (ABL) Hub - [email protected];

• Cradle Coast Hub (CCC) Hub - [email protected];

• Domain Hub - [email protected];

• Launceston Hub - [email protected]; and

• Science, Engineering and Technology (SET) Hub - [email protected].

mailto:[email protected]








3 Financial Results 2011 to 2015

There were significant changes to accounting for Contributions to Contracts/Research in 2012, to ensure the contribution was more transparently reported in Contributions to Contracts/Research.

4 Budget Principles 4.1 Definition

A budget is a short-term plan of action expressed in monetary termsi agreed and set by organisational management and approved by the organisation’s governance mechanisms. University budgets are set annually and approved ultimately by Council.

4.2 Budget Purposes

The purpose of a budget is to:

• Ensures that the organisation operates within its means;

• Translate strategic imperatives into financial plans – it is a strategic tool that enables planning;

• Increase co-ordination of functions within an organisation, as budgeting covers plans for all organisational units;

• Produce agreed targets at defined levels which individual owners have responsibility to achieve;

• Provide a mechanism for management of actual performance;

2011 2012 2013 2014 2015

Actual Actual Actual Actual Actual % CAGR % Movement

Student Revenue 240,955 265,029 291,845 314,211 338,695 7% 41%(Block) Government Funding 52,065 49,218 51,172 45,511 48,645 -1% -7%Contributions to Contracts/Researchi 41 (22,355) (17,162) (15,335) (17,048) -7% -24%Other Revenue 30,762 29,924 29,578 29,358 29,182 -1% -5%

Total Revenue 323,823 321,816 355,434 373,744 399,474 4% 23%

Salaries 197,055 205,781 219,191 235,584 247,509 5% 26%Other 104,000 89,959 97,723 111,542 114,799 2% 10%Levy Funded Initiatives (LFI) 11,472 15,365 15,957 16,983 14,891 5% 30%

Total Expenses 312,528 311,105 332,871 364,109 377,200 4% 21%

CASH OPERATING RESULT (EBITDA) 11,296 10,711 22,563 9,634 22,274 15% 97%

Depreciation 20,084 22,149 25,407 28,464 30,820 9% 53%

CORE OPERATING RESULT (EBIT) (8,789) (11,438) (2,844) (18,830) (8,546) -1% -3%

Non-Core Funded Initiatives (NFI)i - (26,111) (3,017) (5,064) (21,873) -3% -16%Investment Income 4,237 24,651 26,620 14,435 20,199 37% 377%Capital Income 22,218 30,050 13,114 6,672 1,578 -41% -93%

NET OPERATING RESULT 17,666 17,153 33,874 (2,787) (8,641) -187% -149%Net Movement in Restricted Funds 2,741 8,822 (3,033) 2,271 9,271 Investment Properies (incl NRAS) - (530) (8) 15 4,309 Actuarial Gains/(Losses) - 1,731 (1,134) 201 1,407 Philanthroy Contribution for MS2 - 8,219 7,622 - - TOTAL RESULT PARENT 20,407 35,396 37,315 (297) 6,349 -21% -69%i) CAGR and % Movement calculated from 2012 for this item

Statement of Comprehensive Income $'000s

2011-2015


• Positively motivate employees to attain outcomes / drives behaviours (incentivises); and

• Encourage a collegial approach to prioritisation.

4.3 Budget Objectives

The University sets its budget in accordance with University Council approved strategic goals and directives.

Underlying this are the following principles:

• The Net Contribution of each Faculty/Institute should be viable unless there is an approved strategic reason for this and a plan to return to viability within an agreed timeframe; and

• Divisional operational costs and corporate expenditure should be set to enable the University’s strategic direction and sustainability.

4.4 Budget Period

The University’s planning period a rolling five-year period, 2017 – 2021, with more scrutiny and emphasis applied to 2017 than the later years.

4.5 Assumptions

In order to prepare the budget, a set of assumptions is formulated to ensure consistency across the University, based on published rates where applicable. This ensures a logical base for the budget and then adjustments to these assumptions can be performed and quantified showing any potential risk/benefit if the assumptions differ from the final result.

Assumptions are provided for the following items:

• EBA increases/salary increase assumptions;

• CPI;

• CGS rates;

• FFPOS fees;

• FFPAU fees;

• Block Grant Funding;

• Investment Performance; and

• Cash Interest Rate. These assumptions will be advised to Finance Business Partners by the Central Budget Team.

5 Budget Process The budget process is the series of steps and approval processes required to produce an agreed organisational budget. It is a subset of the University’s annual planning process. The key steps in the development of the 2017 budget are shown below.


5.1 Planning Steps

* Refer to Appendix A for Terms of Reference for the above forums and Committees

PPRC

•Planning process to ensure that Organisational Unit (OUs) planning activities are coordinated and focused on delivering high level strategic objectives of the University through the integration of academic and financial planning

•29 February

VCAR

•VC convened panel to review performance to date, strategic priorities and future plans•6 - 27 June

VCAPS•28 July - 2017 Budget Context, Strategies to Drive in 2017, Maximising the Budget Model

BWG• late September - early October - BWG meetings (dates to be finalised)

CIC

•10 October - Approval of Capital Budget•See 4.2 Capital Budgeting Process for more detail

SENEX•Week commencing 17 October - Presentation of Consolidated Budget

SMT•25 October - Presentation of Consolidated Budget

Finance Committee

•25 November - Presentation and Endorsement of Consolidated Budget and Capital Plan

Academic Senate

•1 December - Presentation of Consolidated Budget and Capital Plan

Council•9 December - Approval of Consolidated Budget and Capital Plan


5.2 Capital Plan Process

The capital plan process is a subset of the overall planning process and is detailed below. Note that most approval points are integrated within the operating budget.

Capital Need Identified

•As part of the VCAR process the Organisational Unit (OU), identifies changes required to resources, as they impact on Key Performance Indicators. Some of the "changes to resources" are capital needs. This is done in consultation with Finance Business Partners and CSD/ITS/Research as appropriate.

VCAR

•Considers capital needs identified as part of the VCAR process•6 - 27 June

OrganisationUnit

•Reviews VCAR supported projects and prioritises plus other captial renewal requirements•Prepares proposal and business cases, as required, for presentation to CIC

CIC

•Capital Infrastructure Committee (CIC) reviews and prioritises projects against a set of criteria designed to assess key strategic and operational requirements and in view of existing commitments

•10 October - CIC endorses Capital Plan to submit to SMT, BEIC, Finance Committee, and Council, as part of the Budget

SMT/ Finance

Committee/ BEIC

•Consolidated Budget and Capital Plan receives endorsement from SMT, BEIC, and Finance Committee

•25 October - SMT•16 November - BEIC•25 November - Finance Committee

Council•9 December - Approval of Consolidated Budget and Capital Plan


6 Operating Budget 6.1 Revenue

Income is recorded against Faculties and Institutes, with some specific income items managed centrally, and incidental income flowing to Divisions where applicable. Income for specific contract research and other grants (tied funds) is recorded separately from general operating income in restricted projects, but forms part of the total University Result. This section contains descriptions of the main components of revenue and assumptions used to prepare budgets for each component.

6.1.1 Student Revenue

Student revenue is derived from both Australian Government income and full fee paying students. The student revenue budget is calculated using projected revenue rates and budgeted load.

Australian Government Income - Commonwealth Grant Scheme (CGS)

Component Explanation

CGS Commonwealth funding for Commonwealth Supported Places, primarily in bachelor courses of study (award course).

HECS HECS can be deferred by the student, resulting in the Commonwealth paying the University on behalf of the student (HECS‐HELP), or the Student can opt to pay their portion of the fees upfront (HECS‐Student Contribution).

Regional Loading Additional funding for regional Universities to meet the higher costs associated with their size and location.

Enabling Loading Additional funding to assist with the costs of providing enabling courses, which assist in preparing a student to commence an award course.

Medical Student Loading

Additional funding for CSPs in a medicine course of study, which on completion allows for provisional registration as a medical practitioner.

Transitional Loading

Additional funding to assist providers with transitional costs associated with changes to CGS/HECS funding arrangements.

Full Fee Paying Students

The University earns fee income from the following categories of students:

• Full Fee Paying Australian Students (FFPAU): Courses offered to domestic students on a fee paying basis. FFPAU fees can be deferred by the student, resulting in the Commonwealth paying the University on behalf of the student (FEE-HELP).


• Full Fee Paying Overseas Students (FFPOS): These fees are a result of students enrolling in courses which the university chooses to offer to overseas applicants, there are two types of overseas students:

o Onshore; and o Offshore.

Offshore students represent those students enrolled in Transnational Education (TNE) Programs.

EFTSL Budget

The prior three years Equivalent Full-time Student Load (EFTSL) actuals are used to produce initial EFTSL budgets, which are then subject to managerial overview for upcoming known changes and plans. The EFTSL budget is also referred to simply as the ‘load budget’.

6.1.2 Research Block Grant Funding

There are fundamental changes proposed to research block grants, which come into effect in 2017. Research Block Grants (RBG) are provided by the Australian Government to support research and research training through a number of performance based schemes under the Higher Education Support Act (HESA) 2003. RBG’s are allocated according to performance based formula and are independent of funding for specific research projects, programs or fellowships.

The recent changes roll the current six schemes into two – Research Support Program (RSP) and Research Training Program (RTP). The funding will no longer take into account performance relating to publications and Research Higher Degree (RHD) Load. Transitional provisions apply to cushion any shocks resulting from the changes.

The previous schemes were:

• Research Training Scheme (RTS);

• Joint Research Engagement (JRE);

• Sustainable Research Excellence (SRE);

• Research Infrastructure Block Grants (RIBG);

• Australian Postgraduate Awards (APA); and

• International Postgraduate Research Scholarships (IPRS). The two new schemes are outlined below. Research Support Program (RSP) RSP will provide around $879 million in 2017 to Australian HEPs as a flexible funding stream to:

• support the systematic costs of research, including the indirect costs of Australian competitive research grants;

• support the delivery of world class research;

• support collaboration with industry and other research end-users. RSP funding:

• Combines the previous schemes: JRE, RIBG and SRE;


• Drivers are research income;

• SRE funding moderators (Excellence in Research for Australia (ERA) and transparent costing) removed;

• Eligible expenditure: o Direct and indirect costs of research; o Cannot be used for capital infrastructure; o Cannot be used to support research students; and

• May be required to report on indirect costs of Australian competitive research grants in financial statements.

Research Training Program (RTP) RTP will provide around $1.01 billion in 2017 to Australian HEPs to:

• support the training of the next generation of researchers and innovators, both domestic and overseas research students;

• deliver graduates with the skills required to build careers in academia and other sectors of the labour market;

• support collaboration with industry and other research end-users;

• support overseas HDR students studying at an Australian HEP. RSP funding:

• Combines APA, IPRS and RTS;

• Drivers are completions and research income;

• Weightings continue (PhD, Masters, high cost, low cost). Increased weighting (double) for indigenous HDR completions;

• Increased flexibility on how funds are directed – domestic v overseas, amount of stipend, period of support; and

• Students eligible to receive: o Exemption from payment of student contributions amounts and tuition

fees. Costs include HDR supervisor costs, research project costs, industry placements, travel and HDR course development;

o Living costs support through annual stipend; and o Course related allowances (relocation, thesis, OS health cover etc.).

The proposed changes encompass increased emphasis towards Category 2-4 Engagement income, rather than Category 1 Competitive Income. Analysis indicates that as UTAS is relatively strong in Category 2-4 Engagement Income compared to the sector, and that the shift from HDR Load/Publications to Engagement Income should positively impact UTAS. Note that 2017- 2020 impacts will be constrained by transitional arrangements which have a 95% safety net and gradually introduce new formulas (25% per year).

6.1.3 Contributions to Contracts/Research

Contributions to contracts/research are made by the University to external contracts or Institute research; these include:

• University contributions to Institute Research (operating funded); and

• University contributions to external contracts, e.g. Research Contracts.


This line item reflects the investment made from operating to research.

6.1.4 Other Revenue

Other Revenue includes the following:

• Specific Income: o English Language Centre (ELC), including admission fees; o SSAF, funding received via the SSAF consultation group, the formal body

through which the University consults with the broad student community with membership including the TUU and elected student representatives, which align with the University’s strategic priorities for the student experience;

o Income received from University Commercial Services such as Student Accommodation, Sport and Recreation and Uniprint;

o Campus Services Income, e.g. Car parking; and o VET income.

• General Income: o Other fees and Charges (includes, fines, course materials); o Donations; o Sales of goods/services; and o Miscellaneous (includes rental income, research infrastructure income,

proceeds from sales of assets, commissions, conference registration income).

6.2 Expenses

6.2.1 Salaries

All permanent and fixed term salaries are budgeted at an individual employee level down to project. Prior to the commencement of the budget process, the budget model is pre-populated with current payroll (HRMS) data by position number, position title, pay class and associated on-costs, and the name of the employee currently in the position. The user modifies this data for their respective areas in line with expected future vacancy management requirements and contract end dates of fixed term employees, and in light of the strategic direction, constraints and demands.

Calculations take into account:

• EBA increases;

• Salary class increments applied as at 31st March each year;

• The budget assumes four (4) weeks of annual leave are taken within the year; and

• Minimum superannuation rate increases in line with current legislation (fixed term employees only).

A budget is also prepared for casual employees, however, this is calculated at an activity level rather than by individual employee.

6.2.2 Other

All other expenses are budgeted at a project level by expense type (natural account). To assist with this, the budget model is pre-populated with expenses by project and natural account from the current year (2016) forecast. It is then modified by the


budget owner in accordance with their future strategic requirements, constraints and demands.

There is a particular focus on contracts and known price/contract changes, activity level changes, CPI uplift where appropriate and savings opportunities.

Other expenses do not include expenditure of a capital nature. Please refer to Section 8.

6.3 Depreciation

Depreciation is a ‘non-cash’ expense recognising the reduction in the value of an asset that occurs over time as the asset gets older or as wear and tear occurs.

The majority of depreciation is borne by the Divisions, who manage the University wide held assets such as buildings, IT and the library. However, where assets are directly purchased by the Faculty or Institute OU, depreciation is charged directly.

6.4 Strategic Planning and Investment (Levies)

6.4.1 Levy-Funded Initiatives (LFI)

Strategic and operational levies were introduced to the University budget model in 2014 with the goal of driving the University’s strategic priorities. The intent is for the 2017 budget to continue to have strategic initiatives funded by levies.

The responsibility for these funded programs lies with the relevant Division however, the appropriateness and quantum of levies is tested at VCAPS, BWG’s, SENEX, Heads of Deans Meeting, Finance Committee and Council. At the end of the financial year, there is an acquittal process.

The funds are generated by charging the Faculties and Institutes a levy. The process enables Faculties and Institutes to bid for Strategic funding which is distributed in the form of a University Incentive payment.

6.4.2 Non-Core Funded Initiatives (NFI)

Non-Core Funded initiatives fall outside the scope of the University’s Core Operating Result, but determine the Net Operating Result. For 2017 examples include the:

• Transformation Program; and

• Underwood Centre.

6.5 Investment Income

The University holds investment funds in a number of managed portfolio and cash management accounts. These funds are managed by independent portfolio managers and are invested in cash deposits, Australian equities, overseas equities, fixed interest securities and property trusts under an approved investment policy. A longer-term investment horizon currently applies to the University’s investment portfolio, with an objective to contribute a rate of return of 3.5% above the rate of inflation. At this point it is estimated that the 2017 budget will assume a target rate of return of 5.5% (CPI 2% + 3.5%).

6.6 Overhead Principles


Divisions provide shared services and governance for the entire university. Divisional services include organisational governance, support services costs and other centrally managed operating costs including building maintenance, electricity, cleaning, marketing, insurance and IT infrastructure and support costs. Divisional costs are allocated to Faculties and Institutes based on an established set of drivers. The drivers are predominantly consumption based, and consider current activity patterns, student numbers, staff numbers and space occupancy.

As a result, the allocation of overheads provides Faculties and Institutes with:

• Transparency of the cost of services being provided to Faculties and Institutes;

• An understanding of costs associated with occupying space;

• Information on the levels of cross subsidisation; and

• Visibility of the underlying operating result of the Institute and the contributions by Faculties and Institutes to this result.

7 Restricted Funds (including Research) 7.1 Grants

The Restricted Funds Budget encompasses the Income and Expenditure for all Restricted Funds Projects by OU. These are external funds granted for a specific purpose and are grouped according to their Funding Source as below:

• Australian Research Council Research (ARC) Grants

• National Health and Medical Research Council (NHMRC)

• Other Research Grants

o Australian Government (non-ARC)

o Cooperative Research Centres (CRC)

o State Government Research

o Other Research

• Non-Research Grants

Budgets are prepared for all existing projects together with an estimate of new Research Income and required expenditure for each budget year.

7.2 Institutes

Institute Funds refers to Non Restricted Institute Collaboration Funds. Funds are contributed by the University and an external party to cover the Institute’s operating costs.

The University has three Research Institutes that are jointly funded in this way:

• Menzies Institute for Medical Research;

• Institute for Marine and Antarctic Studies (IMAS); and

• Tasmanian Institute of Agriculture (TIA).


The Budget for each institute includes:

• University Contributions, shown as ‘Contributions to Contracts’ on the University Operating Statement;

• Income relating to the JV/Collaboration agreement; and

• Expenditure from the activities of the Institute

It does not include expenditure relating to teaching activities undertaken by the Institute or other expenditure relating to the University’s Operating income.

8 Capital Plan 8.1 Definition

Capital expenditure is an expense where the benefit continues over a long period, rather than being exhausted in a short period. It is usually of a non-recurring nature and results in the acquisition or improvement of permanent assets such as property, buildings, motor vehicles, information technology or other pieces of equipment. To ‘capitalise’ an item of expenditure means to record it as an asset in the balance sheet rather than as an expense in the operating statement. Capitalising an item to the balance sheet recognises that the value and benefit from that expenditure will flow not only in the current year, but also in future years. The asset is then charged to the University’s operating statement as a depreciation charge over the estimated life of the asset. Possible indicators that expenditure would be capitalised include:

• Expenditure associated with projects that create or fundamentally change the use/functionality of an existing asset. Such projects are largely managed by Information Technology Services (ITS) or Commercial Services & Development (CSD) project managers;

• Purchase of a property and buildings;

• Improvements that increase the asset’s productive capacity;

• Significant one-off expenditure/project outside of normal operating expenses such as research vessels, equipment, IT networks etc.; and

• Items, over $10,000, of a long term nature that provide value to the University such as equipment, library collection and vehicles over future years.

It is important that the University captures all capital costs for financial reporting purposes and to improve transparency between the ongoing operational costs of running the university and the significant expenditure invested in capital.

8.1.1 Capital Approval Process

Capital project proposals are reviewed by the CIC under the annual approval process in accordance with the Committee’s terms of reference (see 10.4).

In order to assure a whole-of-university approach to the development of capital infrastructure, all proposals for capital works projects (including new constructions, renovations and services infrastructure installation/redevelopment), irrespective of funding source, must be reviewed and prioritised by CIC against a set of criteria designed to reflect key strategic and operational requirements.


Organisational Unit (OU) business continuity planning must be a key consideration in the detailed scoping of all construction, renovation and refurbishment works and major asset purchases or replacements submitted to the CIC.

8.1.2 Operational Units Capital Plan

For items of capital expenditure which are under $300,000 and specific to an OU, a budget will be allocated by the CIC to the OU. This amount will then form part of the OU capital plan and will be managed through the OU. The total capital plan for each OU will be advised after total capital funding envelope is presented and approved by Council.

8.1.3 Capital Income

Some capital projects may receive either full or partial external contributions.

8.2 Reserves

Faculties and Institutes are provided with the opportunity to accumulate reserves if they achieve a Gross Operating Result favourable to budget. At year end, any variation (either positive or negative) from budget at the Gross Operating Margin will be shared between the Faculty/Institute and the University 50/50. That is, 50% is transferred to the Faculty/Institute reserve balance. Faculties and Institutes are able to apply their reserves towards capital works or non-recurrent operating initiatives (i.e. strategic initiatives). Where expenditure approval has been given, funds will be released from the accumulated reserve (reducing the accumulated reserve balance) and a budget provided for the expenditure. Access to reserves will only be approved after an assessment is made on:

• The overall University cash flow position;

• The overall context of the University operating result; and

• If capital in nature, the impact on future operating costs of the University.

2017 opening reserves balances for Faculties and Institutes will be communicated in the first quarter of 2017.

9 Cashflow The budgeted cashflow estimates the University’s cash/bank balance at the end of the year, assuming the budgeted cash in-flows and out-flows from its operating activities and investments in capital.

The cashflow budget is calculated in a model which uses the operating budget and capital plan as its primary inputs. A monthly balance sheet is produced from the model taking into account working capital fluctuations and using a set of assumptions. A transfer from/to the investment fund may occur in accordance with operational requirements and Council approval.


10 Glossary Term/Acronym Definition APA Australian Postgraduate Awards ARC Australian Research Council BEIC Built Environment and Infrastructure Committee Bottom Up Defines the lowest level at which the budget is built. The project

level was used as the starting point for the 2017 budget. Budget A budget is the financial plan of an organisation’s operations and

a tool to control the allocation of and management of resources. BWG Budget Working Group CIC Capital Infrastructure Committee CFO Chief Financial Officer CGS Commonwealth Grant Scheme COO Chief Operating Officer Consolidated Budget

Core Operating Result (EBIT)

The Core Operating Result is calculated from the Gross Margin less Levies, Overheads and Space Charges.

CPI Consumer Price Index CRC Cooperative Research Centres CSD Commercial Services & Development CSP Commonwealth Supported Place Direct Costs Is a cost that is directly attributable to a Budget Centre, e.g.

salaries, equipment, training etc. Divisions Comprises:

- Division of the Vice-Chancellor - Division of the Provost - Division of the Chief Operating Officer - Division of the Deputy Vice-Chancellor – Research - Division of the Deputy Vice-Chancellor – Students & Education - Division of International

DVC Deputy Vice-Chancellor EBA Enterprise Bargaining Agreement EBIT Earnings before Interest and Tax EBITDA Earnings before Interest, Taxes, Depreciation and Amortisation ELC English Language Centre EFTSL Equivalent Full-Time Student Load ERA Excellence in Research for Australia FFPAU Full Fee-Paying Australian Student FFPOS Full Fee-Paying Overseas Student Forecast An estimate of the actual financial outcome for the balance of

the current accounting period or forthcoming period based on actual performance to date and other available information.

FTE Full Time Equivalent GM General Manager Gross Margin The Gross Margin is derived from Total Income less Direct

Costs. HECS Higher Education Contribution Scheme HEP Higher Education Providers


Term/Acronym Definition HESA Higher Education Support Act HRMS Human Resource Management System Indirect Costs Costs that cannot be directly charged/attributable to Budget

Centres, e.g. costs associated with employees providing administrative services across an organisation.

IMAS Institute for Marine and Antarctic Studies IPRS International Postgraduate Research Scholarships IT Information Technology ITS Information Technology Services JRE Joint Research Engagement JV Joint Venture LFI Levy-Funded Initiatives Net Operating Result

The Net Operating Result is calculated from the Core Operating Result plus/minus any non-core funded initiatives, investment income or capital income.

NFI Non-Core Funded Initiatives NHMRC National Health and Medical Research Council OU Organisational Unit comprises each:

Faculty, School, Centre, University Institute, Other University Entity, Division or University Business Enterprise

PPRC Planning, Performance and Review Committee RBG Research Block Grant Restricted Funds

Restricted funds are those monies received for a specific purpose or to support a specific purpose. Examples include research grant monies, collaboration funds and joint venture arrangements.

RHD Research Higher Degrees RIBG Research Infrastructure Block Grants RSP Research Support Program RTP Research Training Program RTS Research Training Scheme SENEX Senior Executive SMT Senior Management Team SRE Sustainable Research Excellence SSAF Student Services and Amenities Fees TIA Tasmanian Institute of Agriculture TNE Transnational Education Variance The difference between budget and actual income or

expenditure. VC Vice-Chancellor VCAPS Vice-Chancellor’s Annual Planning Summit VCAR Vice-Chancellor’s Annual Review VET Vocational Education & Training Whole of Life Project

Defines projects that run for longer than one calendar year (budget period) and enables users to see income and expenditure for the project since its inception.

Working Capital Cash available for day-to-day operations.


11 Appendix A – Terms of Reference The terms of reference of the University’s various committees and sub-committees that are relevant to the budget processes are listed below:

11.1.1 Planning, Performance and Review Committee (PPRC)

http://www.utas.edu.au/strategy-unit/planning/pprc

The objective of the PPRC is to ensure that faculties, institutes and divisions’ planning activities are coordinated and focused on delivering the high level strategic objectives of the University through the integration of academic and financial planning.

11.1.2 Vice-Chancellor’s Annual Review (VCAR)

http://www.utas.edu.au/strategy-unit/planning/vice-chancellors-annual-review-vcar <note this link has 2015 VCAR dates>

The Vice-Chancellor convenes a panel to review the performance of faculties, institutes and divisions and to approve their respective plans submitted as part of the PPRC planning process. The focus of the discussions is on performance to-date, strategic priorities and future plans. Clarity is provided in these meetings around initiatives, load and performance expectations.

11.1.3 Built Environment and Infrastructure Committee (BEIC)

http://www.utas.edu.au/university-council/about-the-committees/built-environment-committee

The committee is responsible for considering, reviewing and advising Council on the development, approval and implementation of:

• Priorities for major capital works

o A major capital project is one involving expenditure or receipt by the University of $5,000,000 and/or is one of strategic or political significance to the University.

11.1.4 Capital Infrastructure Committee (CIC)

http://www.utas.edu.au/chief-operating-officer/capital-infrastructure-committee-cic

The CIC is a sub-committee of the SMT and is responsible for the oversight of a capital governance model aligned with University business activities.

11.1.5 Senior Management Team (SMT)

http://www.utas.edu.au/vc/quick-links/senior-management

Terms of reference applicable to the budget process:

• Overseeing the development of University plans and budgets and for monitoring performance, quality and risk once the plans and budgets have been approved by Council.

11.1.6 Budget Working Group (BWG)

The BWG is responsible for the formation and review of the University Operating Budget within the overall fiscal framework set by University Council. The BWG comprises:

• Chief Financial Officer [Chair]

http://www.utas.edu.au/strategy-unit/planning/pprc

http://www.utas.edu.au/strategy-unit/planning/vice-chancellors-annual-review-vcar



http://www.utas.edu.au/chief-operating-officer/capital-infrastructure-committee-cic

http://www.utas.edu.au/vc/quick-links/senior-management


• Chief Operating Officer

• Provost

• General Manager Finance

• For Research Institutes, members as above and Deputy Vice Chancellor (Research)

• For Faculties, members as above and Deputy Vice Chancellor (Students and Education)

The OU General Manager(s), Finance Business Partner and Dean/Institute Directors/Divisional Heads (optional) present to the BWG. Separate meetings are held for each OU. Effectively the BWG meeting is a detailed presentation of each OU budget and a formal budget request process for variations from VCAR.

OU participants have the following responsibilities for BWG:

Role Overall BWG Responsibilities

Finance Business Partner

Preparer Co-ordinate all OU budget inputs and prepare the budget and analysis for the BWG.

General Manager

Budget Owner

Guide budget preparation ensuring adherence to OU strategic priorities.

Sign off on budget and underlying assumptions, e.g. load.

Dean Budget Owner

Communicate strategic priorities, particularly changes from VCAR.

Sign off on budget and underlying assumptions, e.g. load

OU participants are required to work together to prepare for the BWG meeting and presentation is a team effort.

11.1.7 Finance Committee

http://www.utas.edu.au/university-council/about-the-committees/finance-committee

Terms of reference applicable to the budget process:

• To provide strategic advice to Council on the University's financial performance and sustainability and on the financial implications of future plans

• To consider and recommend to Council – o the University's annual operating budget o the University's capital management plans and associated budget

• To monitor financial performance against the University's operating and capital budgets

http://www.utas.edu.au/university-council/about-the-committees/finance-committee


11.1.8 Academic Senate

http://www.utas.edu.au/academic-governance/academic-senate

The terms of reference for the Academic Senate are not specific on requirements relating to the university budget. However, precedent has ensured that Academic Senate has been updated and advised on status of the University budget and it is considered an important opportunity to inform this audience of University budget outcomes.

11.1.9 Council

http://www.utas.edu.au/university-council

In accordance with the University Council Charter, Council has resolved that its role is to accept ultimate responsibility for:

• Approving the annual budget, ensuring that the University finances are sound, and taking major financial decisions.

i Contemporary Accounting: A Strategic Approach for Users, 9th edition, P Hancock, P Robinson, M Bazley, Cengage Learning Australia, 2014.

http://www.utas.edu.au/academic-governance/academic-senate

http://www.utas.edu.au/university-council

budget book 2017 - utas

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