budget model redesign steering committee …...customizations –reflects model tweaks to address...

© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 1 © 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED.

BUDGET MODEL REDESIGNSTEERING COMMITTEE #6

April 07, 2020

DRAFT

© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 2

Discussion Topics

Huron is pleased to continue conversations with the Steering Committee, with this content intended to focus primarily on revenue allocations, cost pool allocation options, and a central funding mechanism.

Meeting Agenda

1. Decision Points Recap

2. Revenue Allocations

3. Cost Pool Allocations

4. Central Funding Mechanism

DRAFT


DECISION POINTS

1


Huron’s ApproachHuron continues to take an iterative approach to develop a pro forma budget model using actuals financial data from UCCS’s most recent fiscal year (FY2019). The Steering Committee has guided the model philosophy and structure and is actively engaged in conversation around model rules.

Philosophy

Structure

Allocation Rules & Incentives

Customizations and Local Adaptions

Flo

w o

f D

ec

isio

n P

roc

es

s

▪ Philosophy – reflects the university’s desired financial

management model, considering elements such as

centralization, authority, accountability, and

responsibility

▪ Structure – reflects the elements of the model with

respect to scope of funds, categorization of operating

units, presentation of data, etc.

▪ Rules – reflects how the model will portray the

institution’s internal economy and drive behavior

▪ Customizations – reflects model tweaks to address

operational realities, institutional culture, and local unit

needs

Recommendations provided by the Steering Committee have been instrumental in developing and testing scenarios

in the FY19 actuals model.

DRAFT


Key Steps In Model DevelopmentThe Steering Committee has provided preliminary recommendations on the model’s organizational

framework and devolution of revenue. Cost allocations are the primary focus for today’s conversation.

Element Description

1. Organizational

Framework

▪ Categorization of organizational units

▪ Identification of how hybrid units (e.g., units that have revenue-generating and

support/service-provider components) fall into organizational unit categories

2. Devolution of

Revenue

▪ Identification of sources of revenues and methodology for allocation (formula vs. direct)

▪ Proposing specific incentives for: tuition and fee revenues, appropriations revenues, indirect

(F&A) research revenues

▪ Reviewing overall local vs. central management of revenue streams

3. Allocation of

Costs

▪ Discussing approach to sharing indirect costs to units to reflect full costs of activities

▪ Categorizing costs into cost pools and selecting allocation mechanism (i.e. driver) to share

costs

4. Use of

Subvention Pools

▪ Addressing the provision of resources for operating subsidies or strategic initiatives which

align with the institution’s mission or strategic plan, including a “tax” on revenues or central

retention of select revenue streams

DRAFT


Preliminary RecommendationsA recap of preliminary recommendations provided by the Steering Committee are documented below.

Element Description

Undergraduate

Tuition Allocation

▪ Tuition premia for Beth-El, Engineering, and Business allocated to College of Record

▪ Base tuition allocated 80% to College of Instruction; 20% to College of Record

Graduate Tuition

Allocation▪ Allocated 100% to College of Record

State Appropriations

(Pending)

▪ Preliminary discussion re: portion for central retention

▪ Preliminary discussion re: portion for research subsidy

▪ Remaining allocable portion allocated 80% to College of Instruction; 20% to College of Record

DRAFT


STATE APPROPRIATIONS AND F&A RECOVERY

2


State Appropriations Allocation OptionsThe allocation of state appropriations may follow a range of options. Institutions frequently allocate the

majority of appropriations in a manner similar to tuition; subsidies for research and central retention are

often considered as well.

DRAFT

A retention rate of 35% - 40% would approximate central retention of FFS.

Considerations:

• If centrally-retained

appropriations fund

administrative services “off-the-

top”, which units or functions

should receive the centrally-

retained funding?

• In the event of state

appropriation cuts, how would

the reduction be allocated?

State Appropriations

Allocable Portion Earmarked Portion

0 - 40%Central Pool

0 - 10%Research Subsidy

50 - 100%Instruction & Record

80%College of Instruction

20%College of Record


(In Thousands)Revenue

Units

Support

Units

Subvention

Pool Total

Revenue

Units

Support

Units

Subvention

Pool Total

Tuition & Fee Revenue 150,000 2,000 - 152,000 150,000 2,000 - 152,000

State Funding 40,000 2,000 - 42,000 20,000 22,000 - 42,000

Other Revenue 82,000 1,000 - 83,000 82,000 1,000 - 83,000

Total Revenue 272,000 5,000 - 277,000 252,000 25,000 - 277,000

Direct Costs (240,000) (30,000) - (270,000) (240,000) (30,000) - (270,000)

Margin Before Allocations 32,000 (25,000) - 7,000 12,000 (5,000) - 7,000

Cost Allocation (25,000) 25,000 - (5,000) 5,000 -

Margin After Allocations 7,000 - - 7,000 7,000 - - 7,000

Tax Assessment 10% (27,200) - 27,200 - 11% (27,200) - 27,200 -

Margin After Tax (20,200) - 27,200 7,000 (20,200) - 27,200 7,000

Subvention Assistance 23,200 - (23,200) - 23,200 - (23,200) -

Net Change in Fund Balance 3,000 - 4,000 7,000 3,000 - 4,000 7,000

Allocate All State Funds to

Schools/Colleges Retain $20MM of State Funds - A&S

Figures for illustrative purposes only

1

2

Total funding from state

is the same in both

scenarios, but

allocation amounts vary

Variance in revenue

and cost allocations

result in differing pre-

and post-allocation

margins

Tax assessment rates

fluctuate based on

taxable revenue base

and initial subvention

pool funding

3

1

2

3

1 2 3

DRAFT

State Funding Allocation Scenarios

Net change in fund

balance is the same in

all scenarios

4 4

4


While the decision to centrally retain state appropriations or allocate them to schools and colleges does not

change the total resources available to the institution, impacts on volatility exposure, tax rates, and flexibility

should be considered.

Central Retention Allocation

Pros Cons Pros Cons

▪ Reduces size of cost

pool allocations to

primary units

▪ Reduces state

appropriations

volatility risk for

primary units

▪ Reduces

transparency with

respect to strategic

investment/

subvention pool or

A&S costs

▪ Funding for strategic

investment/

subvention or A&S

costs primarily tied to

a singular, volatile

source

▪ Aligns revenue

allocation with

generation and

activity levels

▪ Diversifies taxable

sources of revenue

funding strategic

investment/

subvention fund

▪ Increased

transparency with

respect to A&S costs

▪ Schools and colleges

have limited ability to

influence total state

appropriations

▪ More directly

exposes schools and

colleges to volatility

How do the trade-offs associated with central retention versus allocation of state appropriations align with

the guiding principles or the Steering Committee’s vision for budgeting at UCCS?

DRAFT

Central Retention v Allocation


Indirect Cost Recovery (1 of 2)

UCCS currently utilizes a funding formula for the University’s indirect cost recovery (F&A), provided below.

F&A Distribution Today (UCCS):

DRAFT

Recovered Facilities &

Administration Costs

School, College,

Center, or

Institute(s)

VCAF VCAA Library

40% 27% 25% 8%


Indirect Cost Recovery (2 of 2)

Incentive-based models often allocate 100% of all F&A revenue to the unit performing the research. Support

units originally receiving budget from F&A recovery have their unit margins (net expenditures) allocated to

primary units.

Common Incentive-based F&A Distribution:

Considerations:

• Does the common practice for F&A distribution

resonate with UCCS?

• Would allocating 100% of F&A recovery to

academic units incentivize faculty to pursue

additional research?

DRAFT

Schools & Colleges

Recovered Facilities & Administrative Costs

Central Administration

100%

Cost Pool Allocations


COST POOL ALLOCATIONS

3


The activity-level metrics are used to allocate the net expenditures of each cost pool. Fluctuations in the

activity-level metrics do not lead to corresponding fluctuations in the size of the cost pools.

Illustrative Support Unit Cost Allocation CalculationThe graphic below is an illustrative example for a Student Affairs cost pool using “Student Headcount” as

the activity-level metric to further explain how support unit costs will be allocated to primary units.

Illustrative Student Affairs Cost Pool Net

Expenditures

Student Affairs Cost Pool Net

Expenditures$15M

Illustrative Student Headcount Metric

College Headcount (HC) HC %

College A 300 15%

College B 700 35%

College C 1,000 50%

College Total 2,000 100%

Illustrative Student Affairs Cost Pool

Allocation

College B

$5.25M

(35%)

• In this particular example, the Student Affairs cost pool

would allocate $7.5K per student headcount.

• In future years, this amount will vary depending on the

approved budget of the Student Affairs cost pool.

College C

$7.5M

(50%)

College A

$2.25M

(15%)

DRAFT


The following chart outlines UCCS’ cost pools as previously discussed, along with the potential allocation metrics.

Potential Cost Pool Allocations

UCCS Cost Pool Sample Components Potential Allocation Metrics

Facilities

• Building Maintenance

• Utilities

• Grounds & Custodial

• Mailroom

• Debt Service

• Deferred Maintenance

• Net Assignable Square Footage

• Weighted Square Footage

Administration &

Finance

• Human Resources

• Budget Office

• Controller’s Office

• Central Benefits Pool

• Strategic Enrollment

• Total Direct Expenditures

• Total Headcount

• Total Revenues

Exec Leadership &

Advancement

• Chancellor’s Office

• VC Strategic Initiatives

• Intercampus Cost Alloc

• Marketing & Communications

• General Counsel

• Univ Advancement

• Contingency & Cent

Funding Pools

• Total Direct Expenditures

• Total Headcount

• Total Revenues

Information

Technology• Information Technology

• Total Headcount

• Net Assignable Square Footage

For Discussion:

• Allocation of facilities costs can help establish a $/Square Foot cost that includes custodial and routine

maintenance, debt service, and reserves for deferred maintenance. What changes in space allocation and

management structures would help facilitate fair cost allocation?

• UCCS has limited influence over the rising cost of benefits. Would allocation (but continued funding) of benefit

costs help provide transparency and clarity around the “true cost” of employees?

• The CU-mandated Intercampus Cost Allocation and contingency reserves are necessary commitments. What is

the SC perspective on an off-the-top approach to funding these versus allocating to Primary Units?

DRAFT


The following chart outlines UCCS’ cost pools as previously discussed, along with the potential allocation metrics.

Potential Cost Pool Allocations

UCCS Cost Pool Sample Components Potential Allocation Metrics

Student Success

• Athletics

• Health & Wellness

• Student Success

• Student Life

• Dean of Students

• Student FTE

• Student Headcount

Academic Affairs

• Provost’s Office

• Excel Centers

• Undergraduate Education

• Graduate School

• Faculty Resource Center

• Faculty + Student Headcount

• Faculty + Student FTE

• Total SCH Instructed

Library • Library

• Faculty + Student Headcount

• Faculty + Student FTE

• Total SCH Instructed

Research • Research Office• Research Expenditures

• Direct + Indirect G+C Revenue

For Discussion:

• Do the functions of the Graduate School, and UCCS’ research and growth ambitions, warrant establishing a

discrete Graduate School cost pool?

• Institutions use a range of methods to establish a target contribution to deferred maintenance reserves

• The CU system is also evaluating potential policies for funding maintenance reserves.

• A percentage of building value or annual depreciation can serve as an estimate.

• What information is needed to help inform discussions around enhancing deferred maintenance reserves?

DRAFT


Institutional Student AidInstitutional aid – distinct from student aid expenses incurred directly by Schools and Colleges – may be

allocated in a variety of methods but is usually treated as a contra-revenue.

Net Institutional Aid

$14MM*

Graduate Aid

$1 MM

Undergraduate

Aid

$13 MM

Proposal:

Allocated as

discount rate

against tuition

allocation

Proposal:

Follows student

enrollment

DRAFT

Source: UCCS FY19 Actuals; Financial Aid Fund Utilization Report

Passthrough student aid dollars excluded from analysis

What institutional aid allocation scenarios should be modeled? What approaches achieve fairness and

transparency?


CENTRAL FUNDING MECHANISMS


One of the most critical elements of an incentive-based budget model is the creation of a pool (or pools) of

resources to address unit-level subsidies, university priorities, revenue growth strategies, and other

strategic initiatives.

Central Funding Mechanism

Central Funding Mechanism Overview

Rationale▪ The sum of the parts is not optimal for the whole therefore the university needs the ability and

flexibility to act as one entity with respect to key initiatives

Funding

Source

▪ Central funds are centrally retained and/or generated revenues purposed for mission and strategic

investment and subvention

Fund

Principles

▪ The Strategic Initiative Pool (and/or Subvention Pool) can be a useful management tool to help

fund long-term initiatives by advancing capital, provide critical subsidies to kick-start initiatives

▪ Funding size should enable leadership to “steer,” which will ultimately benefit the university mission

as a whole

▪ Funds provided to any unit should never be viewed as an annual entitlement only as a way to kick-start

initiatives

▪ A model can use a participation fee to generate the central fund, applying a participation rate to

selected revenues. Having a diverse revenue portfolio rather than a single source allows for stability

▪ Participation fees need to ensure “neutral starting points” at implementation; thus the rate needs to

be high enough to ensure surpluses are available to fill all Revenue Unit deficits

DRAFT


There are two main approaches that can be used to create a central pool of central resources for use in

supporting Strategic Initiative Pool and Subvention.

Central Funding Development

Does the Steering Committee want to develop a central funding pool by retaining revenues, assessing a

participation fee to select revenues, or a combination of both?

Revenue Retention Participation Fee

Description▪ Select revenues are centrally retained ▪ Participation fee is assessed to all revenue

generating units

Pros

▪ Provides a direct funding mechanism

▪ Relatively simple to implement (particularly if

revenues previously were not distributed)

▪ Considers various revenue sources

▪ Potential for growing size as the institution

experiences revenue growth

Cons

▪ Revenue often limited in terms of future

growth

▪ Funding size can be volatile due to lack of

revenue diversification

▪ Revenue retention dilutes strength of

incentives created through revenue

allocation

▪ Requires diligent assessment of initial rate

▪ Perception is influenced as rate increases due

to diminishing revenues being considered

It is important to distinguish the participation “fee” or “tax” applied to revenues to create the Strategic Initiative Pool and

Subvention Fund, from the cost allocations used to fund Support Units

DRAFT


APPENDIX

© 2020 HURON CONSULTING GROUP INC. AND AFFILIATES. ALL RIGHTS RESERVED. 22 Figures for illustrative purposes only

1

2


is the same in both

scenarios, but


Variance in revenue



and post-allocation

margins


fluctuate based on



pool funding

3

1

2

3

1 2 3

DRAFT


Net change in fund


all scenarios

4 4

4


Units

Support

Units

Subvention

Pool Total

Revenue

Units

Support

Units

Subvention

Pool Total

Tuition & Fee Revenue 150,000 2,000 - 152,000 150,000 2,000 - 152,000

State Funding 40,000 2,000 - 42,000 20,000 2,000 20,000 42,000

Other Revenue 82,000 1,000 - 83,000 82,000 1,000 - 83,000

Total Revenue 272,000 5,000 - 277,000 252,000 5,000 20,000 277,000

Direct Costs (240,000) (30,000) - (270,000) (240,000) (30,000) - (270,000)

Margin Before Allocations 32,000 (25,000) - 7,000 12,000 (25,000) 20,000 7,000

Cost Allocation (25,000) 25,000 - (25,000) 25,000 - -

Margin After Allocations 7,000 - - 7,000 (13,000) - 20,000 7,000

Tax Assessment 10% (27,200) - 27,200 - 3% (7,200) 7,200 -

Margin After Tax (20,200) - 27,200 7,000 (20,200) - 27,200 7,000

Subvention Assistance 23,200 - (23,200) - 23,200 - (23,200) -

Net Change in Fund Balance 3,000 - 4,000 7,000 3,000 - 4,000 7,000


Schools/Colleges Retain $20MM of State Funds - Subvention


State Appropriations: Research SubsidyA portion of state appropriations can be allocated to support research activity. The difference between an

institution’s calculated indirect research costs and effective recovery rate can help guide an initial

subsidy estimation.

DRAFT

46%44%

20%

2%

24%

0%

10%

20%

30%

40%

50%

Calculated Negotiated Effective (Avg.)

FY19 Indirect Cost Recovery Rates Calculated Indirect Cost Recovery Rate 46.4%

Negotiated Indirect Cost Recovery Rate 44.0%

FY19 F&A Recovery $1,221,031

FY19 G&C Direct Expenses $6,234,439

FY19 F&A Effective Rate 19.6%

Target Subsidy (Calculated - Effective) 26.8%

Subsidy Value (Target * G&C Dir. Exp) $1,672,996

Allocable State Appropriations $27,900,000

% of State Approp 6%

Source: UCCS FY19 Actuals


State Appropriations: Allocations

Introducing a central retention of state appropriations reduces the total amount allocable to schools and

colleges, but also reduces the administrative unit margins or subvention fund tax rates.

DRAFT

$11,160,000 40%

$1,674,000 6%

$12,052,800 43%

$3,013,200 11%

$15,066,000 54%

Illustrative FY19 State Appropriations Allocation(Assumes 80/20 Split on Instruction/Record)

Central Pool Research Subsidy Allocated to College of Instruction Allocated to College of Record

How could state appropriation allocation rules align with and incentivize outcomes that are related to the

proposed state performance funding model?

Source: UCCS FY19 Actuals


State Appropriations: Allocation BenchmarkingHuron has helped many other institutions determine a research subsidization target. The institution’s

mission, research portfolio, and growth strategy heavily influence these calculations.

DRAFT

Source: Internal Huron Data

100%

100%

Follow Research Share

+ Encourages mission-based activities

+ Recognizes the need to subsidize

research

- Must consider legislative intent

- Increases dependency on tuition

revenue

0%

Follow Tuition Allocation

+ Promotes instruction and enrollment

activities

+ Often aligns with legislative intent

- Potential imbalance in funding model

- Increases risk for research portfolio

0%

Tuition

Research

Distribution of State Appropriations

50/50 56/44 64/36 88/12

University F

Limited Research

University A

Medical School

80/20

University E

Medium Research

University C

Research-Intensive

University B

Research-Intensive

77/23

University D

Medium Research


State Appropriations: COF & FFS

During the last SC meeting, central retention of a portion of state appropriations was discussed, along

with allocations to support research, instruction, and enrollment activities.

DRAFT

State appropriations comprise Colorado Opportunity Fund and Fee-for-Service revenues. While the split is

volatile on a year-to-year basis, the portion derived from Fee for Service has ranged from 32% - 40%.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

$0

$5

$10

$15

$20

$25

$30

$35

$40

FY16 FY17 FY18 FY19 FY20

FFS

as %

of

Stat

e A

pp

rop

Stat

e A

pp

rop

riat

ion

s ($

MM

s)

Colorado Opportunity Fund & Fee-for-Service

COF FFS FFS %

Source: University of Colorado Current Funds Budgets

FY16 – 19 End of Year June Estimates; FY20 Original Budget Estimate


Revised PrinciplesTheme Summary Principle Interpretation

Alignment with

Mission

▪ The budget model should align with the core

mission and Strategic Plan and represent

institutional values.

▪ Connects with broad mission areas

▪ Reflects stakeholder input

Financial Authority,

Responsibility, &

Accountability

▪ The budget model should enable and

encourage budget management

responsibility and accountability across

units.

▪ Provides rewards for financial stewardship

▪ Decentralizes responsibility for resource

management

Transparency &

Trust

▪ The budget model and resource allocation

process should be transparent, offer

consistent communications, and foster

collaboration to instill trust between

decision-makers and stakeholders.

▪ Offers accessible data and communicates

rationale for decisions

▪ Transparency is needed in the budget

model development, implementation, and

operation

Equitable Resource

Allocation

▪ The budget model should provide an

equitable, mission driven, opportunity for

resources to be allocated across units.

▪ Provides adequate resources for both

primary and support units

▪ Sufficiently rewards units for generating

their own revenues and containing costs

DRAFT


Theme Draft Summary Principle Interpretation

Role of Support

Units

▪ The budget model should encourage growth

of net resources while also recognizing

the role of support units in promoting

student success and other mission-critical

outcomes.

▪ Recognizes need for adequately funded

central support services

▪ Creates multiple avenues of clear and

consistent communication among units

Clear & Consistent

Decision-making

▪ The budget model should incorporate

improved infrastructure and data-informed

decision making, providing an

understandable link between resource

allocation and revenue generation.

▪ Allows for reassessment of resource

allocation in future years

▪ Creates a fair, easily-understood set of

guidelines by which units are evaluated

Entrepreneurship &

Innovation

▪ The budget model should encourage

innovative practices while ensuring that

the necessary budget allocation to

existing core and general education are

sustained.

▪ Emphasizes ways to effectively use

resources

▪ Creates opportunities for new revenue

generation

Revised Principles

DRAFT



Units

Support

Units

Subvention

Pool Total

Revenue

Units

Support

Units

Subvention

Pool Total

Revenue

Units

Support

Units

Subvention

Pool Total

Tuition & Fee Revenue 150,000 2,000 - 152,000 150,000 2,000 - 152,000 150,000 2,000 - 152,000

State Funding 40,000 2,000 - 42,000 20,000 22,000 - 42,000 20,000 2,000 20,000 42,000

Other Revenue 82,000 1,000 - 83,000 82,000 1,000 - 83,000 82,000 1,000 - 83,000

Total Revenue 272,000 5,000 - 277,000 252,000 25,000 - 277,000 252,000 5,000 20,000 277,000

Direct Costs (240,000) (30,000) - (270,000) (240,000) (30,000) - (270,000) (240,000) (30,000) - (270,000)

Margin Before Allocations 32,000 (25,000) - 7,000 12,000 (5,000) - 7,000 12,000 (25,000) 20,000 7,000

Cost Allocation (25,000) 25,000 - (5,000) 5,000 - (25,000) 25,000 - -

Margin After Allocations 7,000 - - 7,000 7,000 - - 7,000 (13,000) - 20,000 7,000

Tax Assessment 10% (27,200) - 27,200 - 11% (27,200) - 27,200 - 3% (7,200) 7,200 -

Margin After Tax (20,200) - 27,200 7,000 (20,200) - 27,200 7,000 (20,200) - 27,200 7,000

Subvention Assistance 23,200 - (23,200) - 23,200 - (23,200) - 23,200 - (23,200) -

Net Change in Fund Balance 3,000 - 4,000 7,000 3,000 - 4,000 7,000 3,000 - 4,000 7,000


Schools/Colleges Retain $20MM of State Funds - A&S Retain $20MM of State Funds - Subvention

Figures for illustrative purposes only

1

2


is the same in both

scenarios, but


Variance in revenue



and post-allocation

margins


fluctuate based on



pool funding

3

1

2

3

1 2 3

DRAFT


Net change in fund


all scenarios

4 4

4


The below example details how a cost pool allocation would work in practice – each allocation would

follow the same general formula.

Illustrative Cost Pool Allocation

Illustrative Allocation: Square Footage (SQFT)

Universities often allocate centrally-managed facility costs to primary units based on square footage, as it best depicts the

fluctuation of expenditures for the given unit (economic reality). The allocation formula is as follows1:

( )

−=

nnn SUSU

PU

PU

PU esExpenditurRevenuesSQFT

SQFTAllocation

n all of Sum

n

Primary Unit’s share of

square feet

Support Unit’s margin

or (net expenditures)

1 Allocation Formula Notes:

PU = Primary Unit; SU = Support Unit

For PUn, n represents each individual primary unit (academic units, centers & institutes, auxiliaries)

DRAFT


UCCS FY19 Actuals Funds Flow

DRAFT

Source: UCCS FY19 Actuals. Numbers may not sum to totals due to rounding

Admin Unit Expenses include central benefits, depreciation, intercampus cost

allocations, and other centrally-managed expense pools

Tuition &

Fees

$146.5M

(57.9%)

Institutional

Student Aid

($17.0M)

(-6.7%)

State

Approps.

$30.8M

(12.2%)

Grants &

Contracts

(incl Fin Aid)

$33.2M

(13.1%)

Auxiliaries

$34.5M

(13.6%)

Gifts

$8.9M

(3.5%)

Total

Revenues:

$253.3M

Central Pool

$138.3M (54.5%)

Colleges / Centers / Institutes

$18.4M (7.2%)

Admin. Units

$31.2M (12.3%)

Auxiliaries

$39.7M (15.7%)

$124.4M (85.0%)

$ - (0%)

$ - (0%)

$ - (0%)

$0.1M (0.5%)

$4.4M (3.0%)

$ - (0%)

$6.9M (20.7%)

$0.4M (1.3%)

$3.7M (41.6%)

$3.0M (18.5%)

$12.8M (8.7%)

$ - (0%)

$0.6M (1.8%)

$0.9M (2.6%)

$4.3M (48.3%)

$12.6M (77.1%)

$4.8M (3.3%)

$ - (0%)

$0.2M (0.5%)

$33.2M (96.1%)

$0.9M (10.1%)

$0.6 (3.7%)

Pass Through

$25.6M (10.1%)

$ - (0%)

$ - (0%)

$25.6M (77.0%)

$ - (0%)

$ - (0%)

$0.0M (0.1%)

$30.8M (100%) $ - (0%) $ - (0%) $ - (0%) $ - (0%)

Colleges / Centers / Institutes Admin. Units Auxiliaries Pass Through

$68.4M (27.8%) $113.4M (46.1%) $38.7M (15.7%) $25.5M (10.4%)

Total Expenses, Transfers, &

Other Uses: $246.1M

Misc.

$16.3M

(6.4%)

($17.0M) (100%)

Total Expenses/Transfers


Allocation of “subpools” based on residency or weighting of credit hours will increase complexity and may

heighten model sensitivity. Incorporation of additional data will change preliminary share calculations.

Preliminary Tuition Allocation SensitivitySignificant variance in the per-School/College share of instructed v enrolled credit hours increases the

model’s sensitivity to changing the allocation split. A preliminary review indicates moderate sensitivity for

Undergraduate Tuition and minimal sensitivity for Graduate Tuition.

DRAFT

Preliminary Fall 2018*

Business EducationEngineering &

Applied ScienceLetters, Arts, &

SciencesNursing &

Health SciencesPublic Affairs

UG - Instructed Credit Hours Share

11% 4% 9% 67% 6% 3%

UG - Enrolled Credit Hours Share

13% 4% 14% 54% 10% 5%

Grad - Instructed Credit Hours Share

17% 31% 11% 15% 16% 9%

Grad - Enrolled Credit Hours Share

17% 32% 11% 15% 16% 9%

*Model to base off Academic Year 2019 or multi-year average

Subtotals may not sum to 100% due to rounding Source: UCCS OIR


The below illustration demonstrates how revenues and expenses – direct and allocated – flow through a model, resulting in the allocation of centrally-pooled revenue and A&S unit margins.

Illustrative Allocations

College 1 College 2 College 3 Central Pool Support Units Total

Direct Revenue $ 1,000 $ 2,000 $ 3,000 $ 10,000 50 $ 16,050

Allocated Revenue 2,500 1,500 6,000 (10,000) -

Total Revenue 3,500 3,500 9,000 - 50 16,050

Direct Expenses 2,000 1,500 4,500 - 7,000 15,000

Pre-Allocation Margin 1,500 2,000 4,500 - (6,950) 1,050

Allocation of Support Unit Margin

(1,600) (1,550) (3,800) - 6,950 -

Post-Allocation Margin $ (100) $ 450 $ 700 $ - $ - $ 1,050

Under this illustrative model, Support Unit revenues are netted against Support Unit expenses to reduce

the Support Unit margin allocable to Colleges.

DRAFT

budget model redesign steering committee …...customizations –reflects model tweaks to address...

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