Fiscal Strength
Finding the balance
at UMass Boston
Fiscal Strength
operating margin2.5% actual FY122% target
financial cushion 28.2% actual FY12>20% target
return on net assets8.2% actual FY125% target
debt ratio5% actual FY128% threshold
endowment/FTE$4,711 actual FY12$7,669 UMass avg
Fiscal Strength
operating margin2.5% actual FY122% target
financial cushion 28.2% actual FY12>20% target
return on net assets8.2% actual FY125% target
debt ratio5% actual FY128% threshold
endowment/FTE$4,711 actual FY12$7,669 UMass avg
…operating margin should exclude market value
adjustments for investm
ents
…we should be using interest
expense not interest paid and we
should consider … a revised
calculation which adds in principal
payments to the expenses and
takes out depreciation
Start with Income Before Other Revenues, Expenses, Gains &
losses
Subtract the value of the Build America Bond subsidy
Subtract the amount of interest expense that was capitalized
Add back depreciation
Subtract the amount of principal payments made
Subtract transfers to Quasi Endowment (which will move up
to Restricted Expendable net assets)
Subtract transfers to Plant in support of the Master Plan
Fiscal Strength
Revenue diversityEnrollmentStudent feesState support
Grants (federal, state)Other (private, ESS, auxiliaries)
Financial managementExpenditure control
ReportingMulti-year planning
Analysis
Asset basePhysical infrastructureDeferred maintenance
IT infrastructure
Financial flexibilityEndowment (investments)
Reserves (net assets)Debt
Fulfilling the Promise
Fiscal Strength
EnrollmentStudent fees
State supportGrants (federal, state)
Other (ESS, Auxiliaries)
Expenditure controlReporting
Multi-year planningAnalysis
Physical infrastructureDeferred maintenance
IT infrastructure
EndowmentInvestments
Reserves
Debt
Revenue diversitybreadth of unique revenue streams
Enrollment Federal support• volatility • federal financial aid• in- or out-of-state • federal grants• undergraduate, graduate, PhD
Student fees Private fund-raising• tuition policy • capital campaign(s)• mandatory fees • gifts• differential fees • endowment• waiver policies• public/BoT/legislative interest
State support Other• annual appropriation • auxiliary services• state financial aid • ESS• state ISAs, contracts, grants
Enrollment (FTE)
Student fees
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20208,000
9,000
10,000
11,000
12,000
13,000
14,000
FY12 vs FY05 = 48%Avg annual growth = 5%
Asset baseinvestment in physical assets
Physical infrastructure (size, composition, quality)• sq ft inventory• how is space used (classrooms, conference rooms)• quality of spaces (expectations, stds or peers)
Deferred maintenance• current conditions• mechanical systems vs fluff & buff (painting, carpet)• proactive vs reactive
IT infrastructure• changing technology• UITS
Financial flexibilityability to respond to external events
Endowment (investments) Governance• local • external (Presidents Office, State)• quasi • permanent
Reserves• current level • comparison to peers
Debt• current level, expected growth• financing (availability, cost)
Debt
Expense managementdemonstrate effective cost management & long-term planning
Expenditure control Analysis• actual to budget results • depth of understanding • growth trends • evidence informs plans• comparison to peers • linked to outcomes• inform actions
Reporting• integrity of data • systems that support customers • mgmt reporting that informs decision
Multi-year reporting• capital plan • breadth of understanding • enrollment planning • decision horizon
• integrity of modeling
Expense GrowthFY13 = balanced budget
Fiscal Strength
EnrollmentStudent fees
State supportGrants (federal, state)
Other (ESS, Auxiliaries)
Expenditure controlReporting
Multi-year planningAnalysis
Physical infrastructureDeferred maintenance
IT infrastructure
EndowmentInvestments
Reserves
Debt
Fiscal Strength
EnrollmentStudent fees
State supportGrants (federal, state)
Other (ESS, Auxiliaries)
Expenditure controlReporting
Multi-year planningAnalysis
Physical infrastructureDeferred maintenance
IT infrastructure
InvestmentsReserves
Debt
Planning for FY14
Expenditure controlfund consolidationchanges to budget process
Reportingpersonnel vs operatingvacancy factorexpanded mgmt reportingmore education, training options
Multi-year planninggreater involvementmake it meaningful
Analysisexpanded partnerships btw academic & support areasissue & policy papers
Fiscal Strength
Revenue diversityEnrollmentStudent feesState support
Grants (federal, state)Other (private, ESS, auxiliaries)
Financial managementExpenditure control
ReportingMulti-year planning
Analysis
Asset basePhysical infrastructureDeferred maintenance
IT infrastructure
Financial flexibilityEndowment
ReservesDebt