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