April, 2005

Texas Public University Cost Study

April, 2005

Charge

• To develop a defensible and acceptable “Instruction and Operations Formula” Matrix Table

• Sub-Charge – Develop discipline and level comparative analysis (i.e. show how much it cost schools to provide different types and levels of education)

April, 2005

Instruction & Operations Formula Funding

• ~60% of State Appropriation to Universities provided via I&O Formula

• Current Formula:– Rate ($51.25) * Relative Weight * SCH

– Relative Weights & SCH by Level & Discipline

• Relative Weight are Average Statewide Cost per Level & Discipline– “Relative” to LD-UG Liberal Arts = 1.00

April, 2005

University Cost Study Methodology

• Devise an acceptable approach to a cost study that would:– Identify appropriate cost categories– Reconcile to the Institutions’ Annual Financial

Reports– Allocate costs in a fair and equitable manner

back to level and discipline

April, 2005

Five Cost Centers Plus Capital Outlay (All Current Funds)

• Instruction (aka “Faculty Salaries”)• Academic Support• Institutional Support• Student Services• Research (aka “Departmental Operating

Expenses”)• Annual, undepreciated Capital Expense for

each of the five cost centers

April, 2005

Faculty Salaries

• Every institution provided the following information for each faculty member:– Salary (100%) only for faculty actually teaching

(includes TA’s that are teaching) – Teaching Load Credit*, or % of effort, each faculty

member receives for each course taught– By Discipline and Level of Course (e.g. Undergraduate

Liberal Arts, Master’s in Science, Doctoral Fine Arts, Special Professional in Law)

* TLC is Institution-Specific

April, 2005

Academic Support and Capitalized Equipment

• Includes support services for Instruction & Research, Academic Administration (Deans), Libraries, Museums

• Reconciled to the institution’s AFR• Allocated to Level & Discipline w/ results

of Faculty Salary Distribution• Include undepreciated capital outlay• Use all sources of funds

April, 2005

Institutional Support

• Includes Central Executive Management (President), Fiscal Operations

• Reconciled to the institution’s AFR

• Allocated to Level using Headcount and to Discipline using unweighted SCH

• Include undepreciated capital outlay

• Use all sources of funds

April, 2005

Student Services

• Includes Admissions and Registrars Office

• Reconciled to the institution’s AFR

• Allocated to Level using Headcount and to Discipline using unweighted SCH

• Include undepreciated capital outlay

• Use all sources of funds

April, 2005

Departmental Operation Expense to Include Research

• Includes Research Expenses, all elements of Instruction NOT captured in Faculty Salaries

• Charge to an I&O academic discipline using the institution’s departmental budget designations and institutional judgment

• Allocation is Institution Specific using SCH, Faculty Salaries, or combination

April, 2005

Summary

Using these steps each institution will end up with:

– All of their non-infrastructure E&G related operating costs allocated to their academic disciplines and levels of instruction

– All their semester credit hours allocated to their academic disciplines

April, 2005

Final Steps • Sum the five cost centers by level and

discipline for all institutions

• Divide total costs allocated to each academic discipline and level of instruction by the corresponding SCH to get “Cost per SCH”, which are the calculated weights for the I&O matrix

April, 2005

Discipline and Level Analysis

• Allows for comparisons between institutions

– Total Costs Basis

– Discipline Basis

– Level Basis