Budget Manual UC Santa Barbarabap.ucsb.edu/budget/budget.manual.pdf · This Budget Manual is a...
Transcript of Budget Manual UC Santa Barbarabap.ucsb.edu/budget/budget.manual.pdf · This Budget Manual is a...
BudgetManualUCSantaBarbara
FinanceandResourceManagement
OfficeofBudgetandPlanningMay2017
ThisBudgetManualisasummaryofpolicies,guidelines,andgeneralinformationusedbyUCSantaBarbarainthedevelopmentandongoingadministrationofthecampusbudget,particularlyasitappliestocorefunds.TheManualwasdevelopedtoensurethatpolicies,guidelines,practices,uses,andprograms,bothsystemwideandoncampus,arewellunderstoodandconsistentlyapplied.TheManualsummarizes,byprimaryfundsource,someofthefundamentalagreements,processesandpracticesassociatedwiththeacquisition,use,andallocationofthesefunds.TheManualcomplementsUniversitypolicies,guidelines,andrelateddocuments,includingbutnotlimitedto:
● ThePoliciesandStandingOrdersoftheUniversityofCaliforniaBoardofRegents(availableatregents.universityofcalifornia.edu)
● PresidentialPolicies(availableatpolicy.ucop.edu)
● TheAccountingManual(availableatpolicy.ucop.edu/manuals/accounting-manual.html)
● BusinessandFinanceBulletins(availableathttp://policy.ucop.edu/manuals/business-and-finance-bulletins.html)
● PeriodicguidanceissuedbytheOfficeofthePresidentonrelatedtopics,
includingbutnotlimitedtoguidanceprovidedinannualcampusbudgetallocationletters;and
● Policiesandguidelinesdeveloped,asneeded,bythecampus.
Itshouldberememberedthatthebudgetprocessesarecomplexanddependonannualpriorities,consultation,negotiations,commitments,andagreementsthatageneralizedpresentationofthisnaturecannotfullydescribe.QuestionsabouttheManualshouldbedirectedtotheUCSantaBarbaraOfficeofBudgetandPlanning.
TableofContentsChapter Topic Page
1 BudgetPlanDevelopment 1
2 BudgetOverview 5
3 CostDrivers 8
4 RevenueChanges&Projections 12
5 UCSantaBarbaraAllocationFramework 14
6 UCOPAllocationProcess 16
7 StateGeneralFunds 23
8 UCGeneralFunds 25
9 StudentFees 26
10 IndirectCostRecovery 31
11 CampusAssessmentsandTaxes 37
12 GiftsandEndowments 44
13 InterestonInvestments 47
14 IncomeandRecharge 48
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Appendix
FinancialAid 52
1 CommonCampusBudgetandFinancialTerms 56
2 FunctionDescriptions 61
3 FundSourceInformation 64
4 Sub-AccountDescriptions 67
5 SalaryandBenefitRelatedTerms 68
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Chapter1BudgetPlanDevelopment-ContextfortheFuture
UCSantaBarbaraisalargeandcomplexorganizationwithannualexpensesexceeding$1billion.Theexpensesarefundedfrommanydifferentsources(state,studentfees,federalgrants,etc.)andover4,400differentfundswithmorethan22,000account-fundcombinations.Almostone-thirdoftheannualexpensesarefundedfrom“non-budgeted”or“extramuralfunds”meaningthattheyarenotincludedinthecampuspermanentbudget.Mostofthesefundsarerestrictedandsupportresearch,financialaid,ordonordirectedprojectsandprograms.Theremainingtwo-thirdsare“budgetedfunds”andthefocusofthisdocument.Thesearefundsthatareexpectedtocontinuefromyeartoyear,supportingtheongoingactivitiesofthecampus.Foreachfundingsourcethereareagreementsandpracticesassociatedwiththeacquisition,distributionanduseofthefunds.Somearecodifiedintolaw,othersrepresentagreementsthathavebeenmadeandmodifiedovertime,andothersareguidedbyUniversitypolicy.AllagreementscarryanobligationtomakegoodonthetrustplacedintheUniversityandtocarryoutcertainagreed-uponactivitiesforthepublicgood.Forexample,eventhoughtheUniversityhasconstitutionalautonomy,givingitflexibilityinthewaysitcanuseStatefundstosupportitsprograms,theUniversityneedstosustainitscredibilitywiththosewhoallocateStatemoniestoUC,andmustthereforeliveuptoagreementsmadeduringbudgetnegotiationsandbeaccountablebothfortheproperuseoffundsandforexpectedoutcomes.StrategicAcademicPlanIn2007theSantaBarbaracampuspublishedtheStrategicAcademicPlantoupdateitsvisionfortheacademicprogramandguidecampustrajectoryforthecomingdecades.TheStrategicAcademicPlanfocusedonresourceallocationandmanagedgrowth.Inparticular,theplanidentifiedthefollowingtwoprinciplestoguidethecampusdirectionforward:
� Aframeworkforresourceallocationthatincludesdecisionmakingstrategiesaround:o BalancedCommitmentsandSelectedInvestmentso BuildingOutstandingDepartmentso ProfessionalSchoolso Diversityo InterdisciplinaryThemeso CriteriaforThoughtfulChoices
� Amanagedenrollmentgrowthplantoassureoptimumacademicandintellectualdimensionsoftheuniversity.Theplanidentifiesafutureenrollmentof25,000on-campusstudentsduringthetraditionalacademicyear(fall,winter,andspringquarters).Theplanoutlinesgrowthgoalswithconsiderationofboththestate/communitycontextandtheacademiccontext
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o Themanagedgrowthplanidentifiedgoalsforfacultygrowthandrenewalo Staffgrowthandrenewalo Housingforfaculty,staff,andstudentso Studentsupporttoincreasegraduateenrollmentto17%oftotalenrollmento Minimizeimpactoncommunityresourceswithmodest(1%)annualenrollment
growtho ResourcemanagementbymeansofanewLongRangeDevelopmentPlan
LongRangeDevelopmentPlanFollowingthepublicationoftheStrategicAcademicPlan,the2010LongRangeDevelopmentPlan(LRDP)wasdevelopedtoprovidethephysicalplanningparameterstomeetthegoalsputforwardintheStrategicAcademicPlan.KeyelementsoftheLRDPincludethefollowing:
� Anenrollmentgrowthtargetofanadditional5,000studentsbytheyear2025equatingtoatotalenrollmentof25,000
� Identificationofcampusbuildingsitesproviding1.8MnewASFcapacityforInstruction,Research,andSupportSpace
� 5,000newstudenthousingbedspaces� 1,874additionalfacultyandstaffhousingunits� 5-8acresofadditionalrecreationspace� 3,650additionalparkingspacesresultinginatotalparkingcapacityof14,230spaces
2010UniversityofCalifornia,SantaBarbaraLongRangeDevelopmentPlanMitigationImplementationandSettlementAgreement.AsaresultoftheLRDPplanningprocess,thecampusidentifiedagoaltoprovidehousingto50%oftheplannedenrollment.SubsequentnegotiationsbetweentheUniversityandtheCountyofSantaBarbaraandtheCityofGoletaresultedinthe2010UniversityofCalifornia,SantaBarbaraLongRangeDevelopmentPlanMitigationImplementationandSettlementAgreement.Theagreementidentifiedcampusgrowth-relatedcommitmentstothecommunityintheareasofEnrollmentManagement,Housing,TrafficImpacts,andPublicSafetyImpacts.
� Mostnotably,theagreementstipulatesincreasedinventoryofstudenthousingindirectconnectionwithenrollmentgrowth.AstheAgreementfurthermandatesthatnewhousingcanonlybeprovidedthroughconstructionofnewstudenthousingonUniversityland,the“capital”optionistheonlypossibleoptiontoconsider.Thecampuscannotsolvetheproblemthroughleaseorpurchaseofoff-sitehousing.Thus,constructionofnewstudenthousingoncampuslandisnecessarytomeetcurrentenrollmentlevelsandtoaddressplannednewgrowth.
UniversityofCaliforniaSantaBarbaraCoordinatingCommitteeonBudgetStrategy(CCBS)
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TheCCBSisanadvisorycommitteetotheChancelloronbudgetissuesandwasoriginallyestablishedinFebruary2004.ItwasreactivatedinMarch2008inresponsetoanotherroundofstatebudgetcutsandnowcontinuesasanongoingadvisorycommittee.Membership(21)includessenioradministrators(5),academicsenate(3),faculty(4),deans(3),students(3),andstaff(3).TheCoordinatingCommitteeonBudgetStrategy(CCBS)guidesthecampusbudgetplanningprocess.Thechargeofthecommitteeisto“developstrategiestoprotectacademicquality,aswellasstudentaccess,thatwehavestrivedsohardtoachieve”.ThegeneralresponsibilitiesoftheCCBSareasfollows:
� Helpguidethecampusbudgetplanningprocess� Insureanopenandinformativeprocesstoshareinformationrelevanttothebudget
processandprovideopportunityforfeedback� Developprinciplesandguidelinestohelpfacethechallengeofbudgetreductionsin
theneartermandtoaccomplishfiscalstabilityinthelongterm� Reviewandanalyzefundingoptionsforcampusimplementation� Recommendannualfundingplanbasedonavailablerevenuesandcampuspriorities
Examplesofrecommendationsthathavebeenimplementedand/orapproved:
� Budgetplanningprinciplesusedtoguidethebudgetdevelopmentprocess� Budgetreductiontargetsbycontrolpoint(highertargetsforadministrativeunits
andmuchlowertargetsforinstructionalunits)� Increasesinassessmentstonon-statefundedunitstogenerateadditionalfundsto
helpoffsetcutstocorefundedunits–NSFAS,ICRrate,gifttax� Annualfundingplanbasedonavailableresourcesandcampusprogramneeds� Frameworkfordistributionofnewresources� ImplementationofTechnologyInfrastructureFee(TIF)tohelpfundincreased
ongoinginvestmentintechnology� Distributionmethodologytoensurethatallcampusunitsparticipateinthe
fundingoftheUCOPsupportassessment
BudgetPlanningPrinciples
ThefollowingplanningprincipleswereusedasgeneralstatementstohelpguidetheUCSBcampusthroughthebudgetplanningprocessassociatedwiththemanyyearsofreductionsinStatefunding:
(I)StrategicSolutions-Budgetreductionsshouldbeimplementedstrategically,notacrossthe
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board,inamannerthatwillmaintainthefocusonthecampusacademicmission.
(2) Priorities-Thecampusshouldmakechangestothebudgettoreflectpriorities,onboththespendingandrevenueside.Thecampusshouldattempttodeterminewhichprogramsaremostimportantandstrivetominimizethebudget'simpactonhigherpriorityprogramsandservices.
(3) RevenueConsiderations-Decisionsaboutcostreductionsneedtoconsidertheimpactonrevenuegeneration,aswellaslong-termcapitalandoperatingcostimpacts.
(4) RecruitmentandRetention-Duringatimeofcontraction,budgetreductionstrategiesshouldstrivetoachieveadiverseandhighqualitystudentbodycommensuratewithstatefunding,andtoretainadiverseandhighqualityfacultyandstaffworkforcecommensuratewiththesizeofthestudentbody.
(5) StrategicInvestments-Ataminimum,strategicinvestmentswillcontinuetobemade.Theseinvestmentsmayrequireslightlylargerbudgetcutsinotherareas,butarenecessarytorespondtoclear,existingneedsandtostrategicallypositionthecampusforthefuture.
(6) Efficiencies-Currentprocessesandproceduresshouldbestreamlinedtoeliminateanyduplicatedorunnecessaryservicestohelpreduceexpendituresandmitigatestaffworkloadimpacts.
(7) StaffingLayoffs-Everyeffortshouldbemadetominimizelayoffsbytakingadvantageofnormalattrition,plannedretirements,andvoluntaryreductions.
(8) Self-SupportingDepartments-Rechargeunitsarenotexemptfromthebudgetreductionprocess.Onlyinverylimitedandexceptionalcircumstancesshouldrateincreasesbeapproved.Inaddition,rechargeunitsmaybeaskedtoimplementratereductionsthatarecomparabletothereductionsthatmayberequiredofstateandorstudentfeefundedactivities.
ThePlanningPrinciplesarecontinuallyunderreviewandaremodifiedperiodicallytoprovidegeneralguidanceasthefundingenvironmentchanges.
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Chapter2BudgetOverview–TheBigBudgetPicture
Thissectionprovidesinoutlineformanoverviewofthekeybudgetconceptsandplanningparametersusedduringthedevelopmentofthecampusbudget.
1) Revenuea. PrimarycorerevenuesourcesareStateFunds,UCGeneralFunds,andMandatory
StudentFees(tuitionandstudentservicesfee)b. UCRegentssetthefeelevelfortuition,studentservices,andsupplementnon-resident
tuition.c. StatefundsfortheUniversityofCaliforniaareapprovedaspartoftheStatebudget
process.d. TheUCOfficeofthePresidentmakesallocationsofstatefundstoeachcampus.
AllocationsprimarilytakeintoaccountfundingformulasagreedonaspartoftherebenchingprocessfirstimplementedinFY2012-13.Inaddition,theUCPresidentdoesmakesomedirectallocationstoanindividualcampusforspecificprograms.
2) Enrollment
a. Muchofcampusbudgetplanningisdrivenbyenrollmentb. Enrollmenttoincreaseto25,000perLRDPoverthenextdecade(plusorminus)c. FuturePlanningDecisions:
i. AnnualEnrollmentGrowthii. DistributionofGrowth
1. UndergraduateResidents2. UndergraduateNon-Residents3. GraduateResidents4. GraduateNon-Residents5. GraduateProfessionals
iii. Decisionsimpactfuturefeerevenueandexpenditureprojectionsiv. Decisionsimpactfuturestateenrollmentgrowthfunding
3) FacultyFTE
a. Drivenbyenrollmentgrowth.b. 1newfacultyFTEperincreaseof18.7students(FTE)c. Budgetplanningprocessidentifiesthenumberofnewpositionsandthefundingfor
salaryandbenefitsthatwillneedtobeset-aside.d. Budgetplanningprocessdoesnotidentifyhowthepositionswillbeallocated.The
allocationofthepositionsishandledthroughtheEVC’sOffice.e. ForFY2015-16,2016-17,and2017-18atleast25newfacultyFTEpositionswillbe
allocatedduringeachyear.Thisdoesnotincludethosepositionstobefilledduetoretirements,etc.
4) TeachingAssistantPositions
a. Drivenbyenrollmentgrowthb. 1newT.A.perincreaseof44.0undergraduatestudents.
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c. Budgetplanningprocessidentifiesthenumberofnewpositionsandthenecessaryfundingforsalaryandbenefitsthatwillneedtobeset-aside.
d. Budgetplanningprocessdoesnotidentifyhowthepositionswillbedistributed.TheallocationofpositionsishandledthroughtheEVC’sOffice.
5) FinancialAid
a. Drivenbyenrollmentandsubsequentrevenueestimates.b. Perpolicy33%ofnetnewtuitionandstudentservicefeeincreasegoesto
undergraduatestudentfinancialaid.Thisamountstoapproximately28.2%ofthetotalfeerevenuegeneratedbyundergraduatefees.
c. Perpolicy50%ofnetnewtuitionandstudentservicefeeincreasegoestograduatestudentfinancialaid.Thisamountstoapproximately48%ofthetotalfeerevenuegeneratedbygraduatefees.
d. Perpolicy33%ofprofessionalschoolfees(PDST)goestowardsfinancialaidforgraduateprofessionalstudents.Itistheresponsibilityofthespecificprogramtoset-asidethisamountanddistributethefundstothestudents.
6) OperationsandMaintenanceofPlantAssociatedwithNewSpace
a. Asnewspaceisaddedfundingisprovidedpermaintainedgrosssquarefoottofundutilitiesandmaintenanceassociatedwiththenewspace.Thisisbasedonahistoricalstateallocationformulafornewspace.TheactualamountperMGSFtobefundedisadjustedannuallybythecampusbudgetoffice.
b. FundingisprovidedtoFacilityManagementasanaugmentationtotheiroverallbudgetandisnotrestrictedtouseonaspecificbuilding.
c. Fundingprovidedforutilitiesisrestrictedtoutilityusage.Shouldtherebeasurplusatyear-endthefundingcanbeusedforapprovedenergyrelatedprojects.Theuseofthesefundsmustbeapprovedbythecampusbudgetofficebeforefundsarecommittedandspent.
7) SalaryandBenefitCostIncreases
a. SalariesandBenefitCostIncreasesareprimarilytheresultoftheprogramsapprovedbytheRegentsand/ortheOfficeofthePresidentandimplementedatthecampus.Examplesinclude:
i. FacultySalaryProgramii. NegotiationswithRepresentedEmployeesiii. Salaryprogramfornon-representedemployeesiv. Benefits(retirement,medical,etc.)
8) Other
a. Approximately75to80%ofnewrevenuesarenormallyrequiredtocovertheincreasedcostsoftheitemspreviouslylisted.Theallocationofanyremainingfundsisbasedoncampusdecisionsonitemssuchas:
i. Facultyrecruitmentandretentionii. Graduatestudentsupportiii. Deferredmaintenanceiv. Staffsupportv. Equipmentreplacementvi. Classroomrenovationandrenewal
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vii. Costincreases(Utilities,Libraryperiodicals)viii. Identifiedworkloadneeds
b. Thisistheareaofthebudgetdevelopmentprocessthattypicallyrequiresthemostdiscussion,review,andconsultation.
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Chapter3CostDrivers
AmongtheresponsibilitiesoftheUCSantaBarbaraOfficeofBudgetandPlanningisthedevelopmentoftheannualBudgetPlanforcore-fundedactivities.TheBudgetPlanisdevelopedinconsultationwiththeCoordinatingCommitteeonBudgetStrategy(CCBS)andisinalignmentwiththecampusprioritiesfortheupcomingfiscalyearandinfullconsiderationofanticipatedcostdrivers,operationalefficiencies,andrevenuesources.Aftercampusconsultation,review,andapprovaltheBudgetPlanisimplementedandfundingistransferredtocampuscontrolpointsanddepartmentsforthoseprojects/programsidentifiedintheplan.PrimarycostdriversincludedintheBudgetPlanare:
I. EnrollmentChanges-TheBudgetPlanreflectsanticipatedchangesincampusenrollmentplansforundergraduateandgraduateresidentandnon-residentstudents,aswellastheanticipatedchangesincosts(instruction,studentservices,financialaid,etc.).
II. MandatoryCostIncreases-Annuallythecampusfacesavarietyof
mandatorycost increasesthatneedtobereflectedintheBudgetPlan.Theseinclude,butarenotlimitedto,thefollowing:
A. Contractuallycommittedcompensationincreases-Collective
bargainingagreementsbetweentheUniversityandlaborunionsincludestipulatedannualcompensationincreasesforcoveredemployees.Theincreasesvarybycollectivebargainingagreementandbyemployeeclassification.TheBudgetPlanincludesanestimateoftheaggregatecampusimpactoftheseincreasesforthefiscalyear.
B. UCRPEmployerContributions-TheUniversityofCaliforniaRetirement
Plan(UCRP)providespensionbenefitstoeligibleretireesandsurvivors.UnliketheCaliforniaStateUniversity,theCaliforniaCommunityColleges,oreveryotherStateagency,theUniversityofCaliforniacurrentlyreceivesnoregularannualStateGeneralFundappropriationtocoverincreasesinemployercontributionstoitsretirementplan;provisionstocoverthoseincreasesmustbecoveredfromtheUniversity’soperatingbudget.
EffectiveJuly1,2014,theUniversity’semployercontributiontoUCRP
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is14%ofcoveredpayroll.Consequently,anyprojectedincreaseincore-fundedcoveredpayrollexpendituresshouldbeexpectedtogenerateanadditional14%inmandatoryemployercontributionstoUCRP,whichmustbeacknowledgedintheBudgetPlan.TheimpactofbenefitplanchangesshouldbetakenintoaccountiftheyareexpectedtoaffecttherequiredemployercontributionduringtheBudgetPlanyear.
C. EmployeeHealthBenefits-TheBudgetPlantakesintoaccountthe
mostrecentavailableprojectionsregardingincreasesinUniversityofCaliforniaemployeehealthbenefitexpenditures.TheBudgetPlanreflectstheprojectedimpactofanymeasurestakenbytheUniversitytocontrolthegrowthinhealthbenefitexpendituresalongwithfactorsthatcontributeto costincreases(e.g.,changesinthecoverageprovidedbytheUniversity’splansorgeneralmarket-drivenchangesinthecostofhealthcare).
D. Retiree(Annuitant)Benefits(OPEB)-Morethan50,000Universityof
Californiaretireesandbeneficiariesareeligibletoreceive,orarereceiving,healthbenefitsthataresubsidizedbytheUniversity.AccumulatedfutureretireehealthbenefitcostsforUniversityretireesarenotprefunded.Asaresult,annualexpendituresforretireehealthbenefitsareaccountedforintheUniversity’sBudgetPlanjustastheyareforactiveemployees,andsimilarfactorsareusedtoestimateyear-to-yearchangesinthosecosts.
E. FacultyMeritProgram-TheFacultyMeritProgramisamerit-based
programoffacultysalaryadjustmentsdesignedtoretainthemosttalentedandproductivefacultymembers.Theprogramhasarigorouspeerreviewprocessbeforeameritsalaryincreaseisawardedandreinforcesapay-for-performancephilosophybyprovidingarewardmechanismtorecognizeexpansionofbothteachingandresearchskills.
AttheUniversityofCalifornia–asatanymajorresearchuniversity–maintainingafacultymeritprogramisamandatorycost.Moreover,sincefacultyareeligibleforreviewundertheprogramonlyonceeverythreeyears,temporarilyinterruptingtheprograminagivenyearwouldlevyanunduepenaltyonthecohortupforreviewthatyear.(Indeed,theUniversitylosttwoclass-actionlawsuitsin1994thatwerefiledonbehalfoffacultymemberswhodidnotreceive1991-92meritincreasesduetobudget constraintsthatyear.)
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F. Non-salarypriceincreases-Tomaintainthequalityoftheinstructionalprogramandallsupportactivities,theUniversitymustregularlyreplace,upgrade,orpurchasenewinstructionalequipment,librarymaterials,andothernon-salaryitems.TheUniversitymustalsopurchaseutilities,insurance,andothergoodsandservicesnecessarytosustainitsoperations.
III. High-PriorityCosts-Inadditiontochangesinmandatorycosts,the
BudgetPlanshouldacknowledgeotheranticipatedcostchangesfortheupcomingfiscalyear. Theseincludebutarenotlimitedtothefollowing:
A. Compensationforfacultyandnon-representedstaff-Toensurethat
theUniversityisabletorecruitandretainfacultyandstaff,theUniversitymustregularlyevaluatetheneedforappropriateandpredictablecompensationincreases.EstimatedincreasesincompensationexpendituresincludedintheBudgetplantakeintoconsideration,ataminimum,thefollowingfactors:
1. Anticipatedchangesinthenumberoffacultyandstaffemployees;
2. Inflationarypressures(i.e.,changesinthecostofliving)that,
ifleftunaddressed,woulderodethepurchasingpowerofemployees’earnings;
3. Themostrecentavailablesurveydataregardinghow
compensationforUniversityfacultyandstaffcomparewiththatofotheremployersintherelevantlabormarket(s);and
4. Anyprojectedchangeintherequiredemployee
contributiontoUCRP,whichaffectsanemployee’snetpay.
B. DeferredMaintenance-TheBudgetPlanincludesfundingtohelp
addresstheUniversity’sdeferredmaintenancebacklog,whichhasgrownastheelectrical,heatingandventilation,elevator,plumbing,otherbuildingsystems,andcampusinfrastructurereachandsurpasstheirusefullife.
C. DebtService-UnderaprocessestablishedwiththeState,beginningin
2013-14,aportionoftheUniversity’sStatefundingcanbeusedtofundorfinanceState-eligiblecapitalprojects.TheUniversity’sannual
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BudgetforStateCapitalImprovementsincludesfundingforthepreliminaryplans,workingdrawings,construction,and/orequipmentassociatedwithmajorcapitalprojects.TheBudgetPlanincludesreasonableestimatesofanycostincreasesrelatedtodebtserviceforapprovedandcompletedprojectsthatareexpectedtocomeon-lineduringthebudgetyear.
IV. SystemwideInitiatives-TheBudgetPlanmayalsoacknowledgesignificant
neworongoingsystemwideinitiativesandtheirassociatedcosts.TheinitiativesshouldbealignedwithstrategicsystemwideprioritiesthatareestablishedbythePresidentandapprovedbytheRegents.Examplesfrompastbudgetsinclude:
A. Effortstoimproveacademicqualitythroughoutthesystem
(e.g.,byimprovingthesystemwidestudent-facultyratio);
B. Improvinggraduatestudentsupport;and
C. Providingenhancedstudentmentalhealthservices.
V. StudentFinancialAid-TheUniversityofCaliforniaFinancialAidPolicy,establishedbytheRegents,describesthegoalsoftheUniversity’sfinancialaidprogramsforundergraduatestudents,graduateacademicstudents,andgraduatestudentsinprofessionaldegreeprograms.TheBudgetPlanincludesfundingfortheUniversity’saidprogramsthatisconsistentwiththosegoals.Formoreinformation,seeChapter15,FinancialAidFundingandAllocations.
VI. OperationalEfficienciesandAssociatedImpactontheBudgetPlan
A. TheBudgetPlanmayinclude,asanoffsettoexpenses,anyestimated
savingsfromsystemwideorcampusinitiativesintendedtoreducecostsand/orincreaseefficiency.
B. SavingsareincorporatedintotheBudgetPlanaseither:
1. Distinctlineitems(e.g.,anexpecteddollaramount
associatedwithoneormorecost-savingsinitiatives),or
2. Areductioninthecostincreasesthatwouldhaveotherwisebeenappliedtoaparticularexpensecategory(e.g.,byassumingslowergrowthinnon-salariesexpensesorstaffgrowththanwouldhaveotherwiseoccurred).
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Chapter4RevenueChanges&Projections
IncludedintheBudgetPlanarerevenueestimatesshowingincreasesordecreasesassociatedwiththeprimaryoperatingbudgetfundingsources.Thesesourcesareasfollows:
1) StateFunds
a. TheBudgetPlanshouldincludeaprojectedlevelofStatefundingforthebudgetyear.
b. ProjectedincreasestothecampusbudgetarebasedontheNovember
Regents’budgetproposalthenadjustedbasedontheGovernor’sJanuaryBudgetPlan,andthenonceagainaftertheMayrevise.AdjustmentstothecampusplanarealsomadeduringthespringofeachyearastheStatepoliticalprocessunfoldsandadditionalbudgetinformationbecomesknown.Theprocessisreflectedinchangestobothongoingandone-timefunding.
c. StateSpecialFunds–InadditiontoStateGeneralFundsupportthecampus
receivesfundingfromtheCaliforniaStateLotteryEducationFund,whichisusedtosupporteducationalactivitiessuchastheinstructionaluseofcomputingprogram.Otherearmarked(restricted)statesupportcomestotheUniversitythroughtheannualStateBudgetActappropriationsforspecificprograms.
2) StudentFees
a. StudentTuitionandFees-TheCampusBudgetPlanincludesmaterial
changesinstudenttuitionandfeerevenueassociatedwith(a)anyplannedenrollmentgrowthand(b)anyproposedchangetothosetuitionandfeelevels.
b. Increasestomandatorysystemwidecharges(TuitionandtheStudent
ServicesFee)andProfessionalDegreeSupplementalTuition(PDST)shouldbeaccompaniedbyadditionalfundingforstudentfinancialaidconsistentwiththeRegentalpolicy.(SeeChapter5,FinancialAidFundingandAllocations.)
3) AdditionalRevenueSources
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a. NonresidentSupplementalTuition-TheBudgetPlanshouldreflectNonresidentSupplementalTuition(NRST)revenueresultingfromanyanticipatedchangeinnonresidentstudentenrollmentreflectedintheBudgetPlan,alongwithanyproposedchangetoNRSTfees.
b. Indirectcostrecovery-TheBudgetPlanshouldreflectanticipatedchanges
toindirectcostrecovery(ICR)revenuebaseduponprojectedchangesinthevolumeoftheUniversity’sresearch-relatedactivitiesand/orchangesintheICRrateassessedonextramuralresearchgrants.
c. Philanthropy-TheBudgetPlanmayincludeanticipatedchangesin
philanthropicgivingtotheUniversitythatmaybeusedtofundcoreoperations.Tobeincludedintheplan,giftsmusteitherbeunrestrictedorhavetermsthatpermittheuseofsuchfundsforcoreoperations.
d. Assetmanagement-Newlyavailablepermanentorone-timefunds,ifany,
resultingfromimprovedassetmanagementstrategies(e.g.,improvedliquiditymanagementthatresultsinahigherexpectedfuturereturnontheUniversity’scurrentbalances)maybeincludedinthePlan.
e. Otherfunds-Significantprojectedchangesinotherrevenuesourcesamong
theUniversity’scorefundsshouldbeincludedintheBudgetPlan.One-timefundingshouldbeassociatedwithone-timeexpendituresintheBudgetPlan;permanentfundingshouldbeassociatedwithpermanentexpenditures.
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Chapter5UCSantaBarbaraAllocationFramework
TheUCSBCoordinatingCommitteeonBudgetStrategy(CCBS)hasidentifiedthefollowingcategoriesinordertohelpguidethediscussionsonallocationofnewcoreresources:
1) RequiredCostIncreases–ImplementationofSystem-wideProgramsincluding:a. SalaryChangesb. BenefitCostIncreases(Retirement,Health,etc.)c. UCOPAssessment
2) FormulaAllocationsbasedonEnrollmentGrowth
a. IncreaseinFacultyFTE–1facultyFTEper18.7studentFTEincreaseb. IncreaseinTeachingAssistantFTE–1T.A.FTEper44undergraduatestudentFTE
increasec. IncreaseinOMPforNewSpace–NewincreaseinMaintainedGrossSquareFeet
ofStateeligiblespaced. LongRangeDevelopmentPlan(publicsafety,traffic,etc.)–permitigation
agreementse. FinancialAid–set-asidesperUCpolicy
3) FundingforOngoingCommitments–examplesnotinpriorityorder
a. FacultyRecruitmentb. GraduateStudentSupportc. ResearchSupportd. DeferredMaintenancee. Sustainability
4) WorkloadandCostIncreases
a. PurchasedUtilitiesb. CommonGoodFee(TechnologyInfrastructureFee)c. EnrollmentDriven(OISS,Admissions,etc.)d. AdministrativeSupport(ComplianceandProcessDriven)e. ChangingStudentPopulation(non-residentvs.residentstudents,graduate
studentsvs.undergraduatestudents)
5) ProgramImprovementsa. Technology(Infrastructure,Equipment,&Development)b. DeferredMaintenance
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c. ClassroomRenovationd. EquipmentReplacement
6) Other
a. DepartmentSupportBudgetsb. StaffingImprovementsc. CapitalProgram(NewSpace,MajorRenovation,LifeSafety,etc.)d. DebtCapacity
Theabovelistisessentiallyanallocationhierarchywhichguidesthebudgetdevelopmentprocessandresultsintheidentificationofamountsneededtobeset-asidefor“required”allocations(categories1to3)andhelpsidentifythefundingavailableinanyoneyearforthosemorediscretionaryallocations(categories4to6).
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Chapter6UCOPAllocationProcess
DistributionofStateGeneralFundsBeginningin2008,theUniversityofCaliforniaOfficeofthePresidentinitiatedacomprehensivereviewofhowtheUniversitybudgetsandallocatesitsvariousfundsources.Aspartofthatinitiative,theUniversityexaminedtherationalefordistributingStateGeneralFundsanddevelopedastrategyforreadjustingthosedistributionsinordertoaddressdisparitiesamongcampusesinfundingperstudent.TheUniversitybeganimplementingthisnewstrategy–commonlyreferredtoas“Rebenching”–in2012-13withthegoalofachievingequivalentper-studentfundingfromeligibleStateGeneralFundswithinsixyears(i.e.,by2017-18orsoonerifpossible).PertheOfficeofthePresidentthegoalwasachievedwiththeFY2016-17allocations.TheUniversity’sstrategyforallocatingeligibleStateGeneralFundsisbuiltaroundthefollowingfourcoreprinciples:I. UnrestrictedStateGeneralFundsprovidedtotheUniversityshouldbe
allocatedtothecampusesforthepurposeoffurtheringtheUniversity’scoremissionsbasedonthenumbersandtypesofstudentstheyenroll.
II. UChasacommonstandardofexcellenceacrossitscampuses.TheStatesubsidy
perstudentshouldnotdependonthecampusthatastudentattends.Consistentwiththisprinciple,theamountofStateGeneralFundsperstudentallocatedtoacampusshouldbethesameforeachtypeofstudentacrossallofthecampuses.
III. RatherthanreduceStatefundingprovidedtoanycampus,rebenching shouldbe
implementedinawaythatseekstobringallcampusesuptothethen-currenthighestlevelofper-studentfunding.AportionofnewStateGeneralFundsreceivedbytheUniversityeachyearwillbeallocatedtoachievethisgoalby2017-18orsoonerifpossible.
IV. GraduateeducationisanintegralpartofUC'smissionandexcellenceandmust
berecognizedinanyallocationmodel.UCOPAllocationofStateGeneralFundsUnderrebenching,withtheexceptionoftheMercedandSanFrancisco,eachcampus’s
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permanentbasebudgetofStateGeneralFundswillreflectacombinationofatleasttwocomponents:
A. Fundstoenablecampusestosupportspecifiedprogramsorinitiativesand tocoveracommonleveloffixedcostsateachcampus(“set-asides”).Set-asidesrepresentthoseelementsofacampus’sStateGeneralFundallocationthatareintendedfor,orrestrictedto,specificpurposes,eitherbyStatelaworUniversitypolicy.ExamplesincludeStudentFinancialAid,andStudentAcademicPreparationandEducationalPartnership(SAPEP).Inaddition,the$15millionallocatedtoeachcampustoaddressfixedcoststhatareindependentofacampus’senrollmentlevelisincludedinthiscategory.
B. FundsallocatedtoachieveandtomaintainacommonlevelofStateGeneral
Fundsupportateachcampus,baseduponacampus’sweightedenrollmentforallocationpurposesasdescribedbelowinSectionD.
C. DuetotheuniqueneedsoftheMercedandtheSanFranciscocampuses,
permanentStateGeneralFundsallocatedtothesecampuseswillbedeterminedoutsideofthemethodologyusedtoallocatefundstotheothercampuses.
D. AnnualallocationsofnewStateGeneralFundsgenerallyreflect:
1. AnyportionofincrementalpermanentStateGeneralFundsthat
aredesignatedintheBudgetActtoaugmentsupportforaparticularprogramorprogramsatacampusorcampuses;
2. Costadjustments,asappropriate,foridentifiedset-asidesateach
campus;and
3. AtcampusesotherthanMercedandSanFrancisco,fundsintendedtoeliminate,overtime,campusdiscrepanciesinStatefundingperstudent(“rebenchingannualincrements”),and
4. Fundsintendedtoraiseeachcampus’sStatefundingperstudent
byanequivalentamountacrossthesystem(“per-studentdistributionfunds”),whereacampus’sfundingperstudentisbaseduponitsweightedenrollmentforallocationpurposesasdescribedinG.1below.
E. Anyportion ofincrementalpermanentStateGeneralFundsthatis
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designatedinstatuteforaparticularprogram(orprograms)shouldbeallocatedtothecampusresponsiblefortheoperationoftheprogram(s).ThesefundsaregenerallydesignatedintheStateBudgetAct.
F. Fundingforcostadjustmentstoset-asidesthataredeemedeligiblefor
annualcostadjustmentsshouldbeallocatedtothecampus(es)responsibleforthoseset-asides.
1. Ingeneral,costadjustmentsareproportionatetothesystemwide
increaseinpermanentStateGeneralFundsappropriationsfromtheprioryear.
2. AportionofincrementalStateGeneralFundsshouldbeusedto
narrowidentifiedgapsinStateGeneralFundsupportperstudentoneachcampus.ThefundingallocatedinagivenyearforthispurposeshouldbesufficienttoallowtheUniversitytomeetitsgoalofachievingequalper-studentfundingacrosscampusesby2017-18(orsooner)baseduponeachcampus’sweightedenrollmentforallocations(WEFA).
3. IncreasesinpermanentStateGeneralFundsnotcommittedtoother
purposesshouldbedistributedtocampusesindirectproportiontoeachcampus’sshareofthesystemwideWEFA.
4. ThePresidentmayallocateanyportionofnewStateGeneralFunds
tocampusesasneededtoaddressidentifiedfundingneedsand/ortoaddressadditionalgoalsbeyondthosedescribedabove.
G. Allocationofone-timeStateGeneralFundstocampuses
1. StateGeneralFundsprovidedonaone-timebasisshouldbe
allocatedtocampusesinamannerthatisgenerallyalignedwiththeintendeduseofthosefunds.Forexample,indeterminingcampusallocationsoffundsdesignatedfordeferredmaintenance,factorsthatmightbeconsideredincludesquarefootage,currentreplacementvalue,mixofsupportinginfrastructure,andpercentageofcampusspacethatisstatefunded.
2. Incaseswhereunrestrictedone-timefundingisprovided,
allocationsmaybebasedontherebenchingmethodologyoronanalternativemethodologythatisalignedwithobjectives
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identifiedbythePresident.
H. OtheradjustmentstocampusbasebudgetsofStateGeneralFunds
1. AllocationsmayincludeotheradjustmentstocampusbasebudgetsofStateGeneralFundstoachievesystemwidegoals.Examplesincludebutarenotlimitedto:
a. AdjustmentstotheStateGeneralFundportionofthe
UniversityStudentAidProgram;and
b. AdjustmentsneededtoachieveappropriatecampusfundinglevelsforprogramssuchastheFacultyHiringIncentiveProgramorothernewand/orongoingPresidentialinitiatives.
I. Calculationofenrollmentforallocationpurposes
a. Inconsultationwithcampuses,theOfficeofthePresident
willestablishenrollmentlevelsforState-supportedprogramsateachcampusforpurposesofallocatingStatefunds.UndergraduatestudentssubjecttoNonresidentSupplementalTuitionareexcludedfromtheseenrollmentlevels.
2. Thecalculationofper-studentfundingisbasedoncampuses’
weightedenrollmentforallocationpurposes(WEFA)ofstudentsinState-supportedprograms.Theassignedweightsbystudentlevelsareasfollows:
a. Undergraduate,postbaccalaureate,graduate
professional,andgraduateacademicmaster'sstudentsareweightedat1.
b. Academicdoctoralstudentsareweightedat2.5.
c. Healthsciencestudentsareweightedat5(withthe
exceptionofundergraduatesandgraduateacademicstudents,whoareweighted at1and2.5,respectively).
3. Iftheenrollmentlevelreferencedreflectsaratioofacademic
doctoralstudentstoundergraduatesthatislessthan12percentata
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campus,thecampus’sWEFAwillbeadjustedtoincludeadditionalacademicdoctoralstudentenrollmenttobringitsratioto12percent.Thisadjustmentisintendedtoprovidefundingtosuchcampusessothattheymaytakestepstoincreasethenumbersofacademicdoctoralstudentstoreach12percentofundergraduateenrollment.Campuses’progressingrowinggraduateenrollmentwillbereviewedperiodically.
J. Formulasfordeterminingcampusallocationsunderrebenchingareasfollows:
1. WiththeexceptionofMercedandSanFrancisco,upon
completionofrebenching(i.e.,for2017-18andsubsequentyears),acampus’spermanentallocationofStateGeneralFundswillbecalculatedasfollows:
a. TotalCampusPermanentAllocation=AllocationsforCampusSet-Asides+AllocationforEquitablePer-StudentFunding
b. AllocationforCampusSet-Asides=Newlydesignatedcampusset-asides(ifany)+Prior-YearAllocationforCampusSet-Asides+CostAdjustmentforEligibleSet-Asides
c. CostAdjustmentforEligibleSet-Asides=Prior-YearEligibleSet-Asides*IncreaseinUndesignatedPermanentStateGeneralFunds-NewMercedandSanFranciscoCorridorFunds/TotalPriorYearCampusBaseBudgets
d. AllocationforEquitablePer-StudentFunding=TotalUCStateGeneralFundAppropriations–TotalSet-Asides*CampusWeightedEnrollmentforAllocationPurposes/TotalUCWeightedEnrollmentforAllocationPurposes
K. Communicatingcampusallocations
1. Eachyear,theOfficeofthePresidentissuesallocationlettersto
campusesthatprovidecampus-specificallocationsofStateGeneralFundsand,asappropriate,StateSpecialFunds.
2. ThelettersandaccompanyingmaterialsdescribechangesinState
supportfromtheprioryear,alongwithadescriptionofthemethodologyusedtodeterminethosechanges.
3. Allocationlettersmayalsoprovideguidanceandexpectations
foraddressingprioritiesthatareofcriticalimportancetothesystem.
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4. Priortoadoptinganymaterialchangetotheunderlyinggoals,policies,orpracticesregardingStateGeneralFundallocationsdescribedinthissectiontheOfficeofthePresidentwillconsultwithcampusrepresentatives.
CampusGeneratedFunds
InSeptember2011,followingextensiveconsultationwithbothinternalandexternalUniversitystakeholders,thePresidentoftheUniversityofCaliforniaapprovedtheFundingStreamsInitiative.TheInitiativeaddressedseveralissues,includingthedistributionofcampus-generatedrevenues,fundingforthebudgetoftheOfficeofthePresident,andfundingforundergraduateandstudentfinancialaid.TogetherwithotherUniversitypolicies,theInitiativeaddressestheextenttowhichrevenueattributabletoacampusisretainedbythatcampus.
Thedistributionofcampus-generatedrevenuesundertheFundingStreamsInitiativereflectsthreegoals:
A. SimplifyingUniversityfinancialactivity;
B. Improvingtransparency;and
C. Providingcampuseswithincentivestoidentifyandtomaximize
revenueopportunities.
TheInitiativealsoreflectsanactivity-basedallocationmethodologyforcampus-generatedfunds,inwhichrevenuesassociatedwithcampus-basedfunctions(instruction,research,etc.)areretainedbythecampusthatincurredcostsassociatedwiththosefunctions.Beginningin2011-12,eachcampuswillretain:
A. Alltuitionandfeefundsgeneratedfromitsownstudents,subjectto
provisionsoftheUniversityStudentAidProgramallocations.
B. Eachlocationwillretainallindirectcostrecoveryfundsgeneratedfromitsowncontractandgrantactivity.
C. Allpatentrevenues,netofpaymentstojointholdersandinventors,willbe
allocatedtosourcelocations.
D. AllShort-TermInvestmentPool(STIP)earningsandTotalReturnInvestment Pool(TRIP)earnings,regardlessoffundsource,willbetransferredtosource locations.
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E. Eachcampuswillretainitsowngraduateapplicationfeerevenue;netundergraduateapplicationfeerevenuewillbedistributedproportionatelytothenumberofapplicationsreceivedbyeachcampus.
F. Priorassessmentsonmedicalcenterexpenditures,auxiliaryenterprise
expenditures,andmedicalcompensationplansthatsupportUCOPadministrationthroughtheOfficeofthePresidentCommonFundwillbeeliminated,butreplacedwithanotherwiderrangingassessmenttohelpfundoperatingexpensesassociatedwiththeOfficeofthePresident.
CampusallocationsoftherevenuesdescribedaboveareinadditiontoapplicableUniversitypoliciesandpracticesregardingothertypesofcampus-generatedrevenues–suchasgiftsandendowmentsdesignatedfor,oradministeredby,aparticularcampus,andrevenuegeneratedbycampusauxiliaryenterprises.
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Chapter7StateFunds
TheUniversitywascreatedbytheStateofCaliforniaasitsstate-supportedland-grantinstitution,andassuchisarecipientofStatefunds.TheStateannuallyappropriatesfundstoUCfromitGeneralFunds(fundscollectedfortheState’sgeneraluse).TheprocessofacquiringStatefundsisledbytheUCOfficeofthePresidentandtakesplaceinapoliticalcontextofnegotiationandcompromisethatestablishesthegeneralconditionsofuse.StateGeneralFundsareusedtohelpsupportallaspectsoftheUniversity,exceptforself-supportingactivitiessuchashousingandparking.Thesefundsareprovided,generally,asasinglelineitemintheStateBudget.However,theStateBudgetcananddoesincludeexplicitinstructionsintheformofbudgetlanguageiftheStatewantstodirectsomefundstowardaspecificprogram(e.g.,SAPEP).WhileGeneralFundallocationsrepresentthevastmajorityoffundsreceivedfromtheStatetheUniversityalsoreceives:
� SpecialStateFunds–Thesefundscompriseasmallportion(lessthan2.5%)oftheState’sappropriationtotheUniversity.Theyareearmarkedforspecificusethroughlegislativeand/orvoteractions.Likegeneralfunds,theycometotheUniversitythroughanannualStateBudgetActappropriation.Examplesinclude:
o StateLotteryFundso CigarettesandTobaccoProductsSurtaxFundo BreastCancerResearchAccount
SpecialStateFundsarerestrictedandmustbeusedaccordingtothetermsofthelegislationthatauthorizedthecollectionanduseoftheserevenues,andanyothertermsestablishedintheBudgetAct.
� StateContractsandGrants–ThecampusalsoreceivescontractsandgrantsfromState
agenciesfortheprovisionofresearchandpublicservices.Someindirectcostreimbursement(overhead)fortheadministrationofthesecontractsandgrantsisalsoreceivedandbecomespartoftheUCGeneralFundincome.Thefundsfromthissourcearerestrictedforusedaccordingtothetermsandconditionsoftheindividualaward.Thesefundsarenotpartofthecampuspermanentbudgetastheyaconsidered“extramuralfunds”.
StatefundsrepresentacriticalcomponentoftheUCSantaBarbaracore-fundingbase.Statefundingforthecampushasfluctuatedsubstantiallyovertime.FundingincreasesandreductionshavelargelycoincidedwithchangesintheState’seconomy.StateBudgetSchedule
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TheStatebudgetprocessforUCtakesbetween12and15monthsfromtheinitialplanningbyUCOPuntilthecampusreceivesfinalallocationinstructionsaftertheStatebudgetisapproved.Thenormaltimetableisasfollows:
� JulythroughSeptember–Campuscompletesandsubmitsrequired“budgettables”toUCOP.UCOPdevelopsdraftRegentsBudgetandbeginssystemwideconsultationonbudgetplan.
� OctoberthroughDecember–RegentsadoptUCBudgetPlanandsubmitsittotheState
forreviewandconsideration.
� JanuarythroughMarch–Governor’sBudgetProposalforfiscalyearbeginningJuly1isreleased.ComparisontoUCBudgetPlanismadeatthattimetodeterminedifferencesanddevelopplanstoreducefundingdifferences,ifany.Legislatureholdshearingsonthebudgetproposal.
� AprilthroughJune-Legislativehearingscontinue.Governorsubmits“MayRevise
Budget”whichupdatestheplanbasedonnewrevenueandexpenseinformation.AssemblyandSenateworktogethertoreconciledifferenceandapproveStateBudgetPlanforGovernorsignature.
� JulythroughSeptember–UCOPreviewsapprovedStateBudgetandmakesfinal
allocationstoeachcampus.
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Chapter8UCGeneral Funds
InadditiontoStateGeneralFundsupport,certainotherfundsourcesareunrestrictedandprovidegeneralsupportfortheUniversity’scoremissionactivities,basedonlong-standingagreementswiththeStateofCalifornia.CollectivelyreferredtoasUCGeneralFunds,thesesourcesinclude:
� Aportion(44.055%-55%of80.1%)ofindirectcostrecoveryonfederalcontractsandgrants(seeIndirectCostRecoverySectionofthismanualforadditionalinformation)
� IndirectcostassociatedwithStateContractsandGrants
� Non-ResidentSupplementalTuition(SeesectiononStudentFeesforadditional
information)
� Feesforapplicationforadmissions
� Othermiscellaneousfees
� Aportionofpatentroyaltyincome
� InterestonGeneralFundbalancesByfarthelargestsourceofUCGeneralFundsisNon-ResidentSupplementalTuitionandindirectcostrecoveryonfederalcontractandgrantsisthesecondlargestsource.Togetherthesetwosourcesgenerateapproximately95%ofcampusUCGeneralFunds.
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Chapter9StudentFees
Revenuefromstudenttuitionandfeeshasbecomethesinglelargestsourceoffundingforthecampusinrecentyears.ThecampusrelianceontuitionandfeerevenuetosupportoperationshasgrownovertimeinresponsetolargecutsinStatefunding.StudentsatUCSantaBarbaramaypayavarietyoffeesthatfallunderthiscategory.Theseincludebothmandatoryfeesaswellasotherfeespaidonlybyaportionofthestudents.MandatoryStudentFees
1) Tuition,amandatorysystem-widechargeassessedtoallregisteredstudentsusedtoprovidegeneralsupportforthecampusbudget.
2) StudentServicesFee,anothermandatorysystem-widechargeassessedtoallregistered
studentsthatsupportservicesbenefitingstudents.OtherStudentFees
3) Non-ResidentialSupplementalTuition(NRST),chargedtononresidentstudentsinadditiontomandatorysystem-widechargesandanyapplicablePDSTcharges,inlieuofStatesupportforthecostofeducation.
4) ProfessionDegreeSupplementalTuition(PDST),paidbystudentsenrolledinanumber
ofprofessionaldegreeprogramstosupportinstructionandspecificallytosustainandenhanceprogramquality.
5) CampusBasedFeesapprovedbyastudentvoteandusedtosupportavarietyof
student-relatedexpensesnotcompletelyoradequatelysupportedbyotherfees.PriortoimplementationthestudentapprovedfeemustbeapprovedatthecampusandbythePresidentoftheUniversityofCalifornia.
6) CourseMaterialFeestofundmaterials,supplies,tools,orequipmentwhichare
consumed,retained,orusedbythestudent,orothermaterialsorservicesnecessarytoprovideaspecialsupplementaleducationalexperienceofdirectbenefittothestudent.
7) SummerSessionFeesarebasedontheapprovedTuitionandStudentServicesFeebut
chargedonaper-unitbasis.Atleastone-thirdoftherevenuefromthemandatorysummerfeespaidbyUCstudentsareusedforfinancialaidandrolledintotheUniversityStudentAidProgram(USAP).Asanincentivetoencouragesummerenrollmentcampuses,onatemporarybasis,maychargefeeslowerthanthecalculatedper-unitfeelevel.
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8) ExtensionFeesarechargedbasedtocoverthefullcostsofthecourseandprogramofferingsprovidedthroughthisself-supportingprogram.
9) OtherServiceFeesincludethosechargedforfeeforserviceprogramsandvarious
events.Eachofthestudentfeesisdescribedinmoredetailinthesectionsthatfollow.Inaddition,theUCOPwebsite(seehttp://www.ucop.edu/operating-budget/index.html)containsinformationoncurrentandhistoricalfeelevelsandrelatedfeepolicies.TuitionTuition,formerlycalledtheEducationalFee,andisidentifiedbyfund#20095.Tuitionischargedtoallregisteredstudentsandprovidesgeneralsupportforthecampus-operatingbudget,includinginstruction,academicsupport,studentservices,institutionalsupport,operationandmaintenanceofplants,andstudentfinancialaid.Inrecentyearstuitionincreaseshavebeenneededprimarilytooffsetreductionsinstatefunds.TuitionlevelsarethesameatallUCcampusesandaresetannuallybyTheRegentsbasedonrecommendationsfromthePresident.Perthe1994StudentTuitionandFeePolicy,TuitionislimitedtothegeneralsupportoftheUC’soperatingbudgetandcannotbeusedforcapitalexpenditures.ForadditionalinformationseePolicy3101:TheUniversityofCaliforniaStudentTuitionandFeePolicy.StudentServicesFeeTheStudentServicesFee(SSF),formerlycalledtheRegistrationFee(Fund#20000primarily),ischargedtoallregisteredstudents.Liketuition,theStudentServicesFeeisdeterminedannuallybyTheRegents.Revenuefromthisfeefundsservicesandprogramsthatareimportanttostudents,butarenotpartoftheUniversity’sprogramsofinstruction,research,andpublicservice.Themajorityofthesefundsarespentonstudentservicessuchascounselingandcareerguidance,culturalandsocialactivities,andstudenthealthservices.Beginningin2007-08,portionsoftheStudentServicesFeewerespecificallydesignedforStudentMentalHealthServices(Fund#20005)andfinancialaid.Inaddition,StudentServicesFeerevenuecanbeusedforcapitalimprovementsthatprovideextracurricularbenefitsforstudents.ForadditionalinformationseePolicy3102:PrinciplesUnderlyingtheDeterminationofRegistrationFees.
TheallocationofStudentServicesFeeincomeisdeterminedbythecampusconsistentwithapplicableUniversitypoliciesandguidelines.EachcampushasaStudentFeeAdvisory
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Committee,themembershipofwhichisatleast50%students,toadvisetheChancellorontheuseofthisfundsource.Non-ResidentSupplementalTuitionInadditiontoallotherapplicabletuitionandfees,UCstudentswhodonotqualifyasCaliforniaresidentsarerequiredtopayNon-ResidentSupplementalTuition(NRST),consistentwiththeState’spolicynottoprovidesupportfornon-residentstudents.TheCaliforniaEducationCodeprovidesdirectiontoUCaboutsettingNRSTfeelevels.RevenuesderivedfromthissourceareconsideredUCGeneralandthusarepartofthe199XXgeneralfundbudget.UnlikeTuitionandStudentServicesfees,differentialfeesarechargedandgraduatestudentscurrentlypaysubstantiallylowerannualfeethanundergraduatestudents.Inrecentyears,revenuegeneratedfromNRSTfeeshasplayedanincreasinglyimportantroleinhelpingbackfillaportionoftheshortfallinStatefunding.NRSTdoesnothaveamandatoryfinancialaidset-asiderequirementsoalloftherevenuegeneratedthroughthisfeebecomespartoftheUCGeneralFundsbudgetandhelpsfund19900expenditures.Atyear-end19900expendituresaretransferredtothefundviayear-endprorationfinancialjournals.Undergraduateswhoenrollasnon-residentstypicallypayNRSTfeeseverytermthattheyattendUC,unlessastudent’sparentsmovetoCaliforniaorthestudentisdeemedfinanciallyindependent–averyhighstandardthatisdifficulttomeet–thestudentisunlikelytosatisfytheUniversity’sundergraduateresidencyrequirements.Domesticgraduatestudentsaregenerallypresumedtobefinanciallyindependentandtypicallyestablishresidencyafteroneyear.InternationalstudentscannotestablishresidencyandhencepayNRSTfeeseveryterm(althoughgraduateacademicstudentsareexemptfromthischargeforuptothreeyearsoncetheyadvancetocandidacy).ProfessionalDegreeSupplementalTuition(PDST)ProfessionalDegreeSupplementalTuitionwasestablishedin1994-95toallowUC’sprofessionalschoolstooffsetreductionsinStatesupportandmaintainprogramquality.UCSantaBarbarafirstchargedthePDSTfeein2015-16forthenewTechnologyManagementProgram(TMP)intheCollegeofEngineering.Revenuegeneratedbythefeestayswithintheprogramtocovereligibleoperatingcosts.ExpensesassociatedwiththefeearesubjecttoallcampustaxesandassessmentsincludingNon-StateFundingAdministrativeSupport,CommonGoodFeeforTechnologyServices,andtheUCOPAdministrativeAssessment.Inaddition,atleastone-thirdofthefeerevenueisset-asideforfinancialaidforTMPstudents.Whilepartof“corerevenues”,PDSTrevenuestayswithinthespecificprogramandinadditiontogeneralsupportandsalarycosts,relatedbenefitexpensesarealsofundedfromprogramrevenue(i.e.,nocentralfundingprovidedforbenefits).ForadditionalinformationseePolicy3103:PolicyonProfessionalDegreeSupplementalTuitionandPolicy3104:PrinciplesUnderlyingthe
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DeterminationofFeesforStudentsofProfessionalDegreePrograms.
CampusBasedFees
Campusbasedfeesvarywidelyacrosscampusesandbystudentlevelandfundavarietyofstudent-relatedexpensesnotfundedbyothersources.Eachofthefeesisapprovedbyastudentvoteandforaparticularpurpose.Useofthefeerevenueisrestrictedtotheuseidentifiedintheballotlanguagevotedonbythestudents.Dependingontheballotlanguagethefeescanpayforprogramoperations,debt,orinsomecasesbothoperatingandcapitalexpenses.Theapprovedfeeshelpfundprogramssuchastudentgovernment,publictransit,childcare,recreationfacilities,studenthealth,andCampusLearningAssistanceServices(CLAS).Allnewcampusbasedfeesalsoincludeafinancialaidcomponent.HistoricallyUCSantaBarbaracampusbasedfeeshavebeenamongthehighestintheUCsystem.CourseMaterialandServicesFees“Coursematerialsandservices”aredefinedasmaterials,supplies,tools,orequipmentwhichareconsumed,retained,orusedbythestudent,orothermaterialsorservicesnecessarytoprovideaspecialsupplementaleducationalbenefittothestudent.Feesmaybechargedtostudentstoparticipateintheinstructionalactivitiesofacourse,including:
1) Thecostofprovidingcoursematerialstobeconsumed,retainedorusedbythestudent;2) ThespecialcostsassociatedwithuseofUniversity-ownedtools,musicalinstruments,or
otherequipment;or3) Thecostofothermaterialsorservicesnecessarytoprovideaspecialsupplemental
educationalexperienceofdirectbenefittothestudent.ProposalsforanewCourseMaterialandServicesFeesgothrougharigorouscampusreviewthatincludestheAcademicSenateCollegeExecutiveCommittees,StudentFeeAdvisoryCommittee,IncomeandRechargeCommittee,andtheExecutiveViceChancellorbeforearecommendationismadetotheChancellorforconsideration.TheIncomeandRechargeCommitteeandtheExecutiveViceChancellorreviewproposedchangesinexistingfeesandthenafinalrecommendationismadetotheChancellorforconsideration.ForadditionalinformationregardingCourseMaterialFeesseehttp://www.ucop.edu/operating-budget/_files/fees/da2559.pdf.SummerSessionFeesSummerSessionFeesarebasedontheapprovedTuitionandStudentServicesFeeandarechargedonaperunitbasis.Atleastone-thirdoftherevenuefromthemandatorysummerfeespaidbyUCstudentsisusedforfinancialaidandrolledintotheUniversityStudentAidProgram(USAP).Asanincentivetoencouragesummerenrollmentcampuses,onatemporarybasis,
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maychargefeeslowerthanthecalculatedper-unitfeelevel.Unitfeesarecalculatedasfollows:
1) UndergraduateSummerSessionUnitFee=SumofTuitionandStudentServicesFeeDividedby45(numberofunitsassociatedwithfull-timeundergraduatestudent)
2) GraduateSummerSessionUnitFee=SumofTuitionandStudentServicesFeeDivided
by36(numberofunitsassociatedwithfull-timegraduatestudent)Inadditiontotheunitfee,SummerSessionstudentsalsoareassessedafeeassociatedwithCampusBasedFees.ThesamerestrictionsoncapitalusageassociatedwithTuitionandtheStudentServicesFeeapplytotheSummerSessionfeerevenue.Seehttp://policy.ucop.edu/doc/3100154/SummerFeesforadditionalinformationregardingsummersessionfees.UniversityExtensionInadditiontothetuitionandfeeschargedforregulardegreeprograms,thecampusalsogeneratesfeeincomefromenrollmentinUniversityExtensioncoursesthatofferawiderangeofcourses,programs,andcertificates.Seehttp://extension.ucsb.edu/index.jspforadditionalinformationontheExtensionprogramandfees.TheExtensionprogramisentirelyself-supporting,astheyreceivenoStatefunding.Thefeesarechargedtocoverthefullcostsofofferingthecourseandprograms.Theprogramsandclassesofferedaredependentuponuserdemand.ThefeelevelsforindividualclassesareestablishedatthecampusanddonotrequireapprovalbytheUniversityOfficeofthePresident.OtherSeparatefeesarealsochargedstudent-relatedservicesnotsupportedbymandatorytuitionandfees.Examplesofthesefeesincludestudenthealthinsurancefees,applicationfees,andfeesforspecificservices.Inaddition,incomefromsalesandservicesofeducationandsupportactivitiesfallunderthiscategory.Thisincludesincomefromticketsales(ArtsandLectures,Athletic,andotherevents).Similartoauxiliaryenterprises,theserevenuesaregenerallydedicatedtosupporttheactivityoperations.
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Chapter10IndirectCostRecovery
Contractandgrantactivitygeneratescostsintotwobasiccategories–directandindirect.Directcostsarethoseexpendituresthatcanbeidentifiedasdirectlybenefitinganddirectlychargedtoaspecificcontractorgrant.Indirectcostsarethoseexpenseswhichcannotbespecificallyidentifiedassolelybenefitingonespecificcontractorgrant,butinsteadareincurredforthecommongoodmanycontractsorgrants.Becausethesecostsarenotchargedtoaspecificaward,indirectcostsmustbefinancedbyUniversityfunds,withreimbursementbasedonthenegotiatedratesprovidedbythegrantingagency.Ingeneralterms,thereimbursementamountiscalculatedbymultiplyingtheapprovedindirectcostratetimestheeligibledirectcosts.WiththeimplementationoftheFundingStreamsInitiativein2011-12thecampusretainsalltheindirectcostrecoveryfundinggeneratedbythecampus.AFacilitiesandAdministration(F&AorIndirectCost)Rateisestablishedonthebasisofcostsincurredbytheuniversityinanidentifiedbaseyearandbynegotiationsbetweentheuniversityandthedesignatedfederalgovernmentagency(DHHS–DepartmentofHealthandHumanServicesforUC).Basically,therateistheindirectcostofaspecificfunction(i.e.,research)dividedbythemodifieddirectcostsincurredinsupportofthatfunctionduringthebaseyear.TheF&Arateisappliedonthesamebasisonwhichitiscalculated,namely,onwhatiscalledmodifiedtotaldirectcosts(MTDC),consistingofsalaries,benefits,materialandsupplies,travelandsubgrantsorsubcontractsuptothefirst$25,000ofeachsubgrantorsubcontractassociatedwithsponsoredprojects.Equipmentcosting$5,000ormore,capitalexpenditures,chargesfortuitionremission,rentalcosts,scholarships,andfellowshipsaswellastheportionofeachsubgrantorsubcontractinexcessof$25,000areexcludedfromtheMTDCbase.FederalIndirectCostRecoveryIn1990,TheStateapprovedlegislation(SB1308Garamendi)authorizingtheuseofindirectcostreimbursementfortheacquisition,construction,renovation,equipping,andongoingmaintenanceofcertainresearchfacilitiesandrelatedinfrastructure.Undertheprovisionofthelegislation,theUniversityisauthorizedtousethereimbursementreceivedasaresultofnewresearchconductedin,orasaresultof,thenewfacilitytofinanceandmaintainedthefacility.Theseeligiblecostsoftheseresearchfacilitiesrepresentthefirstuseoffederalindirectcostrecovery.Asof2016UCSBhas5eligibleresearchfacilitieseitherfullyorpartiallyfinancedundertheGaramendiprogram:KITP,MSRB,MRL,CNSI,andBioengineering.Inaddition,theUniversityhasanagreementwiththeStateregardingthedisbursementoffederalreimbursementfunding.Pursuanttothisagreement,thefirst19.9%(afterfundingofGaramendiprojectrelatedexpenses)ofthereimbursementaccruesdirectlytotheUniversityforcostsofcontractandgrantadministrationincampus-sponsoredprojectsoffices,administrativeoffices,academicdepartments,andresearchunits.Thisisthesourceofthe
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University’sContractandGrantOverheadorOff-the-TopFund(69750).Theremaining80.1%ofthefederalreimbursementissplitintotwofunds.Thefirst55%isbudgetedasUCGeneralFundsasfundnumber19933.Itisused,alongwithStateGeneralFundsandstudenttuitionandfeerevenue,tohelpfundtheUniversity’sbasicbudgetincludinginstruction,operationsandmaintenanceofplant,andadministration.Theremaining45%isthesourceoftheUniversity’sOpportunityFund(07427).Thisisusedtomakestrategicinvestmentsincampuspriorities,suchasenhancingfacultyrecruitmentpackagesthroughlabrenovations/alterations,equipmentpurchases,supportforgraduatestudentresearchers;fundingforcapitaloutlayanddebtpayments;andasneededforgeneraloperatingexpenses.OtherContractsandGrants(Non-Federal)Likefederalcontractsandgrants,othernon-federalawardsarealsochargedforindirectcostsusingthefederalrate.Examplesofnon-federalsourcesincludeprivatecorporations,privatefoundations,andfor-profitorganizations.ThereimbursementfromtheseawardsisthesourceoftheEducationalFund(05397).Aspartofthe2011-12FundingStreamsInitiativethecampusretainsalltheindirectcostrecoveryfundinggeneratedbythecampus.Thesefundsareusedinthesamemannerasopportunityfundstosupportfacultyrecruitment,thecapitalprogram,andothercampuspriorities.IndirectCostRateProposalsEveryfourtofiveyearsthecampusdevelopsanewFacilitiesandAdministrative(F&A)costproposalthatissubmittedtotheDepartmentofHealthandHumanServices(DHHS)forreview,negotiation,andapproval.Theentireprocesstakesapproximatelyoneyeartocompleteandtheendresultisanapprovedratethatisusedtorecoveryindirectcostsassociatedwithcontractandgrantactivity.Thekeycomponentsandstepsofthisprocessaresummarizedasfollows:
1) ThecampusworkingwiththeOfficeofthePresidentpreparesanindirectcostproposalbasedonactualcostsforthebaseyear.Thebaseyearistypicallytheyearbeforetheexisting(current)rateagreementisscheduledtoend.
2) Thecostproposalispreparedinaccordancewithcostprinciplesestablishedbythe
FederalOfficeofManagementandBudget(OMB)CircularandGuidance.Seehttp://www.bfs.ucsb.edu/omb/omb-uniform-guidanceforadditionalinformation.
3) Costsincludedintheproposalconsistsof:
a. Currentfundexpendituresrecordedinthecampusfinancialsystemexaminedbyexternalauditorsaspartoftheannualaudit.
b. Expensesrecordedinnon-currentfundssuchasdepreciation,interest,andnon-
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capitalizedplantfundsareaddedasadjustments.c. AllocatedcostofUCOPexpensesareaddedasanadjustmenttocampuscosts.d. Costandimpactofnewresearchfacilitiescompletedinthebaseyeararealso
presentedtosupporttheratenegotiations.
4) Basedonadetailedreviewattheaccount,subaccount,andobjectcodelevelcostsareallocatedtotheidentifieddirectandindirectcostpools.The“CostingPolicyandAnalysis”unitattheUCOfficeofthePresidentmanagesthiswork.TheCampusBudgetOfficecompletesthedetailedreviewofthiswork.
5) F&A(indirectcost)ratesarethencalculatedforeachofthedirectcostpools(research,
instruction,andotherinstitutionalactivities).
6) UCSBF&Arateproposalissubmittedtothedesignatedfederalagency(DHHSforUC).
7) Campusratenegotiationstrategydevelopedthroughcampusconsultation.Thestrategyincludesdesiredrateoutcomeandterm(numberofyears)oftheagreement.
8) UCOPandUCSBrespondtoquestionsregardingtherateproposalfromfederalindirect
costnegotiators.
9) Sitevisitbyfederalnegotiatorsisscheduledandincludesanentranceconference,departmentalvisits,buildingtours,ratenegotiations,andexitconference.Thesitevisitmayormaynotresultinagreementonnewrates.
10) Typicallythenewrateisimplemented24monthsafterthebaseyear(i.e.,baseyearof
FY2015-16withnewratestartinginFY2017-18).RateComponentsThecampusFacilitiesandAdministration(F&A/indirectcost)rateincludesthefollowingratecomponents:
1) FacilitiesRateComponents
a. BuildingUseAllowance–Ingeneralthiscostpoolconsistsofthedepreciationexpenseofcampusownedbuildings.Depreciationiscalculatedoncapitalizedcosts,excludingthecostoflandandfederalcontributions,usingstraight-linedepreciationbasedontheestimatedeconomiclifeoftheasset.Usefullivesassignedtobuildingsrangebetween26and33years.
b. Equipment–Thiscostpoolcontainsdepreciationexpenseforequipment
recordedinUCSB’sequipmentinventory.Equipmentisdefinedaspropertyhavingausefullifeofoneyearandanacquisitioncostof$5,000ormoreper
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unit.Depreciationiscalculatedonastraight-linebasiswithnosalvagevalue.
c. Interest–ThiscostpoolincludesinterestpaidbytheUniversityonthirdpartydebtusedtofinancethepurchase,construction,andrenovationofbuildings.
d. OperationsandMaintenance–Costpoolscontainsexpensesassociatedwiththe
operationandmaintenanceofcampusphysicalplantnetofrecharges.Inaddition,inincludescostassociatedwithEnvironmentalHealthandSafety,Utilities,anddepartmentpaidmaintenance.
e. Library–ContainsexpensesincurredfortheoperationoftheLibrarybothatthe
campusandtheOfficeofthePresident.
2) AdministrativeRateComponents
a. GeneralAdministration–Consistsofexpensesassociatedwiththegeneraladministrativeservicesprovidedtosubstantiallyallunitsoncampus.ExamplesincludetheofficesoftheChancellor,ExecutiveViceChancellor,BudgetandPlanning,AccountingandFinancialServices,andHumanResources.
b. DepartmentAdministration–Costpoolsincludeexpensesassociatedwith
centraladministrationandsupportoftheacademicprogram,includinginstructionaldepartments.
c. SponsoredProjectAdministration–IncludescostincurredbytheOfficeof
Researchandcampusadministrativeunitsresponsiblefortheadministrationofsponsoredprojects.
d. StudentAdministrationandServices-Containsexpensesassociatedwiththe
administrationofstudentaffairsandstudentservicesincludingtheofficesoftheViceChancellor,DeanofStudents,FinancialAid,CounselingandCareerServicesandotherunitsdedicatedtothesupportandadministrationofstudents.
Eachcomponenthasacalculatedrateandthetotaloftheadministrativecomponentiscappedat26%evenifthecalculatedamountexceedsthecappedfigure.Goto:http://www.ucop.edu/financial-accounting/_files/rates/rates_hist.pdfforatablethatshowsthehistoricalratesforUCSBandtheotherUCcampuses.DistributionofIndirectCostRecoveryReimbursementsAnnuallyallocationsofICRfundingaremadetoresearchcontrolpointsbasedonICRgeneratedbyindividualunitswithineachorganization.Separateallocationsarecalculatedforoverheadresultingfromfederalandnon-federalcontractsandgrants.Researchcontrolpointsare
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definedasthoseViceChancellorandDean’swithdepartmentsthatgeneratesubstantialindirectcostrecoveryonanannualbasis.CurrentlytheseincludedtheExecutiveViceChancellor,ViceChancellorResearch,DeanofEngineering,andDeanofMath,Life,andPhysicalSciences.Unitsreportingtothisgroupgeneratemorethan98%ofthecampusindirectcostrecoveryonanannualbasis.Thisgroup,alongwiththeAssistantChancellorFinanceandResourceManagementmeetmultipletimeseachyeartoreviewanddiscussallocationsofindirectcostrecoveryfunds.Thefollowingstepsarefollowedannuallytodeterminetheallocationstoindividualcontrolpoints:
1) IdentifytotalICRreceiptbaseforbothfederalandnon-federalcontractsandgrants.2) Reducebasebyoff-the-topGaramendi(researchbuilding)expensesthatincludedebt,
maintenance,andutilities.3) Distributenetallocationstoappropriatefundgroups–generalfunds,opportunityfund,
C&Goverhead,andeducationalfee.Thebaseforfurtherdistributionisnetofthegeneralfundallocation.
4) Reducebasebyapprovedcampusdistributionssupportingresearch.Thisrepresentsthebaseusedtodetermineallocationstoresearchcontrolpoints.
5) Determinethepercentagecontributionofeachcontrolpointtothefundusingathree-yearrollingaveragetominimizeannual“blips”indistribution.
6) Basedonthedepartmentaladministrationcomponent(36.70%)oftheindirectcostratedeterminetheamounttobeallocatedtoresearchcontrolpoints.Calculationis36.70%timestheallocationbase(see#4above).
7) Allocationsaredeterminedusingtheamounttobeallocated(#6)timesthepercentagecontributions(#5)bycontrolpoints.
8) Researchcontrolpointsagreeonthedistributionandallocationsarethenmade.9) Eachresearchcontrolpointdetermineshowtousethefundingtransferredtotheir
individualarea.StateofCaliforniaIndirectCostRecoveryTheUniversityofCalifornia(UC),CaliforniaStateUniversitySystemandStateofCaliforniaDepartmentofGeneralServiceshavesignedamemorandumofunderstandingimplementingstandardawardagreementtermsandconditions,aswellasstandardproposalcomponents.Commonlyreferredtoas“AB20”or“ModelAgreement”,thestandardtermstookeffectJanuary1,2016.Atthesametime,UCOfficeofthePresident(UCOP)establishedanindirectcostrate(UCRate)forcontractsandgrantsfundingbytheStateofCalifornia.TheUCon-campusratefortheperiodthroughJune30,2017is25%.OnJuly1,2017therateincreasesto30%,thento35%onJuly1,2018,andto40%onJuly1,2019.Theoff-campusrateforallperiodsis25%.Theoff-campusUCRateforallperiodsis25%.TheUCRateineffectforthefirstyearofamulti-yearprojectwillbetheIDCrateusedfortheentireprojectunlessadditionalfunds,notpreviouslyappropriatedorbudgeted)areawarded.Questionsregardingthe“UCRate”shouldbedirected
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totheSponsoredProjectOffice(SPO).AllindirectcostrecoveryassociatedwithStatecontractsandgrantsbecomepartofthecampusgeneralfunds(19900).
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Chapter11CampusAssessmentsandTaxes
UCSantaBarbarahasthefollowingcampus-wideassessment(taxes)inplacetohelpfundthefollowingprograms:
1) Non-StateFundedAdministrativeSupport2) UCOPSupportAssessment3) TechnologyInfrastructureFee4) GiftAssessment(SeeSectiononGiftsandEndowmentsforDetails)
Eachoftheseassessmentsisdescribedindetailinthesectionsthatfollow.Inaddition,theratehistoryassociatedwiththeseassessmentscanbefoundontheBudgetandPlanningwebsiteat:http://bap.ucsb.edu/budget/.
Non-StateFundedAdministrativeSupport(NSFAS)AssessmentNSFASisessentiallyanadministrativeoverheadchargeagainstnon-corefundswithinthreeprimaryfundgroups–non-mandatorystudentfees,salesandservices,andothersources(miscellaneousincome).Thefeeisnotassessedagainstgeneralfunds,mandatorystudentfees,contractsandgrants,andgiftsasthesesourcesfundadministrativecostsdirectlyorthroughseparateoverheadassessmentprograms.TheNon-StateFundedAdministrativeSupport(NSFAS)hasbeeninplacesincethemid1980’s.InFY2010-11theNSFASassessmentwastransitionedfromanassessmentofnon-staterevenuestoanassessmentbasedonnon-stateexpenditures.ThestatedassessmentrateforFY2010-11was6%.Thisratewasincreasedto7%effectiveJuly1,2011.Perlong-standingagreementssomefunds,primarilycampus-basedfees,haveamuchlowerassessmentrate.Threedepartments,theUniversityCenter(UCEN),AssociatedStudents(ASTD),andtheFacultyClub(FACL)continuewiththerevenuebasedNSFASassessmentgiventhattheirexpendituresarenotdirectlyrecordedtotheUCSBG/L.TheNSFASchargesforthesedepartmentsarerecordedatyear-end.Inbrief,undertheexpenditurebasedassessmentapproachtheNSFASassessmentrateisappliedtoexpendituresinallaccountsandsub-accountslinkedtothenon-statefundbeingassessed.TheassessmentrateusedasofFY2016-17is7.0%(1.0%forcertainstudentfeefundsbasedonanagreementapprovedbytheExecutiveViceChancellor).However,thefollowingexpendituresare"taxexempt"andexcludedfromtheexpenditureassessmentbase:• Expendituresforlongtermdebtservicing,regardlessoffundsource.• Expendituresinthe78(FinancialAid)functionalarea,regardlessoffundsource.
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• PriorNSFASandothercampusadministrativesupportassessments(identifiedbyobjectcode3740).Thisavoidsdoubletaxingafundthatiscreatedbyatax.Forexample,theworker’scompensationfundwhichisfundedbyapayrollassessment.
• ExpendituresonstudentfeeremissionandGSHIP(identifiedbyobjectcodes8570,8590,
and8970).• Equipmentexpenditures(objectcodes9xxx).Inreviewingthefunddetailsomeaccount-fundsshowNSFAScredits.Thesearetobeexpectedparticularlyintheinstanceofrechargefunds.Overtime,rechargefundsoperatingontheno-gainno-lossprincipalshouldseeNSFAScharges/creditsbalanceouttozero($0).However,aprocesstakesplaceafterthecloseofthefiscalyear,toreviewandpossiblyreverseanyNSFAScreditsthathavebeeninappropriatelyextendedtorechargefunds.UndernocircumstancesshoulddepartmentsbudgettheNSFASforrecoveryfromcampussub9recharges;however,recoveryofNSFASfromoff-campusrevenuesourcesmaybeallowablesubjecttootherpoliciesgoverningsuchexternalratesandfees.ForavarietyofreasonsanumberoffundswithincurrentNSFASfundrangesarenotnowbeingassessed.ThiscouldbebecausethesearenewfundsthathavebeenrecentlyestablishedorwhenNSFASwasfirstestablishedinthemid-1980’stherevenuegeneratedbythefundwaslessthantheassessmentthresholdatthattime.Overtimetheassessmentwillbeextendedtoallnon-statefunds.Therationalforextendingtheassessmenttoallfundsisthatalltransactionsresultinoverheadexpensesandthereforeshouldbecharged.Absentanassessmenttheoverheadforthesefundsisessentiallybeingsubsidizedbycorefunds,whichhavebeencutdramaticallyinrecentyears.UCOPSupportAssessment–CampusImplementationAspartoftheimplementationofthe“fundingstreamsproposal”theOfficeofthePresidenthasdistributedfundingpreviouslyusedtosupporttheiroperationstocampuses.Theyhavethenassessed(taxed)eachofthecampusesaflatratetosupportUCOPprovidedservices.Theassessmentisbasedontotalcampusexpenditures,numberofstudents,andfaculty/staffateachcampus.I. Effectivewiththe2014-15fiscalyear,thecostofthetotalsystemwide
assessmentisdistributedacrosscampusesbasedonthreeequallyweightedfactors:A. Currentexpendituresfromthecampus.Acampus’stotalexpenditureswill
beusedasageneralindicatorofthefinancialresourcesavailableatthecampus.
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B. Totalnumberofemployeesatthecampus.Theconsiderationofacampus’sshareoftotalUniversityemployeesisintendedtogenerallyreflectacampus’sshareofservicesprovidedbytheOfficeofthePresidentthatarealignedwithemployment-relatedfunctions.
C. Totalnumberofstudents.Acampus’stotalstudentenrollmentrepresentsa
proxyforthecampus’sshareofstudent-andinstruction-relatedservicesandresourcesprovidedbytheOfficeofthePresident.
Campusesarepermittedtouseanyfundsourceorcombinationoffundsourcesnototherwiselegallyrestrictedtocovertheirshareoftheannualassessment.ThetaxrateforFY2016-17is2.97%ofeligibleoperatingexpenses(excludesfinancialaidandcertaincampusbasedfees)andthefundingisusedtocovertheUCSantaBarbarashareofUCOPoperatingexpenses,UCPathimplementation,andlegalexpenses.Thetotalamountcollectedfor2016-17is22,375,834PrinciplesforImplementingtheUCOPSupportAssessment� Theassessmentisbasedonexpendituresnotfundsource.� Sinceallfundsmakeupthebaseusedtocalculatetheassessment,allfundsshould
contributetowardstheassessment.� Anyassessmentassociatedwithcontractandgrantexpenditureswillbefundedfrom
indirectcostrecoveryfunds.ThisispossiblegiventhatUCOPnolongerretainsanyofthesefunds.Also,giventhataportionofUCOPcostsarealreadyincludedinthecurrent51.5%overheadchargedagainstgrantsthisnewassessmentwouldbeconsidereddoubletaxingforthesamepurpose.
� Theassessmentassociatedwithcorefunds(generalfundsandmandatorystudentfees)will
bepaidcentrallyusingfundsalreadyallocatedandset-asideforthatpurpose.� Totheextentpossiblechargesshouldnotbepassedonto,orbetween,othercampus
departmentsthroughhigherrates(i.e.,recharges,MOU’s,feeagreements).Allproposedrateincreaseswillbesubjecttonormalcampusreviewandconsultation.
ImplementationoftheAssessment� AssessmentamountsareprovidedtoeachViceChancellorcontrolpointthatreflectstheir
areastotalassessment,credits,andthenetassessment.Theassessmentisbasedonexpenditures,notfundsource.
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� Eachcontrolpointisresponsibleforpayingtheirexpenditureassessmentandhavebroaddiscretioninidentifyingthefundsourcesfromwhichtheassessmentwillbepaid,excepttheassessmentmaynotbefundedusingcampusbasedstudentfees,financialaidfunds,contractandgrantfunds,orrechargefunds.
� IncollectingtheassessmentControlPointsneedtobemindfulofanyagreementsand
commitmentsthatmayrestrictorlimittheuseofanyspecificfund.Giventhis,ControlPointshavethediscretiontoincludeorexcludeindividualfundsasthecollecttheassessment.Shouldtheyberequiredordecidetoexcludeafundtheywillthenhavetomakeuptheexcludedamountfromotherresourcesundertheircontrol.
� ControlPointsaretypicallynotifiedoftheirassessmentamountinthelatefallofeachyear
withtheassessment“dueandpayable”inthefollowingspring.Onlyonetransferoffundsfromeachcontrolpointisacceptedforpaymentoftheassessment.ItistheresponsibilityoftheControlPointtodeterminehowtoimplementtheassessment,theamounttobepaidindividualunits,andconsolidatethereturnofassessmentintoonetransferoffunds.
AssessmentCalculation� Step1–ExpenditureBase–Thisrepresentsyear-endexpendituresbycontrolpointless
financialaidasthebasisfortheexpenditureassessment.Theresultwillbereferredtoas“netexpenditures”.
� Step2–Assessment-UCOPprovidescampuswiththetotalassessmentamount(i.e.,UCOP
Assessment).� Step3–AssessmentPercentage-Calculatedbydividingthe“UCOPassessment”by“net
expenditures”.� Step4–GrossAssessment-Grosscontrolpointassessmentsarecalculatedbymultiplying
theassessmentpercentage(Step3)timesthecontrolpointtotalexpenses(Step1).� Step5-Credits–Representsassessmentcreditsbyexpenditurefundsource.Credits
providedforexpendituresassociatedwithgeneralfunds,indirectcostrecovery,andmandatorystudentfeesascampusreceivedadditionalallocationsofthesefundsthroughthefundingstreamsprocess.
� Step6–NetAssessment–Equals“grossassessment”less“credits”.Thisistheamountthat
eachcontrolisrequiredtoreturntoacentralaccountinordertofullyfundtheUCOPassessment.Seesectionon“ImplementationoftheAssessment”foradditionaldetails.
EnterpriseTechnologyServices(ETS)Fee
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TheETSSupportAssessmentafterdiscussionwithandendorsementbytheInformationTechnologyBoard(ITB)andtheCoordinatingCommitteeonBudgetStrategy(CCBS)wasimplementbeginningFY2014-15.ThefeeprovidesfinancialsupportforEnterpriseTechnologyServicesandrepresentsa“commongoodassessment”withrevenuesusedtocoverongoingservicesbenefitingthecampusasawhole,aswellasprovidingafundingstreamneededtoimplemententerprisesystemimprovements.AspartoftheimplementationoftheETSAssessment,corefundingthatwasformerlyusedtosupportETSoperationswasreturnedtoacentralaccountandanumberofrechargearrangements–suchasthecampusTechnologyInfrastructureFee(TIF)–havebeendiscontinued.ThenewETSAssessmenthasreplacedthesefundingstreams.Thedistribution(allocation)oftheassessmenttocontrolpointsisconsistenttothemethodemployedwiththeUCOPsupportassessment.LiketheUCOPassessment,theETSassessmentcannotbefundedfromfinancialaidfunds,andpercampusdecisionthetaxisnottobefundedfromcampusbasedfees.PrinciplesforImplementingtheETSSupportAssessment
� Theassessmentisbasedonexpenditures,notfundsource.
� Allfundsmaycontributetowardstheassessment,excepttheassessmentmaynotbefundedusingcampusbasedstudentfees,financialaidfunds,contractandgrantfunds,orrechargefunds.WithintheidentifiedrestrictionsindividualControlPointsdeterminewhatfundsourcestousetofundtheirportionoftheassessment.
� Anyassessmentassociatedwithcontractandgrantexpenditureswillbefundedfrom
indirectcostrecoveryfunds.Also,giventhataportionofUCOPcostsarealreadyincludedinthecurrentchargedagainstgrantsthisnewassessmentwouldbeconsidereddoubletaxingforthesamepurpose.
� IncollectingtheassessmentControlPointsneedtobemindfulofanyagreementsand
commitmentsthatmayrestrictorlimittheuseofaspecificfund.Giventhis,ControlPointshavethediscretiontoincludeorexcludeindividualfundsastheycollecttheassessment.Shouldtheyberequiredordecidetoexcludeafundtheywillthenhavetomakeuptheexcludedamountfromotherresourcesusedtheircontrol/management.
� Theassessmentassociatedwithcorefunds(generalfundsandmandatorystudentfees)
willbepaidcentrallyusingfundsalreadyallocatedandset-asideforthatpurpose.
� Totheextentpossiblechargesshouldnotbepassedonto,orbetween,othercampusdepartmentsthroughhigherrates(i.e.,recharges,MOU’s,feeagreements).Allproposedrateincreaseswillbesubjecttonormalcampusreviewandconsultation.
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ImplementationoftheAssessment� AssessmentamountsareprovidedtoeachViceChancellorcontrolpointthatreflectstheir
areastotalassessment,credits,andthenetassessment.Theassessmentisbasedonexpenditures,notfundsource.
� Eachcontrolpointisresponsibleforpayingtheirexpenditureassessmentandhavebroad
discretioninidentifyingthefundsourcesfromwhichtheassessmentwillbepaid,excepttheassessmentmaynotbefundedusingcampusbasedstudentfees,financialaidfunds,contractandgrantfunds,orrechargefunds.
� IncollectingtheassessmentControlPointsneedtobemindfulofanyagreementsand
commitmentsthatmayrestrictorlimittheuseofanyspecificfund.Giventhis,ControlPointshavethediscretiontoincludeorexcludeindividualfundsasthecollecttheassessment.Shouldtheyberequiredordecidetoexcludeafundtheywillthenhavetomakeuptheexcludedamountfromotherresourcesundertheircontrol.
� ControlPointsaretypicallynotifiedoftheirassessmentamountinthelatefallofeachyear
withtheassessment“dueandpayable”inthefollowingspring.Onlyonetransferoffundsfromeachcontrolpointwillbeacceptedforpaymentoftheassessment.
AssessmentCalculation� Step1–ExpenditureBase–Thisrepresentsyear-endexpendituresbycontrolpointless
financialaidandcampusbasedstudentfeesasthebasisfortheexpenditureassessment.Theresultwillbereferredtoas“netexpenditures”.
� Step2–Assessment–Thecurrentrateis1.95%.Anychangestotheassessmentratewillbe
theInformationTechnologyBoard,reviewedbytheCoordinatingCommitteeonBudgetStrategy,andapprovedbytheExecutiveViceChancellorand/ortheChancellor.
� Step3–AssessmentAmount-Calculatedbymultiplyingtheassessmentratetimesthe
campusnetoperatingexpenditures.� Step4–GrossAssessment-Grosscontrolpointassessmentsarecalculatedbymultiplying
theassessmentpercentage(Step3)timesthecontrolpointtotalexpenses(Step1).� Step5-Credits–Representsassessmentcreditsbyexpenditurefundsource.Credits
providedforexpendituresassociatedwithgeneralfunds,indirectcostrecovery,andmandatorystudentfeesascampusreceivedadditionalallocationsofthesefundsthroughthefundingstreamsprocess.
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� Step6–NetAssessment–Equals“grossassessment”less“credits”.ThisistheamountthateachcontrolisrequiredtoreturntoacentralaccountinordertofullyfundtheUCOPassessment.Seesectionon“ImplementationoftheAssessment”foradditionaldetails.
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Chapter12GiftsandEndowments(Philanthropy)
TherearetwolegalentitiesthatUCpolicyallowstoacceptgiftsinsupportofourcampus-TheUCRegentsandtheUCSantaBarbaraFoundation.Philanthropyannuallyprovidessupportforawiderangeofactivitiesincludingstudentfinancialaid,facultychairs,research,capitalimprovements,andprogramsupport.Fundsinthiscategoryincludecurrentyeargifts,aswellasannualpayoutsfromendowmentsandfundsfunctioningasendowments(FFE).Giftsarereceivedfromalumni,friendsoftheUniversity,corporations,privatefoundations,andothernon-profitentities.Endowmentsarecreatedwhenadonorspecifiesthatthegiftfundsaretoberetainedandinvestedinperpetuityforincomeproducingpurposes.Incomefromendowmentscaneitherberestrictedorunrestrictedbasedondonordesignation.PayoutsfromtheRegents’endowmentsarepermanentlybudgetedwhilepayoutsfromthecampusfoundationarehandledthroughfundtransferstothecampusandtheappropriateimplementingdepartment/organization.Whilesupportingawiderangeofactivities,expendituresfromGiftandEndowmentFundstendtobehighlyrestrictedduetoconditionsplacedonusagebythedonor.BeginningJuly1,2012anadministrativefeeof6%isassessedonreceiptofnewgiftsandpledgepayments.Giftsaresubjectto6%giftfeeassessmentwithamaximumfeeof$180,000onanyonegift.Incaseswhereagiftisatangibleasset(i.e.,property)andislatersoldtheygiveadministrativefeeispaidatthetimeofsale.On“gifts-in-kind”noadministrativefeeischargedasnocashisinvolvedinthistransaction.Revenuegeneratedfromthegiftfeeassessmentisusedtohelpcovertheoperatingcostsofthecampusfundraisingprogram.Thegiftfeeisusedtoreducetheuseofcorefundingandunrestrictedgiftsincoveringthecostsoffundraisingactivitiesandallowthereallocationofsuchfundstoothercoreprogramsofthecampus.Inthefuture,shouldallcoreandunrestrictedgiftfundingforfundraisingactivitiesbereplacedanyadditionalgiftfeerevenuewillbeusedtoenhanceandexpandfundraisingeffortsofthecampus.Thegiftfeeisdisclosedtodonorsingiftdocuments,pledgeletters,proposals,solicitationsandotherrelateddocumentstoensuredonorsareveryawareoftheassessment.TheannualcampusBudgetPlandoesnotincludeanticipatedchangesinphilanthropicgivingtotheUniversitythatmaybeusedtofundcoreoperations.Tobeincludedintheplan,giftsmusteitherbeunrestrictedorhavetermsthatpermittheuseofsuchfundsforcoreoperations.Experienceindicatesthevastmajority(upwardsof98%)ofgiftstendtoberestrictedforspecificusesandassuchthefundsgeneratedfromthissourcetypicallyarenotincludedaspartoftheBudgetPlanforcoreoperations.Theplandoes,however,includeanestimateofgiftfeerevenuetobecollectedasithelpsfundtheoperatingcostsofacoreoperationalunit(Development).
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Eachgifthasanassociated“FundRecordSheet”whichprovidesdetailedinformationaboutthegiftincludingfundnumber,fundname,donoridentification,purpose,fundadministrator,fundtype,andrelevantbackground.Commonlyusedtermsassociatedwithgiftsincludethefollowing:
� CurrentYearGifts–Acurrentusefundiscomposedofagiftorgiftsdonatedwiththeexpressintentthattheybefullyexpended.Acurrentusegiftmaybedesignatedunrestricted(Afunds)orrestricted(Bfunds).
� FundFunctioningasEndowments(CFunds)–AnFFEisnotdesignatedbythedonorforendowment,butaretreatedasendowmentsbyadministrativeaction.TheincomegeneratedfromaFFEisdistributedannuallytoappropriatecampusdepartment.Withadequatenoticetheprincipleofthefundcanalsobeallocatedandusedinaccordancewiththeinitialgiftagreement.
� Endowments(DFund)–Fundsspecifiedbydonorsthataretoberetainedandinvestedinperpetuityforincomeproducingpurposes.Incomefromendowmentscaneitherberestrictedorunrestrictedbasedondonordesignation.
� Pledge–Asignedcommitmenttomakeagiftoveraspecifiedperiod,payableaccordingtotermssetforthbythedonor,nottoexceedafive-yearperiod,withscheduledpayments.
� RestrictedGift–Agiftgivenwithaspecifiedpurposeclearlystatedbythedonor.� UnrestrictedGift–Agiftgivenwithoutanyrestrictionsonitsuse.
CurrentUseGifts(Processing)IfthegiftismadetotheUCRegents,itisdepositedwiththeUCSBCashier'sOfficeandTheAccountingOfficepostsittothecampusgeneralledgeroncethegifthasbeenformallyacceptedandprocessedbytheGiftAdministrationUnitwithintheDevelopmentOffice.IfthegiftismadetotheUCSantaBarbaraFoundationthecheckisdeliveredtotheGiftAdministrationUnitintheDevelopmentOfficeandthendepositedbytheFoundationintotheirexternalclearingaccount.OncethegifthasbeenformallyacceptedandprocessedbyGiftAdministration,theFoundationreconcilesthedailydepositdatawithadownloadofthemonthfromGiftAdministrationandthenclosesthemonthlyaccountingcycle.AftertheclosetheFoundationcutscheckstothecampusfordepositandthesearedepositedwiththeUCSBCashier'sOffice.ThentheAccountingOfficedistributesthefundstotheCampusGeneralLedger.NOTE:BecausethetimeframetoprocessUCRegentscurrentusegiftstypicallytakeslesstime,andallcurrentusegiftsareencouragedtoflowtotheUCRegents.EndowmentGifts
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IfthegiftismadetotheUCRegents,itisdepositedwiththeUCSBCashier'sOfficeandTheAccountingOfficejournalsthefundsuptoUCOPforinvestmentbytheOfficeofthePresidentCIO.Thegiftitselfdoesnotpostontothecampusgeneralledger,insteaditisrecordedonUCOPGeneralLedger.Whenpayoutsfromendowedfundsoccur,theyareprocessedbyjournaldownandtheCampusAccountingOfficepoststhemintothecampusgeneralledgerincoordinationwiththeBudgetOffice.IfthegiftismadetotheUCSantaBarbaraFoundationthecheckisdeliveredtotheGiftAdministrationUnitintheDevelopmentOfficeandthendepositedbytheFoundationintotheirexternalclearingaccount.OnthegifthasbeenformallyacceptedandprocessedbyGiftAdministration,theFoundationreconcilesthedailydepositdatawithadownloadofthemonthfromGiftAdministrationandthenclosesthemonthlyaccountingcycle.TheFoundationtheninveststhefundsintheFoundation'sLongTermInvestmentPool.Whenpayoutsoccur,theFoundationcutscheckstothecampusfordepositandthesearedepositedwiththeUCSBCashier'sOffice.ThentheAccountingOfficedistributesthefundstotheCampusGeneralLedger.Foradditionalinformationonphilanthropygoto:https://giving.ucsb.edu/ucsb-foundation.Fromthislink,youcanaccesspoliciesandguidancerelatedfinancialmanagementofgiftfunds.
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Chapter13InterestonInvestments
CashbalancesareinvestedinSTIPorTRIPtogenerateinterestincometosupportcampusoperatingandcapitalneeds.TheChiefInvestmentOfficeroftheRegentsmanagestheinvestmentsassociatedwiththeSTIPandTRIPprograms.ThecampusworkswiththeOfficeofthePresidenttodeterminewhatpercentageofcashbalances,intotalandnotbyindividualfunds,shouldbeinvestedineachvehiclebasedonanticipatedcashneeds.TheShort-TermInvestmentPool(STIP)wasestablishedinFY1975-76asacashinvestmentpoolavailabletoallUCfundgroups.STIPallowsfundparticipantstomaximizethereturnsontheirshort-termcashbalancesbytakingadvantageoftheeconomiesofscaleofinvestinginalargerpool.STIPconsistsprimarilyofcurrentfundsslatedforpayrollandoperating/constructionexpensesforallUCcampusesandmedicalcenter.Inaddition,fundsawaitingpermanentinvestmentinoneofthelong-termpoolsareinvestedinSTIPtoearnmaximumdailyinterestuntiltransferred.TheTotalReturnInvestmentPool(TRIP)isaninvestmentpoolestablishedin2008bytheRegents’andisavailabletoUCcampusesandtheUCOfficeofthePresident.TheTRIPallowscampusestomaximizereturnontheirintermediate-termworkingcapital,subjecttoanacceptablelevelofrisk,bytakingadvantageoftheeconomiesofscaleofinvestinginalargerpoolandinvestingacrossabroadrangeofassetclasses.Giventhevolatilenatureofinvestments,theinterestincomefromthissourceisonlyusedasone-timefundingandnotpermanentlybudgeted.TofurtherminimizerisksSTIPandTRIPincomeisnotallocateduntiltheactualreceiptofthefundsasopposedtousingarevenueestimatebasedoninterestratesatapointintime.Essentiallytheincomeisbudgetedandallocatedthefiscalyearafteritisearned.Forexample,interestincomeassociatedwithFY2014-15investmentswouldbeusedinFY2015-16.Interestincometypicallyamountstolessthan1%oftotalannualrevenuesandprimarilyusedforcampuscontributionstocapitalimprovementssuchaslabimprovementsassociatedwithfacultyrecruitment.
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Chapter14Income&Recharge
Rateschargedforservicesaresubjecttoreviewandapprovalbyentitiesoutsidetheimplementingdepartments.Allcampusratesaresubjecttoreview.Chargesforgoodsorservicescanonlybeimplementedafterrateshavebeenapproved.TheIncomeandRechargeCommitteereviewsallratesexceptthosesetbyregulatorybodiessuchastheRegentsortheOfficeofthePresident.RatessubjecttocontrolthroughotherspecificUniversitypoliciesarealsonotsubjecttoreviewbytheIncomeandRechargeCommittee.Examplesofthesewouldbeparkingandstudenthousing.ThevastmajorityofratesarereviewedbytheIncomeandRechargeCommitteeandapprovedbytheExecutiveViceChancellorand/orChancellor.Perpolicyratesaretobereviewedonanannualbasis.Theterm“recharge”referstotheassessment(charge)byonecampusaccountforgoodsorservicestoanothercampusaccount.Theassessmentisbasedonanidentifiableunitofmeasure.Examplesincludewebsitedesignservices,useofresearchofequipment,andautomobilerentals.Theterm“income”referstorevenuegeneratedbycampusdepartmentsorunitsfromsalestonon-universityclientele(i.e.,non-departmentalsales).Examplesincludethechargingofaprivatesectorcompanyfortheuseofspecializedequipment,chargingofstudentsfortranscripts,andthechargingfaculty,staff,orstudentsforparking.RateProposalExpenseOutlineAsadepartmentbeginstodeveloparateproposalassociatedwithprovidingaservicetocampusandoff-campususerstheexpensecategorieslistedbelowshouldbeusedtohelpthepreparerdeterminetheexpensestobeconsidered.SeetheobjectcodelistingfoundontheGeneralAccountingportionoftheBusinessandFinancialServicesweb-siteforamoredetailedlistingofpotentialoperatingexpensesthatshouldbeconsideredwhendevelopingaprogrambudgetandrateproposal.
1) Salariesa. CareerEmployees(Subs0and1)b. CasualEmployees(Sub2)c. Notethatwhenemployeesareidentifiedaspartofarecharge/incomeaccount
theirpayrolldistributionshouldreflectthatassignmentandtheirpayrollandbenefitexpensesshouldbefundedfromtherecharge/incomeaccount.
2) Benefits(Sub6)
a. Benefitexpensesforeachemployeeidentifiedin#1above.b. Notebenefitexpensesvaryfromemployeetoemployeesoeachemployeecost
needstobereviewedaspartofthebudgetingprocess.
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3) Supplies&Expenses(Sub3)Include:a. Materials(Examples:GeneralOfficeSupplies,SpecializedForms)b. Communications(Telephone)c. Mail(postage,fedex,etc.)d. Travele. Trainingf. Rental(SpaceandEquipment)g. CopyingExpensesh. Subscriptionsi. Membershipj. MaintenanceAgreements(Equipment&Software)k. ComputerSoftwarePurchases(Word,Excel,OtherSoftware)
4) DepreciationofEquipment(Reserve)
a. Initialequipmentnecessarytoimplementprogramtypicallyfundedfromcoresupport,gifts,orcontractsandgrants.Equipmentdepreciationisthenchargedaspartofaratetocreateareplacementreserve.
5) Taxes/Assessments(SeeChapter11foradditionalinformation.Forcurrentassessment
ratesgotohttp://bap.ucsb.edu/budget/andselect“Assessments”fromthemenutab.a. Non-StateFundedAdministrativeSupport(NSFAS)ischargedagainstall
expensesassociatedwithanincomeaccount.b. UCOPTaxchargedasa%ofexpenses.c. EnterpriseTechnologyServices“CommonGoodFee”.
6) FinancialAid(Rare)
a. Incaseswhereservicesarechargedtoindividualsadepartmentmaywanttoensurethatthefeedoesn’timpactaccess.Inthesecircumstancesacomponentofthefeethateveryonepayscouldbedesignatedfor“financialaid”.Thedepartmentwouldthenchargethe“financialaidfund”incasesoffinancialneed.Apolicyneedstobeinplacethatclearlydefineshowthefinancialaidfundswouldbeaccessedandwhatapprovalswouldbenecessary.AsimilarprogramcouldalsobefundedfromtheNUDassessment(See#8below).
7) DepartmentOverhead
a. Attimes,centralcontrolpointstaffprovidesservicesinsupportofanincome/rechargeaccount.Thiscantakemanyformsbutisoftenintheformoffinancialmanagement,purchasingsupport,and/orpersonneladministration.Thesearerealworkloadimpactsandthecanbecoveredthroughanoverheadassessmentonrates.
b. Theseexpensesneedtobeidentifiedandcanberecoveredbyaddingapercentageincreasetotherates.Thepercentageiscalculatedbytakingthetotalindirectsupportserviceschargesdividedbythetotaldirectchargesofthe
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services.Theresultingpercentageisthenappliedtoeachoftherates.Thisapproachistypicallyusedinoperationslikeastorehousewhereconsumablesareinvolved.
c. Anyrevenuederivedfromthisapproachhastobeusedtooffsettheexpendituresofthearea/departmentprovidingtheservice.
d. Anoptiontorecoverthese“support”costsisalsotoincludethemaspartofthetotalprogramcostsandthenallocateafairsharetoeachoftheservicestobeprovided.Thenetimpactontheoverallexpensesandrevenuegeneratedwouldbezeroundereitheroption.
8) Non-UniversityDifferential(NUD)
a. Whenservicesareprovidedtonon-university(off-campus)userschargingofaNon-UniversityDifferential(NUD)isstronglyrecommended.
b. ThedepartmenthastheflexibilityindeterminingtheNUDamountbutthestartingpointistheapprovedcampusindirectcostrateusedforresearch.Thedepartmentcanmakeacaseforgoingupordownfromthatamount.
c. TherevenuegeneratedbytheNUDcanbeusedbythedepartmentand/orcontrolpointasadiscretionaryfundsourceanddoesnothavetobeusedtocoverprogramrelatedcosts.ThepotentialusesofNUDrevenueinclude:
i. Reserveforoperations–Giventhattheseareself-supportingprogramsitisprudenttohaveareservelargeenoughtocoveranycostsonanannualbasisthatmaybeinexcessofrevenuesgenerated.
ii. Purchaseofnewequipment–Thesefundscouldbeusedtosupplementthefundingavailableinthedepreciationreserveatanyonetimeorpurchaseadditionalequipmentinsupportoftheprogram.
iii. RateReduction–DecisioncanbemadetofundthecampusassessmentsfromtheNUDratherthanaspartoftherate.Thishastheeffectofloweringtheoverallratewhichmaybeareasonableuseofthesefundstomaintaintheratesnearmarketlevels.
iv. FinancialAid–Ratherthanincludefinancialaidwithintheratesadecisioncouldbemadetoset-asideaportionoftheNUDforthispurpose.
v. GraduateStudentSupport–Giventhatthisisadiscretionarysourceadecisioncanbemadetousethefundstosupplementexistingprogramswithinthedepartment/controlpointssuchasgraduatestudentsupport.
vi. DepartmentOverhead–AportionoftheNUDcouldbedesignated/returnedtothecontrolpoint(Dean’sOffice)tocoversupportservices.Inthiscase,aseparateoverheadadjustmentshouldnotbeincludedintheratetorecoversimilarcosts.
9) GeneralRateCalculationInformation
a. Expensesshouldbedeterminedforeachpotentialrateb. Ratesarecalculatedbydividingtotalcostsbytotalunitsofservice(hours,uses,
etc.)
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c. SeeIncomeandRechargeGuidelinesforexamplesofratecalculationsd. Eachratemustbeaccompaniedbyaratecalculationworksheete. Theratecalculationworksheetsthencanbeusedtosummarizethetotal
revenueandexpensebudgetsfortheentireprogram.f. Ratesshouldbeupdatedannualtoensurethattheywillresultinafully
fundedbudget.AdditionalinformationontheIncomeandRechargeProgramandcampusguidelinescanbefoundathttp://bap.ucsb.edu/budget/.ThecampusguidelinesarebasedonUCandcampuspolicy,FederalOMBguidelines,therecommendationsofaFaculty/AdministrationCommitteeappointedtoreviewtherechargeprocess,internalaudits,commentsfrombothprovidersandusersofrechargeservices,andinputfrommembersoftheIncomeandRechargeCommittee.Thereferencedguidelinesweredevelopedtosupplementexistingpoliciesandprocedures,aswellastobetterdefinetheresponsibilitiesofserviceprovidersandtheIncomeandRechargeCommittee.
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Chapter15FinancialAid
TheUniversity’sstudentfinancialaidprograms,guidedbypolicyadoptedbytheRegentsin1994,arecloselylinkedtotheUniversity’sgoalsofstudentaccessibilityandmeetingthestate’sworkforceneeds.Tomitigatetheimpactoftuitionandfeeincreases,aswellasincreasesinothereducationalexpenses,theUniversityusesaportionofthenewrevenuederivedfromtuitionandfeeincreasestosupportfinancialaid.Othersourcesoffunds,includingStatefundingforCalGrantsandfederalandprivatefunds,helpUCmeetitsfinancialaidgoals.Policies1) TheUniversityStudentAidProgram(USAP),theUniversity’sprimarysystemwide
institutionalaidprogram,isdesignedtoachievethegoalsarticulatedbytheRegentsinRegentsPolicy3201:TheUniversityofCaliforniaFinancialAidPolicy.
2) Institutionalfinancialaidforstudentsinprofessionaldegreeprogramsthatassess
ProfessionalDegreeSupplementalTuitionisaddressedinRegentsPolicy3103: PolicyonProfessionalDegreeSupplementalTuitionandRegentsandRegentsPolicy3104:PrinciplesUnderlyingtheDeterminationofFeesforStudentsofProfessionalDegreePrograms.
Seehttp://www.ucop.edu/student-affairs/policies/index.htmlforadditionalinformationonUCfinancialaidpolicies,guidelines,andprograms.UndergraduateFinancialAidAttheUndergraduatelevel,theprimarygoaloftheUniversity’sfinancialaidprogramistomaintainaffordabilityforallstudentsadmittedregardlessoftheirfinancialresources.Statedanotherway,UC’sgoalistoremainfinanciallyaccessibletoallacademicallyeligiblestudentssothatfinancialconsiderationsarenotanobstacletoastudent’sdecisiontoenrollattheUniversityofCalifornia.TheUniversity’ssystemwideundergraduatefinancialaidstrategyincludestwocorecomponents:1) TheEducationFinancingModel(EFM)-TheEFMisanintegratedframeworkthatis
usedtoassesstheUniversity’sroleinfundingitsfinancialaidprograms,todeterminehowfinancialaidisallocatedacrosscampuses,andtoguidecampusesinawardingaidtoindividualstudentsandfamilies. UnderEFM,astudent’sUCgranteligibilityisbaseduponthedifferencebetween(a)astudent’sin-statetotalcostofattendance(includingtuitionandfees,roomandboard,booksandsupplies,etc.)and(b)the
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combinationofareasonablecontributionfromparents,grantsfromFederalandStateprograms,andamanageablestudentself-helpcontributionfromworkand/orborrowing.
2) TheBlueandGoldOpportunityPlan-Introducedin2009,itisintended toprovidelow-
incomestudentswithaclearmessageregardingtheavailabilityofgrantsandscholarshipstocoverUCtuitionandfees.AwardsmadeundertheBlueandGoldOpportunityPlansupplement,ifneeded,UCgrantsawardedunderEFMtoensurethateligibleCaliforniaresidentstudentswhoseparentalincomeisbelowaspecifiedthreshold($80,000in2015-16)receivegrantandscholarshipsassistancethatfullycoversthestudent’sin-statemandatorysystemwidefees,subjecttoastudent’sfinancialneed.
TheUniversity’sfundinggoalforUSAPistoensurethatfundsareavailabletomeettheUniversity’sobligationsundertheBlueandGoldOpportunityPlanandtokeepstudents’self-helpexpectation–theamountthatUCexpectsstudentstocontributetowardsthecostoftheireducationthroughworkandborrowing–atmanageablelevelsacrossthesystem.FundingavailableforUSAPinagivenyearshouldtakeintoconsiderationfactorssuchasprojectedsystemwideenrollmentlevels;projectedin-statestudentexpensesateachcampus;students’projectedresourcesfromtheirparentsandFederalandStategrantprograms;StateappropriationstotheUniversityforfinancialaid;andtheavailabilityoffundsfromtuition,fees,andothersourcesinlightofothercriticalneedsforthosefunds.TheUniversity’spracticeinrecentyearshasbeentosetasideone-thirdofnewmandatorysystemwidefeerevenueforfinancialaid,whichhasprovidedsufficientfundstoachievetheUniversity’sfundinggoal.Thispracticeisevaluatedannuallyandmaybeadjustedasappropriateinresponsetoanymaterialchangestothefactorsdescribedabove.SourceandAllocationoffundsUndergraduateUSAPisfundedprimarilyfromundergraduateTuitionandStudentServicesFeerevenue(“return-to-aid”)andaportionoftheUniversity’sbaseStateGeneralFundbudget.Campuseshavethediscretiontosubstituteortoaugmentthisfundingwithalternativefundsources(e.g.,privategifts).CampusallocationsofUSAParebasedupontheestimatedUSAPfundingneededateachcampusto(a)meettheUniversity’scommitmentundertheBlueandGoldOpportunityPlanand(b)providesufficientfundingtoenablecampusestoofferfinancialaidpackagesthatreflectasimilarbaselinelevelofstudentself-helpfromwork
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andborrowingacrossthesystem.Allocationsreflect:1) AcommonpercentageofundergraduateTuitionandStudentServicesFeerevenue
setasideateachcampustofundundergraduateUSAP;
2) AllocationsoftheStateGeneralFundportionofUSAPacrosscampusesbaseduponeachcampus’sremainingneedforUSAP;
3) ReallocationofanyTuitionrevenuegeneratedatacampusunder#1abovethat
exceedsthecampus’sestimatedUSAPneed,tobedistributedtoother campusesaccordingtothosecampuses’estimatedremainingUSAPneed;and
4) ForplanningpurposestheannualincreaseinundergraduateUSAPfundingisequalto
33%oftherevenueincreaseassociatedwithstudentgrowthandanyfeeincrease.GraduateStudentFinancialAidAtthegraduatelevel,theRegents’financialaidpolicycallsupontheUniversitytoattractadiversepoolofhighlyqualifiedstudentsbyprovidingacompetitivelevelofsupportrelativetothecostofotherinstitutions.ThiscompetitivecontextreflectsthefactthatgraduatestudentenrollmentistiedmostdirectlytotheUniversity’sresearchmissionandhelpsthestatemeetitsacademicandprofessionalworkforceneeds.Graduatestudentsreceivesupportinawidevarietyofforms,includingmerit-basedfellowships,need-basedgrants,teachingassistantships,andresearchassistantships,andfromawidevarietyofsources.GraduateUSAPfundingisusedinconjunctionwithothersourcesofinstitutionalandextramuralfundstoprovidethesediversetypesofsupport,whichwillvarybaseduponfactorssuchasastudent’sfieldofstudyanddegreeobjective.GraduateFinancialAidFundingLevelsEachyear,campusesareexpectedtosetasideaminimumpercentageofTuitionandStudentServicesFeerevenueforgraduatestudentsupport.1) Thepercentageishigherforgraduateacademicstudentsthanitisforstudentsin
professionaldegreeprograms;consistentwiththehigherfundinglevelsneededtosupportgraduateacademicstudents–particularly thoseindoctoralprograms.
2) Thepercentageisdeterminedbyaugmentingtheprioryearsystemwidegraduate
USAPbudgetsforgraduateacademicandprofessionaldegreestudentsbyapercentageofanynewmandatorysystemwidefeerevenueattributabletothosestudents.Theadditionalfundingisintendedtohelpoffsettheimpactofenrollmentgrowthandincreasesinmandatorysystemwidechargesonacampus’sabilityto
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providecompetitiveoffersofstudentfinancialsupport.3) ThesenewUSAPbudgetsarethenusedtocalculateupdatedaveragereturn-to-aid
percentagesforgraduateacademicandprofessionaldegreestudentsforthefollowingyear.Theseupdatedaveragereturn-to-aidratesserveastheminimumpercentageofTuitionandStudentServicesFeerevenuetobeusedforgraduatestudentsupport.
SourceandAllocationofFundsGraduateUSAPfundsarederivedfromaportionofmandatorysystemwidechargespaidbygraduatestudents,asdescribedabove.
GraduateUSAPfundsarenotallocatedacrosscampuses.Rather,eachcampusisexpectedtouseaspecifiedminimumpercentageofTuitionandStudentServicesFeerevenueattributabletoitsgraduateacademicandprofessionaldegreestudentsforgraduatestudentfinancialsupport.Forplanningpurposestheannualincreaseisassumedtobe50%oftherevenueincreaseassociatedwithgraduatestudentgrowthandchangesinfeelevels.ProfessionalDegreeSupplementalTuition(PDST)FinancialaidforstudentsenrolledinprogramsthatassessProfessionalDegreeSupplementalTuition(PDST)isintended(1)toensurethatthehighercostsoftheseprogramsarenotaninsurmountablebarriertoaccessforstudents,and(2)tominimizefinancialbarrierstothepursuitofcareersinpublicservice.Eachprofessionaldegreeprogramdevelopsitsowncomplementof financialaidawards,whichmayincludeelementssuchasneed-basedgrants,merit-basedfellowships,and/orloanrepaymentassistanceforgraduatesoftheprogram.SourceofFundsandAllocationPursuanttoRegentsPolicy3103:PolicyonProfessionalDegreeSupplementalTuition,programsareexpectedtosupplementtheirprogramseachyearbyanamountequivalenttoatleast33percentofnewPDSTrevenue,orbyanamountnecessarytoensurethatfinancialaidresourcesareequivalenttoatleast33percentofallPDSTrevenuefortheprogram.ProgramsareexpectedtosupplementfundingbyanamountequivalenttoaspecifiedpercentageofPDSTrevenue;programsmayusePDSTrevenueorotheravailablesourcesoffunds(e.g.,privategifts)tomeetthatfundingexpectation.FinancialaidfundsattributabletoPDSTrevenuearenotallocatedacrosscampuses.Rather,eachprogramisexpectedtomeetitsownminimumfundingrequirementasdescribedabove.
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Appendix1CommonCampusBudgetandFinancialTerms
Onadailybasismanytermsareusedduringthediscussionoffinancialtransactions.Thelistbelowisintendedtodefinethoseterms,inhopefullyclearandconciselanguage.Forthoseinterestedinmoredetaileddescriptions,anumberofthetermsalsohavealinktootheravailableresources.Itisanticipatedthatadditionaltermsanddefinitionswillbeaddedonaregularbasis.Account-Accountnumbersareusedtoidentifyhowfundsarebudgetedandexpendedandhowincomeiscollected.Accountnumbersare6digitslong.Thefirsttwodigitsindicatetheaccountfunctionormajorexpenditurecategory.Appropriation-Anamountallocatedforexpenditureforadepartment,unitoractivitytoidentifyalimitontheamountthatcanbespent.Anappropriationcaninclude“permanently”budgetedfunds,carry-forwardfunding,and/orone-timeallocations.BudgetedFunds-Typicallyreferstopermanentlybudgetedactivitiesanddoesnotincludetemporaryorone-timeallocationsorsuchthingsasextramuralcontractsorgrantactivityandcurrentyeargifts.CampusBasedFees–Thesearefeesinitiatedandapprovedbystudentsforaspecificpurposeviaastudentreferendum,andlaterapprovedbyTheRegents.Thefeesaremandatoryasaconditionofenrollmentandcoveravarietyofstudent-relatedexpenses.Therevenuesmustbeusedconsistentwiththetermsandlanguageofthereferendum.CapitalProject–Aprojectinvolvingthepurchase,capitallease,orgroundleaseofrealproperty;aconstructionproject;oracapitalequipmentpurchase.Theseincludebothminor($35,000to$750,000)andmajorcapitalimprovements(greaterthan$750,000).ChartofAccounts–Anumberingschemetoassistinidentifyinghowfundsarereceivedandhowfundsareused.ItenablestheUniversitytoreportinformationtoavarietyofexternalandinternalsources.Thisincludesinformationoncampuslocation,account,fund,subaccount,andobjectcodeandisoftenreferredtoasLAFSO.CoreFunds-ComprisedofStateGeneralFunds,UCGeneralFunds,mandatorystudentfees,andoverheadfunds,thesefundsprovidepermanentsupportforthecoremissionactivitiesoftheUniversity:instruction,research,andpublicservice,aswellastheadministrativeandsupportservicesneededtocarryouttheseactivities.CourseMaterialFees-Thesefeescovercostsspecifictoanacademiccourse,suchasmaterialstobeusedinastudioartsclassortravelcostsforanarcheologicaldig.Theyarenotmandatoryasaconditionofenrollmentandareonlychargedtostudentsandotherswhentheyactually
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usetheservice(i.e.applicationfees,coursematerialfees,labusefees,etc.)ThefeesaresetbytheChancellorbutmaynotexceedtheactualcostperstudentofthematerialsandservicesprovidedforthecourseinquestion.Therevenuefromthesefeesisusedtosupporttheserviceprovided.Debt–Anamountowedforfundsborrowed.Debtallowsinstitutionstoplanandexecutemajorcapitalprogramsbyprovidingafinancingmechanismthatspreadscashflowobligationsoverlongerperiodsoftime.DebtCapacity-Ameasureoftheamountofdebtthatcanincurataparticularcreditratinglevel;itservesasameasureofthecapitalmarkets’assessmentofaninstitution’sfinancialstrength.ThecreditratingsoftheUniversity’sbondsarerelevantinthattheydirectlyimpactthecostoffunding:thehigherthecreditrating,thelowerthecostofborrowing(i.e.,theyieldtheUniversityhastopayinvestorsofitsbonds)andviceversa.DirectCosts–Referstoexpendituresthatcanbedirectlychargedtoaspecificcontract,grant,orprogram.Encumbrance-Afirmcommitmentorobligationplacedagainstfundsofadepartment,intheformofpurchaseordersoragreements,tocoveralaterexpenditurerequiredwhengoodsaredeliveredorservicesrendered.Encumbrances(orliens)areusedtoreflectthosecommitmentsintheaccountingsystemandattempttopreventoverspending.Expenditures-Referstoactualexpenditures(spending)ofallfundsbudgetedandnon-budgeted.FiscalYear-FortheUniversityofCaliforniathefiscalyearbeginsJuly1andendsthefollowingJune30.FullAccountingUnit(FAU)-Identifiesthelocation,account,fund,sub-account,andobjectcodeofaspecifictransaction.Functions-TheUniversityclassifiesitsactivitiesandappropriatefundsaccordingtomajorfunctions.Thefirsttwodigitsofthesix-digitexpenditureAccountCodeidentifythesefunctions.SeeAppendix#2fordescriptionsofindividualfunctions.Funds-Afundisestablishedtocarryonspecificactivitiesorattaincertainobjectivesintheoperationofaninstitution,eitheratthediscretionofthegoverningboardoraccordingtoregulations,restrictions,orlimitationsimposedbysourcesoutsidetheinstitution.Thus,thecharacteristicsthatdistinguishesonefundfromanotheriswhatitcanbeusedforanditssource.Garamendi-CaliforniaGovernmentCode,Section15820.21,alsoknownasthe“Garamendi”BondAct,wassignedintolawbytheGovernoronJuly10,1990.Thisactallowsfinancingfor
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theacquisitionofland,buildings,relatedinfrastructureandequipment,andtheconstruction,renovation,andequippingofscientificresearchfacilitiesandrelatedinfrastructureonsitesownedorleasedfortheUniversityofCalifornia.Thefinancingandallbuildingmaintenance(OMP)aretobefundedfromtheincreaseinFederalindirectcostrecoveryduetothenewresearchresultingfromtheproject.GeneralLedger-TheCampusGeneralLedgeristheofficialfinancialrecordforthecampus,andfromitallofficialcampusaccountingreportsarecreated.Itincludesinformationonexpenditures,appropriations,andliens.Income-Revenuegeneratedfromsalestonon-university(department)clientele.Forexample,asciencedepartmentatUCSBhasalaboratorythatalocalresearchcompanyuses,thusgeneratingincomeforthedepartment.ThelargestgeneratorsofincomearetheUniversityCenter,studenthousingprogram,andparkingservices.IndirectCosts-Coststhatcannotbereadilyidentifiedwithorrelatedtoaspecificenterprise.Thesecostsarerelatedtotheservicesgenerallyprovidedwithoutchargebycentralcampusunits.Thisincludesbuildingandequipmentuse,maintenanceandoperationofplant,departmentaladministration,generaladministration,studentservicesandlibrary.Lien-seeEncumbrance.MandatoryStudentFees–FeesapprovedbyTheRegentsandchargedtoallUCstudents.SeeStudentServicesFeeandTuitionformorespecifics.Non-residenttuitionisalsoamandatoryfeeforasubsetofUCstudents.MeritIncrease–Salaryincreasesforcareeremployeesonthebasisofindividualperformanceandimprovementinperformance.MinorCapitalImprovementProject-Capitalimprovementscostingover$35,000andnotmorethan$750,000fromallsources.ThisthresholdissetbytheStateandmaybeadjustedfromtimetotimebyUCOPafterconsultationwiththeState.TheUniversityhistoricallyhaskeptitsdefinitionofminorcapitalimprovementprojectsinlinewiththatoftheState.MajorCapitalImprovementProject-Majorcapitalimprovementprojectsarecapitalimprovementscostingover$750,000fromallsources.ThisthresholdissetbytheStateandisadjustedfromtimetotime.TheUniversityhistoricallyhaskeptitsdefinitionofmajorcapitalimprovementprojectsinlinewiththatoftheState.NonresidentTuition–AmandatoryfeechargedtoundergraduateandgraduatestudentswhoarenotresidentsofCaliforniawiththefeelevelsetbyTheRegents.Nonresidentstudentspaythisfeeinadditiontoothermandatorystudentfees.Non-StateFundedAdministrativeSupport(NSFAS)–Assessment(tax)ofnon-state-fundedunits
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fortheirfairshareportionsofcampusinfrastructureand“overhead”costs.Unitsassessedinclude:ExtendedLearningServices,Housing,Parking,etc.ObjectCode–four-digitcodeusedforthenaturalclassificationofexpendituresbyobject,i.e.,it“identifiesthatwhichisreceivedinreturnfortheexpenditures.”Usedtoaccumulateexpendituresfortheannualfinancialreportandforspecialstudiesofexpenditures.Everyfinancialentrytoexpenditureaccountsmusthaveanobjectcode.Departmentsshouldavoidclassifyingcostsas“miscellaneousexpenses”andusingobjectcode7200.One-Time–Referstotheallocationoffundsforatemporaryorone-timeexpense.OngoingRequests-Arequestforanaugmentationtotheannualbasebudgetofagivendepartmentforaspecificongoingexpense.Ifapproved,theexpensewillbecomeapermanentlybudgeteditem.OpenProvision-Referstoabudgetedunfilledposition.OperatingBudget-Theamountoffundsallocatedtoadepartment,unitorarea.Thesefundsmayeitherbepermanentlyortemporarilybudgeted.SeeAppropriation.Overhead–AnassessmentonthedirectcostsincurredoncontractsandgrantstoreimbursetheUniversityforrelatedcostsof:GeneralAdministration,andfacilityoperations.Alsoknownas“IDC,”forindirectcosts.Permanent-Permanentfundsarebudgetedfunds;theyappearautomaticallyaspartofadepartment’sallocationatthebeginningofthefiscalyear.ProvisionAccount-Holdingaccountuseduntilfinalallocationdecisionsaremade.Afterdecisionsaremadefundsareallocatedfromaprovisionaccountintoanexpenditureaccount.RangeAdjustment–Universitysalaryrangesareperiodicallyadjustedtoreflectcomparablepayforsimilarworkandtomaintainparitywithcomparableinstitutions.FundingforsalaryrangeadjustmentsisnormallyprovidedbytheStateofCaliforniaforGeneralFundemployees;non-GeneralFundedactivitiesarerequiredtocoverincreasesfromwithintheirfundsources.Recharge-Theassessmentandcollectionbyonecampusaccountofachargeforgoodsand/orservices,basedonanidentifiableunitofmeasure,furnishedtoanothercampusaccount.Thisincludesfacilitiesmanagement,transportation,communications,etc.Reclassification–Referstoanadjustmentofthesalaryrangeforapositionorrelatedpositionswhentherehavebeensignificantchangesinthedutiesandresponsibilitiesofsuchpositions.Fundingofreclassificationsistheresponsibilityoftheindividual’sdepartment.StudentServicesFee(SSF)–Thisisasystemwidemandatoryfee,andthefeelevelissetbyThe
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Regents.TheStudentServicesFeeisusedtosupportavarietyofstudentserviceactivitiessuchascounselingandcareerguidance,culturalandsocialactivities,andstudenthealthservices.TheStudentFeeAdvisoryCommittee(comprisedofstudents,faculty,andstaff)providesadvicetotheVCStudentAffairsandtheChancellorontheallocationofthesefunds.Self-Supporting–Operationsthataredependentuponuserfeesandthedemandforthoseservices.StudentFees–RevenuefromstudentfeesisamajorsourceoffundingfortheUniversity’scoreeducationalprogram,providingfundingtosupplementStatefundingandothersourcesandhelpsupportbasicoperations.StudentsattheUniversityofCaliforniapaymandatory,campusbased,andcoursematerialfees.Eachofthesefeeshavedifferentpurposesandapprovalprocesses.StudentFinancialAid-Fundingprovidedtostudentsintheformofscholarship,fellowships,grants,loans,andwork-studyjobstoassistinmeetingthecostoftheireducation.Financialaidcomesfromthefederalgovernment,thestate,theuniversityandprivateagencies.Sub-account-TheexpenditureaccountsofCurrentFundsandPlantFundsarebrokendownontheledgerbysubaccount(orsub-budget),whichrepresentsthegeneralobjectoftheexpenditureswithinaspecificaccountsuchassalaries,benefits,andsupplies.Thesubaccountclassificationpermitscloserbudgetarycontrolandfacilitatesthepreparationofbudgetaryandfinancialreports.Temporary–Referstoanallocationoffundsonaone-timebasisoranexpensethatoccursinasinglefiscalyear(i.e.notpermanentorongoing).TransferofExpense–Allowsforthetransferofnon-payrollexpendituresrecordedinthegeneralledger.Theexpensemustbealegitimatechargeagainstthefundandsubtowhichtheexpenseistransferred.TransferofFunds-Transferofanappropriationfromoneaccountorsub-accounttoanother.TurnoverSavings–Turnoversavingsresultwhenapositionbecomesvacant.Itrepresentsthedifferencebetweenthelastsalarypaidtoanemployeeandthenewopenprovisionbudgetedamount.Openprovisionsforstaffemployeesarebudgetedat25%intotherangeoftheposition.Tuition(formerlyEducationalFee)–Thisisasystemwidemandatoryfee.Firstestablishedin1970andchargedtoallregisteredstudents,providesgeneralsupportfortheUniversity’soperatingbudget,includingcostsrelatedtogeneralcampusandhealthsciencesfacultyandinstructionalsupport;librariesandotheracademicsupport;studentservices;institutionalsupport;andoperationandmaintenanceofplant.Tuitionrevenueisalsousedtoprovidestudentfinancialaid.
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Appendix2FunctionDescriptions
TheUniversityclassifiesitsactivitiesandappropriatefundsaccordingtomajorfunctions.Thefirsttwodigitsofthesix-digitexpenditureAccountCodeidentifythesefunctionsandcorrespondstothefirsttwodigitsoftheUAScode.FunctionCodesareshownbelow:40 Instruction&ResearchThegeneralcampusinstructionandresearch(I&R)budgetincludesmostofthedirectinstructionalresourcesassociatedwiththeschoolsandcollegeslocatedontheUCgeneralcampuses.Themajoritemsinthisbudgetarefacultyandteachingassistants,instructionalsupport,andemployeebenefits.41 SummerSessionsUniversityofCaliforniaSummerSessionsareself-supportingprogramsofferingcoursesbothfordegreecreditandforselectedspecializedprograms.Thesummerdegreeprogramsofferarangeofinstruction,witheachcampusdeterminingitsowncourseofferings.43 AcademicSupport-OtherIncludedinthecategoryAcademicSupport-Otherarevarioussupportactivitiesthatareoperatedandadministeredinconjunctionwithschoolsanddepartments.Thesepartiallyself-supportingactivitiesprovidebasicclinicalandothersupportessentialtoinstructionalprograms,andcontributesignificantlytothequalityandeffectivenessofhealthsciencesandgeneralcampuscurricula.Statesupportisanessentialpartoftheincomeoftheclinicalactivities.ExamplesofsuchactivitiesatUCSBincludePhysicsStores,Vivarium,andChemistryStores.44 ResearchTheUniversityisdesignatedinthe1960CaliforniaMasterPlanforHigherEducationas“theprimaryState-supportedacademicagencyforresearch.”Asoneofthenation’spreeminentresearchinstitutions,theUniversityprovidesauniqueenvironmentinwhichleadingscholarsandpromisingstudentsstrivetoexpandfundamentalknowledgeofhumannature,society,andthenaturalworld.60 LibrariesTheUniversityofCalifornialibrariesareavitalacademicresource.Theyprovidebooks,documentarymaterials,andinformationrequiredbystudentsandfacultyforeffectivestudyandresearch.Inaddition,thelibrariesprovideservicestostudentsandfacultyofotherCaliforniacollegesanduniversitiesandtocitizensinthesurroundingcommunities.
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61 UniversityExtensionUniversityExtensionisaself-supportingoperationanditsofferingsaredependentuponuserdemandandabilitytopayfees.ExtensionprogramsareofferedbyeverycampusexceptSanFrancisco.Thereareseveralstatewideprograms,includingContinuingEducationoftheBar,theExtensionMediaCenter,andIndependentStudy,whichprovidescorrespondencecoursesthroughouttheworld.Two-thirdsoftheExtension’sofferingsaredesignedtoservethecontinuingeducationalneedsofprofessionals.62 PublicServicePublicserviceincludesabroadrangeofactivitiesorganizedbytheUniversitytoservelocalcommunities,studentsandteachersintheschoolsandcommunitycolleges,andthepublicingeneral.CooperativeExtensionistheUniversity’slargestpublicserviceprogram.Campuspublicservice,whichisalmostcompletelysupportedbyuserfeesandothernon-Statefundssources,includessuchactivitiesasartsandlectureprogramsandcommunityserviceprojects.TheUCSBArtsandLecturesProgramisanexampleofanactivityidentifiedwithinthisfunction.64 Operation&MaintenanceofPlantThisprogramprovidesfortheoperationandmaintenanceof37.5milliongrosssquarefeetofState-supportedbuildingsandmorethan2,200acresofimprovedgroundsatUCcampusesandtheagriculturalfieldstations.Programresourcesarededicatedtothemaintenanceofreasonablestandardsofrepair,safety,productivity,utilitiesservice,cleanliness,andappearanceforUniversityfacilitieswithacurrentreplacementvalueinexcessof$5.1billion.68 StudentServicesStudentservicesprogramsandactivitiescontributetostudents’intellectual,cultural,andsocialdevelopmentoutsideoftheformalinstructionalprocess.Examplesofstudentservicesincludecounselingandcareerguidance,studenthealthservices,socialandculturalactivities,admissionandregistraroperations,andfinancialaidandloancollectionadministration.66 GeneralAdministration&72InstitutionalSupportInstitutionalSupportincludescampusandsystemwidemanagementandconsistsoffivesubprogramareas:ExecutiveManagement,FiscalOperations,GeneralAdministrativeServices,LogisticalServices,andCommunityRelations.Eachofthesubprogramareascontainsanumberofactivities,suchastheofficesoftheChancellors,ViceChancellor,andplanningandbudgetwithinExecutiveManagement;accounting,audits,andcontractandgrantadministrationwithinFiscalOperations;computercenters,informationsystems,andpersonnelwithinGeneralAdministrativeServices;purchasing,maildistribution,andpolicewithinLogisticalServices;anddevelopmentandpublicationswithinCommunityRelations.76 AuxiliaryEnterprisesAuxiliaryenterprisesarenon-instructionalsupportservicesprovidedprimarilytostudentsinreturnforspecificcharges.Auxiliaryenterprisesgeneratesufficientrevenuestocoveralldirectandindirectoperatingcosts.Includedwithinauxiliaryenterprisesareresidenceanddininghalls,parkingoperations,andbookstores.NoStatefundsareprovidedforauxiliaryenterprises.
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Theannualbudgetisbaseduponincomeprojections.Anybudgetincreasesarematchedbycorrespondingincreasesinrevenue.78 StudentFinancialAidStudentsattheUniversityofCaliforniareceivescholarships,fellowships,grants,loans,andwork-studyjobstoassisttheminmeetingthecostoftheireducation.FinancialassistancecomesfromtheFederalgovernment,theUniversity,theState,andprivateandoutsideagencies.80 ProvisionsforAllocationProvisionsforallocationserveasatemporaryrepositoryforcertainfundsuntilfinalallocationdecisionsaremade.Eachyear,fundsreceivedforsalaryrangeadjustmentandmeritincreases,employeebenefitincreases,andpriceincreasesareheldinprovisionaccounts,eitherattheOfficeofthePresidentoronthecampuses,pendingdecisionsregardingtheirallocation.Salaryrangeadjustmentfunds,asanexample,arehelduntiltheappropriatesalaryincreaseshavebeennegotiatedordeterminedforthevariousclassesofemployees.Afterdecisionsaremade,fundsareallocated,first,fromanOfficeofthePresidentprovisionaccounttocampusprovisioncampusaccounts,andthentodepartmentswherethesalariesofthepositionstoberange-adjustedarebudgeted.
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Appendix3Fund Information
Endowments-Fundsderivedfromgiftsandbequeststhatstipulatethattheprincipalmustremainintactandthatonlytheincomegeneratedthroughinvestmentmaybeexpended.Endowmentfundsarefurtherclassifiedaccordingtorestrictionsontheuseofincome,suchasforstudentaid,libraries,orforspecificdepartments.IndirectCostRecoveryorOverhead–Referencesfunds(seebelow)associatedwiththechargingofoverheadprimarilyagainstcontractandgrants.Thesefundsreimbursethecampusforcostsoffacilitiesandadministrationassociatedwitharesearchactivity,butthatcannotbeidentifiedassolelybenefitingaparticularcontractorgrant.Thisincludesbuildingandequipmentuse,maintenanceandoperationofplant,departmentaladministration,generaladministration,studentservicesandlibrary.Thisfundgroupingincludes:
1) Garamendi-CaliforniaGovernmentCode,Section15820.21,alsoknownasthe“Garamendi”BondAct,wassignedintolawbytheGovernoronJuly10,1990.Thisactallowsfinancingfortheacquisitionofland,buildings,relatedinfrastructureandequipment,andtheconstruction,renovation,andequippingofscientificresearchfacilitiesandrelatedinfrastructureonsitesownedorleasedfortheUniversityofCalifornia.Thefinancingandallbuildingmaintenance(OMP)aretobefundedfromtheincreaseinFederalindirectcostrecoveryduetothenewresearchresultingfromtheproject.
2) Contract&GrantOverhead(Fund#69750)-ContractandGrantOverheadFundsare
derivedfromtheindirectcostschargedtoFederalcontractsandgrants.Thefirst19.9%ofeachcampuses'indirectcostrecoveryisallocatedtothisprogram.Thesefundsaretypicallydistributedtodepartmentsandadministrativeunitswhoseresourcesareusedinobtainingandadministeringextramuralfunds.UCSBofficesthathavepermanentallocationsofthesefundsincludeAccounting,OrganizedResearch,EnvironmentalHealthandSafety,AnimalResourceCenter,Purchasing,InternalAudit,BusinessandFinancialServices,andHumanResources.
3) OpportunityFunds(Fund#07427)-TheUniversityOpportunityFundwasestablishedin
March1970bytheRegents.ThefundconsistsoftheUniversity’sshare(45%)oftheindirectcostrecoveryreceiptsofFederalcontractsandgrantsafterdeductingallocationsforContractsandGrantsAdministrationandtheNeuro-PsychiatricInstitutes.ThefundisusedtosupporthighpriorityprogramsforwhichStatefundingisnotavailable,includinginstruction,research,institutionalsupport,anddeferredmaintenance.
GeneralFunds–ThecombinationofStateFundsandUCGeneralFundsarecommonlyreferredtoasGeneralFundsandusedtosupportthegeneralmissionoftheUniversity.
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1) StateFunds–PartofGeneralFunds,thesearefundsprovidedbytheStateandspentwithintheoverallconstraintsoftheapprovedStatebudget.
2) UCGeneralFunds–InadditiontoStateGeneralFundsupport,certainotherfund
sourcesareunrestrictedandexpectedtoprovidegeneralsupportfortheUniversity’scoremissionactivities,basedonlongstandingagreementswiththeState.CollectivelyreferredtoasUCGeneralFundstheseincludeaportionofindirectcostrecoveryonfederalandStatecontractsandgrants,nonresidentsupplementaltuition,feesforapplicationforadmission,andinterestonGeneralFundbalances.
StudentFees-ThemajorsourceoffundingfortheUniversity’scoreeducationalprogram,providingfundingtosupplementStatefundingandothersourcesandhelpsupportbasicoperationsbothacademicandstudentsupportservices.StudentsattheUniversityofCaliforniapaymandatory,campusbased,andcoursematerialfees.Eachofthesefeeshavedifferentpurposesandapprovalprocesses.Inaddition,UniversityExtensionandSummerSessionschargefeestosupporttheirprograms.Thisfundgroupingincludes:
1) Tuition(formerlyEducationalFee)–Thisisasystemwidemandatoryfee.Firstestablishedin1970andchargedtoallregisteredstudents,providesgeneralsupportfortheUniversity’soperatingbudget,includingcostsrelatedtogeneralcampusandhealthsciencesfacultyandinstructionalsupport;librariesandotheracademicsupport;studentservices;institutionalsupport;andoperationandmaintenanceofplant.Tuitionrevenueisalsousedtoprovidestudentfinancialaid.
2) StudentServicesFee(SSF)–Thisisasystemwidemandatoryfee,andthefeelevelisset
byTheRegents.TheStudentServicesFeeisusedtosupportavarietyofstudentserviceactivitiessuchascounselingandcareerguidance,culturalandsocialactivities,andstudenthealthservices.
3) NonresidentTuition–Amandatoryfeechargedtoundergraduateandgraduate
studentswhoarenotresidentsofCaliforniawiththefeelevelsetbyTheRegents.Nonresidentstudentspaythisfeeinadditiontoothermandatorystudentfees.
4) CampusBasedFees–Thesearefeesinitiatedandapprovedbystudentsforaspecific
purposeviaastudentreferendum,andlaterapprovedbyTheRegents.Thefeesaremandatoryasaconditionofenrollmentandcoveravarietyofstudent-relatedexpenses.Therevenuesmustbeusedconsistentwiththetermsofthereferendum.
Income-Revenuegeneratedfromsalestonon-universityclientele.Forexample,asciencedepartmentatUCSBhasalaboratorythatalocalresearchcompanyuses,thusgeneratingincomeforthedepartment.AuxiliaryEnterprises(StudentHousing,UniversityCenter,Parking,etc.)tendtobethelargestgeneratorsofincomeonthecampus.Therevenuetypicallygoestosupporttheoperationsandcapitalneeds,includingdebt,oftheseprograms.
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Recharge-Theassessmentandcollectionbyonecampusaccountofachargeforgoodsand/orservices,basedonanidentifiableunitofmeasure,furnishedtoanothercampusaccount.Thisincludesfacilitiesmanagement,transportation,communications,etc.Itisverycommonforarechargeaccounttoalsohaveanincomecomponent.
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Appendix4Sub-AccountDescriptions
TheexpenditureaccountsofCurrentFundsarebrokendownontheledgerbysub-account(orsub-budget),whichrepresentsthegeneralobjectoftheexpenditureswithinaspecificaccount.Thesubaccountclassificationpermitscloserbudgetarycontrolandfacilitatesthepreparationofbudgetaryandfinancialreports.ThesubaccountclassificationsofCurrentFundsare:Sub0-AcademicSalariesSub1-Staff(Non-Academic)SalariesSub2-GeneralAssistanceSub3-SuppliesandExpenseSub4-EquipmentandFacilitiesSub5-SpecialItems-intheContractandGrantarea,Sub5usuallyidentifiesTravelSub6-EmployeeBenefits,exceptinFunction78-StudentAid,whereitidentifiesTuitionandFees.Sub7-SpecialItemsSub8-UnallocatedFundsSub9-RechargestoOtherDepartmentsSubY-Overhead
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Appendix5SALARY&BENEFITRELATEDTERMS
Benefits–Aspartofthetotalcompensationpackageforfacultyandstaff,theUniversityoffersretirement,healthandwelfarebenefits.ThecostsofthesebenefitsarefundedbytheUniversityand/orinconjunctionwithemployeecontributions.Includedamongthesebenefitsare:
1) Pension–Contributionsarepaidbyboththeemployerandtheemployee,
2) HealthandWelfareBenefits–Paidbyboththeemployerandemployee.RatesaredrivenbynegotiationswithUC’shealthplanproviders.
ContractualWageAdjustments–Theseincreasesareestablishedthroughcollectivebargainingagreements.EquityAdjustments–Thesehelpbringindividualsalariestoacompetitivemarketlevelforindividualemployeesinjobswithsignificantexternalmarketgapsand/orinternalequityissues,oraddressrecruitmentandretentionchallenges.Theseadjustmentsarenotfundedcentrallyandwhenimplemented,arethefundingresponsibilityofindividualdepartments.Merits–Theseincreasesforfacultyandunrepresentedstaffprovideamechanismtorecognizeandrewardrelativelevelsofperformance.Increasesaregrantedtoemployeesonthebasisofindividualperformanceandimprovementinperformance.Meritincreasesareneverautomaticandarebasedondemonstratedcontributions.RangeAdjustments-Universitysalaryrangesareadjustedtoreflectcomparablepayforsimilarworkingovernmentandprivateindustryor,asinthecaseforacademicsalaries,tomaintainparitywithcomparableinstitutions.FundingforsalaryrangeadjustmentsisnormallyprovidedbytheStateofCaliforniaforGeneralFundemployees;non-GeneralFundedactivitiesarerequiredtocoverincreasesfromwithintheirfundsources.Union-relatedwageincreasesrepresentchangestounion-relatedwagescalesandaregenerallyrelatedtoindustry-widewageratesfortheseclasses.Union-relatedwageincreasesforGeneralFundactivitiesarefinancedfromrangefundswhenthereisageneralsalaryrangeadjustmentforStateemployees.Ifthereisnogeneralsalaryrangeadjustment,thecostofnegotiatedwagerateincreasesifapprovedmustbeabsorbedwithintheapprovedbudgets.Reclasses-Referstoanadjustmentofthesalaryrangeforapositionorrelatedpositionswhentherehavebeensignificantchangesinthedutiesandresponsibilitiesofsuchpositions.Currentpolicyprovidesthatreclassificationsmaybegrantedatanypointinthefiscalyearwhenthedutiesandresponsibilitiesofaparticularpositionshallhavebeendeterminedtomeetestablishedrequirementsandspecificationsofaclassificationinahigherorlowersalaryrange.
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UnlikemeritincreasesforwhichtheStateprovidesspecificfunding,fundsforreclassificationsarewhollygeneratedwithintheUniversity.WhiletheStaterecognizesthecostsofpositionreclassifications,itdoesnotallocatefundsspecificallyforreclassificationsintheannualbudgetprocess.ReclassificationsofGeneralFundpositionsareprimarilyfundedfromstaffsalaryturnoversavingsthataregeneratedannuallyonJuly1.TheseJuly1savingscomprisemeritfundsawardedinprioryears,whicharereleasedthroughreductionofvacatedstaffpositionstominimumstepand,toalesserextent,fromdownwardreclassifications.TurnoverSavings-Differencebetweenthelastsalarypaidemployeeandthenewopenprovisionamountonprovisionsfundedfrombudgetedfunds.Turnoversavingsresultwhenareplacementishiredatalowersalarylevelthanthepreviousincumbent.BeginninginFY2014-15staffturnoversavings,bothcurrentyearandongoing,isretainedatthedepartmentanddoesnotneedtobereturnedtoacentralcampusprovisionaccount.Thesesavingscanbeusedtosupportotherdepartmentalneeds.