Taking the Mystery Taking the Mystery Out of Community Out of Community

College FinancesCollege FinancesRichard Becker,

Palm Beach State College

Keith Houck,Valencia College

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What doWhat do Business Officers Business Officers

think are the issues? think are the issues?

Most Important Issues Most Important Issues Confronting CollegesConfronting Colleges

• Provide both affordability and quality

• Reductions in state funding (both for

operations and capital)

• State imposed limits on tuition and fees

• Potential cuts in federal student aid

• Becoming even more efficient and effective

Various Strategies Various Strategies

• Increasing enrollment

• Increasing the use of part-time faculty

• Cutting underperforming programs

• Outsourcing non-academic services

• Public/Private Partnerships

It’s none of your business, It’s none of your business, or is it?or is it?

• Do you understand the business operations of your College?

• Do you receive a financial report each meeting?• Are key items and trends brought to your attention?• Is your CFO’s phone number on your speed dial?

You want to learn more about the business operations but don’t even know the questions to ask….

Questions for the CFOQuestions for the CFO• What are the various funds of the College and for

what each is used?• What are the revenue sources for each fund?• What are the different functions of the college and

how do we relate to other comparable institutions in functional expenditures?

• What is a fund balance? How much do we have in fund balance? What is it’s purpose? Is this an adequate amount?

• How much of our budget is spent on salaries & benefits?

Big Brother and the Big Brother and the Business OfficeBusiness Office

• SACS Accreditation…..10 year audit of overall College, focused on academic programs and accountability

• State Auditors• Annual Financial Audit• Bi-Annual Operation & Compliance Audit• Annual Federal Funds Audit• Annual Bright Futures Audit• Periodic Special Purpose Audits assigned by the Legislature

• Independent Financial Audit by CPA Firm of DSO (Foundations)

Funding ChangesFunding Changes

When the annual increase in your ticket price is growing faster than the cost of living, you have a problem.

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Funding for Fiscal Year 2012-13Funding for Fiscal Year 2012-13

General Revenue& Lottery

Valencia’sOperating

Funds

Other

Loans 13%

Student 87%

Scholarships 10%

Bright Futures 17%

Pell 73%

41%

4%

55%

47% 53%

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Conditions for LearningConditions for Learning

Student Success

Learning Outcomes

Resource Allocation ModelResource Allocation Model

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Developed by VPBS Council

8/9/1010As an alternative to across the board cuts in times of declining resources, one would be better served to focus on, or establish, operational priorities. In the absence of previously established budgetary or operational priorities, it can be helpful to view the organization as an onion. An onion has layers upon layers surrounding its core. As organization, the core of the college operation is instruction. That’s why the college exists. What are the basic elements of instruction? The students and the instructor. The classroom could be owned, borrowed or rented. The classroom could be bricks and mortar or virtual. The core of the college business exists in connecting students and instructors in pursuit of learning, leading to student success.The first layer around the core are those services it takes to connect students and instructors, create a safe environment and attend to the basic business functions it takes to keep the organization a going concern:

HR and Business Services

Admissions & Assessment

Advising

Financial Aid

Library

Tutors

Police or SecurityMoving toward the outside of the onion, the next layer consists of functions that support what’s happening in the core and the first layer. This operational layer ensures long term success of the college mission:

Compliance to regional accreditation criteria

Compliance to state, federal, and grant agency requirements

Facilities

Technology By now, one has an idea of how an organizational or budget onion can be drawn. The outer layers of some organizations’ onion will look different, based on different organizational priorities, but the closer one gets to the core, the more similar these layers may look. As funding sources peel away layers of revenue and cutting into college funds, colleges could peel off outer layers or exact deeper cuts in their outer layers – to protect the core.One caveat: the core is not immune from reductions in resources. Instructional operations lend themselves to budgetary and priority stratification. In other words, just because it’s happening in the classroom (or just because an instructor says it can’t be done different),The core can vbecome and onion unto itself. DRAFT – 3/5/2011 Edward M. DesPlas

Conditions of LearningConditions of Learning

Student Success

Learning Outcomes

Text Book CostsText Book Costs

What are you doing to reduce the cost of textbooks and other instructional materials for your students?