What do business managers need to do their job?
Business managers need training on tools and reports that have been developed specific for the SRM budget model. The business managers have provided their input on what tools would be useful.
What changes will there be in college processes?
The budget model does not change the processes that are currently in place. RUs and SUs may need to change their internal processes.
Will there be a separate revenue department for each college RU?
There will be an SRM department set-up for each college. That department will be used for all the SRM allocations to a college including tuition, state appropriation, space allocation, UPA and strategic investment. There will be new account codes specific to each allocation but not specific to a college.
Will year-end practices in the colleges remain the same?
Yes. There are no plans to change year-end practices.
What happens with college carryforwards at the end of the year?
Year-end balances will stay with the colleges in this model.
How is the university participation assessment (UPA) calculated?
The UPA is the central pool net expense (central pool revenue less central pool expense) divided by college revenue.
When will tuition revenue be distributed to RUs?
Allocations will be transferred to the colleges based on a schedule that calls for 80% of revenue to be transferred at census, 10% of revenue to be transferred at the end of the semester/session, and any remaining revenue to be transferred after all adjustments/write-offs have been made at the end of the fiscal year.
When will the university participation assessment be transferred to the central pool?
The university participation assessment (UPA) will be assessed quarterly.
How will cost expenses be reflected? Where will expenses such as cost of space and the UPA be shown in GLOW?
These allocations will be shown in the new college SRM departments being established to track SRM specific allocations.
What are the practices for spending or ensuring no spending on net revenue when those funds will need to be used to provide strategic investment to other colleges and balance the budget as a whole?
Academic Affairs will continue to require 3rd quarter budget reviews with colleges. The expectation is that there will not be deficits at the end of the year.
As year one is the hold harmless year, spending should be based on the current booked budget. Moving forward the college base budget adjustments will be determined with the SRM rules including college RU strategic investment allocation rules. Colleges should monitor spending through the year based on the actual revenue allocations as compared to the budgeted allocations.
How will having graduate assistant dollars in the RU’s budget change the current process?
At the implementation of SRM, RUs will receive a permanent allocation of graduate assistant funding (both tuition and stipend). This will become part of their permanent budget. Colleges will be responsible for monitoring expense against available dollars.
What changes will there be to summer instruction funding?
At the implementation of SRM, RUs will receive a permanent allocation of summer instructional funding. This will become part of their permanent budget. Colleges will be responsible for monitoring expense against available dollars.
Will there be reports available to show the breakdown of revenue to the department and program level?
SRM is to be implemented at the department level over the next three years using the SRM revenue allocation rules. Program level is not part of the SRM budget model at this time. IR reports will be developed that will use the same methodology as the college tuition allocation but at the department level.
How often will the budget model be reviewed?
The first review of the budget model will be in five years. Subsequently, it will be reviewed on a three-year cycle.
How will Service Units be held accountable?
Service Units will be held accountable for their budgets just as they are now. They will need to prepare justifications to keep their current funding level or for any additional fund that they request. The format for the justification and the process for requesting additional funds is still being developed. Large carry forward balances will need to justified.
How is the revenue calculated for RU’s for FY21?
The sample budget model uses FY20 data and the revenue was calculated based on the SRM revenue allocation rules.
How will revenue be calculated for RU’s for FY22?
The methodology for calculating revenue for FY22 will be the same as FY21.
Are rules for calculating revenue going to change? Who makes those changes?
The first review of the budget model will be in five years and may include a review of the existing rules. Subsequently, the budget model will be reviewed on a three-year cycle. A committee will be established to review the budget model, including how revenue is calculated.
How is the State appropriation derived?
State appropriations are a lump sum provided by the State of Michigan. The state appropriation is then allocated by college of primary program based on FTE.
Will there be any changes to course fee departments or the number of accounts we have in the college?
Course fee departments will be moved from the Designated Fund (23) to the General Fund (11). The only change in the number of departments will be if there are departments currently active but not being used. A cross-walk report will be developed to show the Fund 11 department that correlates to the current Fund 23 department.
What year is indirect cost recovery calculated on?
The budget is based on prior year data. However, the actual indirect cost recovery will be calculated on current year data as is current practice.
What is included in the indirect cost recovery expenditure number?
On the current SRM budget model the specific indirect cost recovery expenditure line is the portion that must be transferred to the department and PI assuming the transfer to Fund 23 designated funds. The remaining costs associated with indirect recovery are built into the budget model for each college through the cost of space allocation and UPA.
What is “assigned revenue – other”? How is that calculated?
“Assigned revenue – other” is the departmental revenue in the booked budget for a college.
What does the Central Pool represent? Which unit(s) does the undergraduate net tuition revenue to the Central Pool come from?
The Central Pool is comprised of the service units in the general fund and the centrally maintained strategic initiatives. It includes revenue booked in the service units. Net tuition in the central pool is generated by University College, Lee Honors College, the Office of Student Transitions, and College of Arts & Sciences Interdisciplinary programs.
What does “Other General Fund Revenue” consist of?
Other General Fund Revenue consists of application fees, graduate fees, transcript fees, investment income allocated to the general fund, accounts receivable service charges and forfeited deposits.
How are expenses determined?
Expenses are based on booked budgets.
How are F&A expenses calculated?
Reports are provided by the Office of Research and Innovation.
How are course fees calculated? Where do I find a report that gives me that information?
Course fees can be found using the Cognos report 90.40 Course Fee Revenue. The course fee revenue on the SRM budget model comes directly from the booked budgets established by each college in the course fee accounts. Cognos link
How is part-time instruction calculated? Does this number include fringe? Where do I find a report that gives me the information?
RUs have received their permanent part-time allocation if they had one. The number is fringe-loaded and is a part of the permanent budget. Cognos report 90.30.10 Estimated Instructional Cost by Program and Instructor of Record has cost information for year 1. This report is currently under construction. Part-time is not broken out separately.
Where does the summer instruction number come from? Does this number include fringe? Where do I find a report that gives me the information?
RUs will receive a permanent summer allocation at implementation of the model. The number is fringe-loaded and will become part of the permanent budget. Cognos report 90.30.10 Estimated Instructional Cost by Program and Instructor of Record has cost information for year 1. This report is currently under construction.
How is the graduate assistant stipend and tuition calculated? Where do I find a report that gives me the information?
For the SRM budget model an amount was estimated based on past one-time allocations for modeling purposes. RU’s will receive a permanent graduate assistant allocation at the implementation of the model.
How was WMUx instructional expense calculated?
For the SRM budget model an amount was provided by WMUx based on estimates for modeling purposes. The permanent allocation is still under discussion. As decisions are made, information will be updated here.
When will space costs be finalized?
Space costs will be finalized with the implementation of SRM in FY22.
What are the components of the space costs?
Costs for space, including maintenance, custodial services, utilities, and debt service, will be allocated based on net assignable square footage unless it is included as a direct expense to a unit. The Registrar’s office “owns” some classroom space. The cost of this space will be allocated to and included in the college RU’s cost of space based on percentage of usage.
What is the amount of the University Participation Assessment?
Current UPA rates can be found on the Reporting and Other Information page. Rates will remain in place for three years. Rates could be adjusted before the three years if strategic initiatives need to be funded.
What is the difference between net revenue and net expense in the budget model?
If an RU has net revenue, their revenues exceed their expenses. If an RU has net expense, their expenses exceed their revenues.
What is the Strategic Investment Allocation?
The Strategic Investment Allocation will be used to make whole colleges and auxiliaries that are operating in a net expense situation.
All RU’s will be held harmless in the first year of implementation. After that, colleges should refer to the Strategic Investment Schematic prepared by the Provost office located on the Reporting and Other Information page. Auxiliary units will need to submit a plan regarding how they will achieve a balanced budget after the first year of implementation.
How are University Strategic Initiatives funded?
University Strategic Initiatives are funded by the UPA.
What are the University Strategic Initiatives?
Current University Strategic Initiatives are
Transformational Initiatives
Mountain Top Initiative
The University Strategic Initiative Fund will also be established
How are Academic Affairs Strategic Initiatives funded?
Academic Affairs Strategic Initiatives are funded by the UPA.
What are Academic Affairs’ Strategic Initiatives?
The Academic Affairs Strategic Initiatives fund will be under the purview of the Provost.
How are Renewal/Replacement Reserves funded?
Renewal/Replacement Reserves are funded by the UPA.
What are Renewal/Replacement Reserves?
A central renewal/placement reserve is being established to address both information technology and infrastructure needs across campus.
How is the Research Support Strategic Initiative funded?
Research Support Strategic Initiatives are funded by the revenue allocation rule of 10% of Indirect Cost Recoveries.
What are Research Support Strategic Initiatives?
The research support strategic initiatives fund will be under the purview of the Office of Research and Innovation.
Where does the revenue come from for Auxiliary units?
Auxiliary units are responsible for generating their own revenue. Some examples are student housing and dining, theater productions, health services, etc.
What expenses are Auxiliary units responsible for covering?
Auxiliary units are responsible for covering all of their costs such as compensation, operating costs, cost of maintaining their space and debt service.
Why does the model show charges for cost of space for some Auxiliary units and not others?
Those Auxiliary units that do not have a cost of space allocation pay for their space usage directly.
What is the University Participation Assessment for Auxiliary units?
The UPA for Auxiliary Units is 4.65% of their total revenue. Similar to the College RU UPA, the rate was determined at time of implementation and is sufficient to cover 2.5% of the general fund service unit expenses.
What is the Strategic Investment Allocation used for by the Auxiliary units?
The Strategic Investment Allocation will be used to make whole auxiliaries that are operating in a net expense situation based on the cost of space allocation. As all RU’s will be held harmless in the first year of implementation, the addition of the cost of space will require a Strategic Investment Allocation to many auxiliaries since that is a new cost component for many of the units. Auxiliary units will need to submit a plan regarding how they will achieve a balanced budget after the first year of implementation.
Which Fund 23’s are charged the Auxiliary UPA and which Fund 23’s are charged the College UPA?
Many of the Fund 23 departments are being moved to Fund 11, such as the course fee accounts. The remaining Fund 23's will be assessed based on the general rule that activities that mirror tuition will be assessed the College UPA and other activities, such as conferences, will be assessed the Auxiliary UPA.
What are the UPA amounts charged to Fund 23’s?
Depending on their activities, Fund 23’s will be charged either the college or auxiliary UPA.
Why are Fund 23’s charged a UPA?
SRM is a more holistic approach to budgeting and looks at all forms of revenue in the SRM process included UPA. As such, the Designated Fund revenues are not exempt from the UPA as they only occur through association with the University.
Why are Fund 23’s not charged cost of space?
Typically the Fund 23 activities are not an operating unit but part of a college or service unit. Space was claimed at the college or department level and service units at the VP or department level, not by activity type. If there is a specific Fund 23 activity that is an operating unit we will work to isolate that space and allocate the space costs accordingly.