Finance and Planning
TO:
Financial Officers
FROM:
David Woodward
DATE:
November 19, 2012
SUBJECT: FY14-FY16 Budget Manual
The budget manual reviews the university’s policies, procedures and forms for the entire
operating budget development process. The process revolves around three meetings of the
university’s Board of Trustees. In November, the Board discusses preliminary strategic planning
assumptions such as tuition growth rates, enrollment, salary merit increases, deferred
maintenance and endowment distributions. In February, the Board reviews the financial
situation and issues for the upcoming fiscal year based upon “pro-forma” budgets submitted by
schools. The Board endorses undergraduate tuition rates and enrollment targets as well. In May,
the Board approves the final university budget.
There are three major milestones for school fiscal officers:
1. Pro-forma Budgets (due December 4 to 12 depending on school)
2. Final Budgets (due February 28)
3. PeopleSoft Upload (due May 31)
The attached manual is organized around these three milestones (pages 4, 6, and 9, respectively).
A complete calendar for the budget process is provided at the beginning of this manual. Please
plan accordingly. Your cooperation will help us meet critical dates and facilitate the decisionmaking process with the President, his senior staff, and the Trustees. Please do not hesitate to
contact Rock Rottler (x73715) or me (x76068) if you need assistance or have any questions.
Thank you for providing complete, accurate and timely submissions.
UNIVERSITY BUDGET MANUAL
TABLE OF CONTENTS
BUDGET PROCESS
I.
Calendar
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II.
Pro-forma Budgets
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III.
Final Budgets
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IV.
Budget Upload to PeopleSoft .
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POLICIES AND PROCEDURES BY LINE ITEM
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Revenues
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II.
Expenses
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III.
Transfers
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APPENDIX
A.
Budget Assumptions
B.
Budget Upload Format
2
BUDGET PROCESS
I. Calendar for FY14-FY16 Budgets
Between November and May, the Office of Finance & Planning (F&P) works with school and
central office administrators to prepare budgets for the Trustees and for entry into PeopleSoft.
Major milestones throughout the planning process are listed below. Critical submission dates for
schools appear in boldface.
Nov 2
Nov 19
Nov 20
Nov 20
Nov 27–Dec 5
Dec 4-12
Jan 4
Jan 11
Jan 18
Jan 25
Feb 8
Feb 8
Feb 25
Feb 28
Mar 25–Mar 29
Apr 10–Apr 19
Apr 17
Apr 22-Apr 26
May 3
May 17
May 28
May 31
A&F Trustee Committee reviews preliminary planning assumptions
F&P budget manual (O&M, Central Assessment, DM, Endow, Merit/Fringe)
Fiscal Officer meeting / Executive Budget Committee meeting
Central departments submit final budgets to F&P
Preliminary meetings for schools, EVP, VP Finance, and F&P staff
Schools submit FY14-FY16 pro-forma budgets (based on meeting date)
Operations submits revised FY14–FY16 budget package
Executive administration reviews central (including operations) budgets
Schools submit December projections
Mailing to A&F Trustee Committee (budget perspectives/summary analysis)
A&F Trustee meeting (endorse AS&E total student charges)
Final operations, endowment, bad debt/salary accrual budgets available
Fiscal Officer meeting (tentative date)
Schools submit proposed final budgets to F&P
Deans, President and executive administration review budgets
F&P prepares University package for executive administration review
Schools submit March projections
Executive administration approves budget
Mailing to A&F Trustee Committee
A&F Trustee Committee approves budgets, tuition rates, enrollments
Fiscal Officer meeting
Schools submit budget uploads for PeopleSoft
3
BUDGET PROCESS
II. Pro-forma Budgets
Pro-forma budgets enable executive leadership to discuss a preliminary university budget with
Trustees in February. Peer-tuition comparisons are discussed as well. Given the significance of
undergraduate tuition revenue and the entering class admissions process, Trustees are asked to
endorse AS&E’s undergraduate total-student-charges increase and enrollment for the upcoming
fiscal year.
Pro-forma budgets are due one week after each school’s preliminary budget meeting with the
Executive Vice President, the Vice President for Finance, and staff from Finance & Planning.
Preliminary budget meeting and pro-forma due dates are shown below.
School
Tisch
Friedman
Engineering
A&S
Dental
Fletcher
HNRCA
Medical
Cummings
Preliminary Budget Meeting
November 27
November 28
November 28
November 30
December 4
December 4
December 4
December 5
December 5
Pro-Forma Due Date
December 4
December 5
December 5
December 7
December 11
December 11
December 11
December 12
December 12
Pro-forma budget submissions have six components:
 financial officer narrative
 operating statement (with supporting budget detail)
 profile data
 peer data
 carry forward budgets
 clinical and other educational activities (if applicable)
A folder in each school’s shared drive budget directory contains a “master” excel file with
separate tabs for the operating statement/budget detail, profile, peer, and clinic schedules. Each
of the six components of the pro-forma budget is described below.
A. Fiscal Officer Narrative
Each fiscal officer submits a narrative that provides a general description of the school’s plans,
initiatives, and challenges along with explanations of significant changes in line items of
revenue, expense and transfers. FY 2012 actuals and approved FY 2013 budgets should be
included for comparison. Assumptions for major categories such as tuition, enrollment, and
research should be listed and any issues that are critical to the proposed three-year budget should
be discussed. The pro-forma narrative should serve as an early draft for the final fiscal officer
narrative that will accompany the final budget submission in February.
4
B. Pro-forma Operating Statement (with supporting budget detail)
Each school will find in its shared drive a file titled “(school name) Master File 2014 – 2016.”
The tab in this file labeled “Budget Detail” is provided to help you develop the FY 2014 budget.
Data in the “Budget Detail” tab will automatically populate the “Operating Statement” tab. For
your December submission, please complete the “Budget Detail” tab and confirm that the
“Operating Statement” tab has the total revenue, expense, and transfer amounts you intend.
Instructions for completing the “Budget Detail” tab are as follows:
FY14 Program Change
Using your three year plan for FY14-FY16, enter the dollar impact of all FY14 program changes
in column 4 by line item of income or expense. Column 4 should contain not only the dollar
impact of program additions or deletions, but also adjustments to the FY13 base budget
reflecting realignments since the budget was approved by the Trustees in May, 2012. These
adjustments should reference any ongoing changes represented in the FY12 year-end actuals that
were not budgeted. Any figures (income or expense) contained in columns 4 must be explained
in column 8.
FY14 Economic Change
Economic changes (column 5 below) should measure only the dollar impact of noncompensation inflation, merit increases, and fringe-benefit-rate changes. Changes to line items
that vary from the university’s budget assumptions (see Appendix A) must be explained in
column 8.
FY15 and FY16 Budgets
The FY15 and FY16 budgets (columns 9 and 10 below) are estimates of costs (including
inflation) to provide planned programs in those fiscal years. Any adjustments that differ from the
budget assumptions in Appendix A must be explained in column 11.
SAMPLE BUDGET DETAIL
1
2
3
4
5
6
7
8
9
10
11
FY12 FY13
%
FY14 FY14 FY14
%
Explain All
FY15 FY16 Explain All FY15Actual Budget Change ProgramEconomic Budget Change FY14 Changes Budget Budget FY16 Changes
REVENUE
EXPENSES
NET INCOME (before transfers)
TRANSFERS
School Surplus/(Deficit) (after transfers)
Carryforward Surplus/(Deficit) (after transfers)
C. Profile Data
Using the “Profile Data” tab in your school’s master excel file, please provide the following data
for FY12 actuals, FY13 approved budget, and FY14-FY16 pro-forma budgets as available:
 tuition rates (by program) and percentage increases
 other fees such as room, board, application, etc.
 planned enrollment by program
5








selectivity and yield admissions statistics (see University Fact Book)
undergraduate financial aid as a percent of total student charges
percent of students receiving aid and average award for those students
indebtedness upon graduation
faculty and non-faculty FTE
faculty salary increase pools with equity funding pools, if budgeted
student / faculty ratio
endowment market value per student
Please ensure the data are consistent with data provided to the Office of Institutional Research &
Evaluation and with past approved budget years.
D. Peer Data
Using the “Comparative Data” tab in your school’s master excel file, please provide key
competitive information, measured for the current year and one year ago.
Tuition and Fees
Display tuition and fees per student and, if available, the percent of students receiving financial
aid and the average aid award for those students. Display mean and median of selected peers as
well. Please footnote pertinent details or explanations of any unusual data or trends.
Test Scores
These data measure incoming grade point average or other appropriate test scores. Include the
mean and median of comparative institutions.
Admissions
These tables display data on competitor institutions where applicants to your school also applied
and were accepted, along with selectivity and yield statistics.
Outcome Data
If available, outgoing test scores or other outcome data are tabled here for your school and key
competitors. Examples may include: LSAT, GRE, board scores for health professionals,
employment placement rates upon graduation.
E. Carry Forward Budget
Schools are asked to provide a budget for all carry forward deptids. Using the carry forward
report, budget anticipated changes to revenue, expense (including financial aid), and final
balances. Details should be summarized to match each line on the operating statement.
F. Clinical and Other Educational Activities
If applicable, update the clinical activities tab in the master budget file with department detail.
The tab supports any clinical and other activities revenue and expense budgets and should
reconcile to the operating statement totals for revenue and expense for FY12 actuals through the
FY16 budget.
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CAPITAL BUDGETS
This year, the timetable for the capital budgeting process was modified to include additional
updates and reviews during the summer and fall. The capital plans presented to the Provost and
Executive Vice President this fall are now undergoing further analysis in order to arrive at a
university-wide plan through FY 2017. To ensure that the capital and operating budgets are
properly integrated, fiscal officers need to identify projects that impact operations, include the
impact in the pro-forma submission, and identify the project and amount of impact in the fiscal
officer narrative. If you have any questions please contact Ann Hunt at x73061.
BUDGET PROCESS
III. Final Budgets
The Office of Finance & Planning uses each school’s final budget to develop the university’s
total budget for Trustee approval in May. Complete budgets are due on or before February
28, 2013. The final budget package should include an update to each of the six components of
the pro-forma submission and add the following two components:
 Dean’s narrative
 roster of budgeted positions
These components are described below.
G. Dean’s (or HNRCA Director’s) Narrative
The Dean’s narrative is a summary of the school’s strengths, weaknesses, opportunities, threats
and strategic plan for FY 2014 through FY 2016. The narrative should include references to
critical budget factors such as capital projects, new programs or initiatives, tuition and fees,
enrollments, financial aid, admissions statistics, other primary revenue sources, strategic faculty
hires, staff additions or changes, faculty merit increases, and other support. As a guideline, the
narrative should be about 3-5 pages in length.
H. Roster of Budgeted Positions and Merit Analysis
Rosters provide compensation budgets by individual position and by the various pools (e.g.,
equity, merit, adjunct faculty, student, overtime, fringe benefit) that may be used to manage
compensation. Please note, this year a new account code, 5030 “Vacancy Savings,” is available
to schools if you choose to budget as a credit any anticipated vacancy savings. Please budget all
approved positions and use the vacancy savings code if you anticipate savings from unfilled
positions. The total of the roster budget should equal the total of all compensation account codes
(50xx) that will be uploaded to PeopleSoft in June. Roster data should include the following:
ROSTER FORMAT
1
Position
Number
2
3
4
5
6
7
8
9
10
11
12
Position
Home DeptID Annual Financial Account Salary Distribution Funding Functional
Title FTE Number Name Salary DeptID # Code Percent Dollar Code Line Item
The Office of Finance & Planning is committed to working with each school to develop a roster
in the format above by February 28th.
7
BUDGET PROCESS
IV. Budget Upload to PeopleSoft
The final step in the budget development process is to upload the budget into PeopleSoft. Each
school should submit the budget upload file to Finance and Planning no later than May 31st (see
Appendix B for instructions) and notify Mary Beth McHugh (x76836 or
[email protected]) once your submission is complete. If you require new dept ids for
FY14, please submit a deptid create form to Mary Beth before submitting the upload file
containing the budget for the new deptid. This will ensure that the budget will be accepted into
PeopleSoft. Also, if you are responsible for any allocations or recurring entries, you should
contact Mary Beth to revise, create or delete as necessary before the start of the new fiscal year.
UNIVERSITY BUDGET POLICIES AND PROCEDURES
This section provides guidance for budgeting individual line items for revenues, expenses, and
transfers. Significant deviations from these guidelines should be identified in your school’s
narrative.
I. Revenues
Tuition and Fees
Schools should consider the following factors when budgeting tuition and fees:
 the program’s position in the marketplace
 national applicant pool trends, school applicant acceptance and matriculation trends
 changes in or newly added degree, summer or other programs
 extraordinary programmatic needs
 level of student financial aid required
Grants and Contracts
Schools should apply the following guidelines when budgeting grants and contracts.
 work with principal investigators and their grant managers to determine a realistic level
of external funding (including the private grants that are discussed below)
 request input from Grants & Contracts Administration and Sponsored Program
Accounting to determine new and changing funding of grants and contracts
 confirm that the budget for sponsored income equals the sum of sponsored direct expense
(total revenue = total expense + financial aid)
 apply indirect cost rates developed by Finance & Planning (see Appendix A) where
appropriate and adjust for grants that are not able to fund the authorized rates
 budget through FY16 use-allowance at the rates of 16.6% for the Medford campus and
15.5% for the Health Sciences campus
 the narrative should identify the sponsors, grants in hand as a portion of budget, and
recent trends regarding the percent of proposals that have been successful.
8
Clinical, Other Educational Activities, or Auxiliary Enterprises
Clinical and other activities include revenues derived from the sale of goods or services that are
produced in conjunction with the school’s mission of instruction, research and public service.
Auxiliary activities include revenues derived from the sale of such ancillary services as dining,
dormitories, conferences, bookstores, and health services. Each operates within the following
guidelines.
 each activity should at least break-even unless directly associated with the success of the
academic program or other strategic purpose
 activities will be fully costed, including O&M, debt service, and deferred maintenance
Contributions
In conjunction with Advancement, each school will define its individual annual and capital
fundraising goals. Gift categories are divided into unrestricted (annual fund) and restricted gifts
(carry forwards). Advancement will provide proposed annual fund goals for the FY14-FY16
timeframe. Revenue from temporarily restricted funds (“Release from Temp Restricted
Contributions”) should fund an equal amount of expense (including financial aid).
Endowment Spending Policy
Endowment spending, or payout, policy is developed by the Investment Committee of the Board
of Trustees and approved by the full Board on a periodic basis. The current policy increases
spending by 3% per year, with adjustment if the rate is not within 4.5% to 5.5% of the average
endowment market value on December 31st and January 31st of the prior fiscal year.
Endowments whose market values are less than their book values are considered to be
“underwater.” Payouts from underwater endowments are reduced by an amount that depends on
the degree to which the fund is underwater per the university’s tiered spending policy. Karen
Pepper (x72201) will provide endowment estimates for FY13-FY16 to each school in February.
II. Expenses
Faculty Merit Increase - CONFIDENTIAL
Each school competes for faculty in its own regional and national markets and will recommend
to the President and administration appropriate salary pools. Along with annual merit, faculty
budgets should include anticipated expenses for retention, equity and other adjustments.
Non-Faculty Merit Increase - CONFIDENTIAL
In early October, the Human Resources Office developed estimates for the non-faculty merit
increase pools based on market and employment data. The preliminary recommendation for
FY14 is a university-wide annual merit pool average of 2.5%. The preliminary assumption for
both FY15 and FY16 is also 2.5%. An additional 0.5% should be budgeted for other salary
adjustments. If schools do not budget the 0.5% discretely, fiscal officers should explain how
these expenses will be funded in the narrative.
Employee Fringe Benefits
University policy is to remain competitive in our total compensation package. The preliminary
unrestricted fringe benefit rates for full-time employees will be 28.75% in FY14, 29.50% in
FY15 and 30.50% in FY16. The part-time rate will be 8.3% from FY14 to FY16. We continue
9
to monitor the changes in the health care industry to ensure appropriate levels of funding. The
budget assumptions (see Appendix A) contain both the unrestricted and restricted rates.
Institutional Support (or central assessment)
The central assessment approximates the costs the university incurs for central departments (e.g.,
Human Resources, Finance, UIT, Advancement) net of central revenue (e.g., investment
income). Beginning FY14 and phased-in over five years, a new methodology has been adopted
for budgeting central assessment. Former multiple assessments (e.g., technology, excess
assessment, structural deficit) have been consolidated into a single central assessment that is
allocated to schools based on each school’s share of the university’s trailing three-year actual
gross operating revenue (ending fiscal FY12). Each school’s pro-forma central assessments,
excluding an adjustment for excess assessment, appears below assuming a central assessment
annual increase of 5.0%. Schools will be notified if this preliminary rate increase changes.
CENTRAL ASSESSMENT
FY14
AS&E
Fletcher
Friedman
Medical
Dental
Cummings
Tisch
Total
FY15
FY16
$50,526,019
$52,487,132
$54,518,041
4,030,088
4,401,406
4,799,781
2,188,807
2,498,378
2,833,435
17,667,119
18,272,259
18,893,745
10,536,750
11,329,698
12,175,599
8,529,423
9,122,113
9,752,747
351,614
410,326
474,029
$93,829,820
$98,521,312
$103,447,377
Deferred Maintenance
The university maintains a deferred maintenance (DM) fund to address the current backlog of
building deficiencies and provide for future facilities renewal and replacement. Schools
contribute to the DM fund through O&M. Total DM budgets are set per university objectives to
maintain facilities in good condition as generally defined by the Association of Higher Education
Facilities Officers (also known as APPA) and supporting engineering studies. Total DM budgets
have been allocated to schools based on each school’s share of the replacement value of
facilities, phased in over five years. Pro-forma budgets for each school appear below.
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DEFERRED MAINTENANCE
FY14
AS&E
Fletcher
Friedman
Medical
Dental
Cummings
Tisch
Institutional
Total
FY15
FY16
$13,606,245
$14,567,588
$15,570,605
588,132
679,083
783,154
215,740
243,785
275,423
2,429,635
3,252,349
4,231,698
1,650,290
1,938,435
2,270,945
1,990,161
2,282,141
2,614,903
42,429
49,227
57,025
2,105,217
2,207,904
2,306,485
$22,627,849
$25,220,512
$28,110,238
Other / Shared Costs
Schedules for items common to all schools will be forwarded to you by the office responsible for
compiling the information. These include:
 bad debt reserves – budgeted annually for potential uncollectible student and/or loan
receivables (Dick Doolan, x73140) and clinic receivables (Ed Mahoney, x72144). Dick
and Ed will provide an estimate for each school as appropriate.
 weekly salary accruals – Finance & Planning will prepare estimates for each school and
Ed Mahoney (x72144) will communicate these amounts to all schools.
 faculty salary accruals – budgeted annually to accrue for faculty salaries, paid out over a
twelve-month period versus a nine-month academic period. The amount is calculated by
applying future merit and fringe rate assumptions against current year faculty salary bases
(Ed Mahoney, x 72144).
 internal loan repayments – payments due to the University for internal capital project
borrowing (Ed Mahoney, x72144).
 telecommunications – Marybeth Caputo (x72615).
 TNEMC, Health Services Boston, Health Sciences Library – Patti Ambrosia (x60937)
 Student services – Rich Kelley (x73756 Medford), Patti Ambrosia (x60937 Boston)
III. Transfers
Transfers move funds from the current operating funds group to other fund groups for a variety
of purposes. The transfers are subject to approval by central administration.

renewal and replacement – moves current fund reserves to plant fund reserves for future
capital projects. Renewal and replacement transfers include use allowance, internal loan
payments, and reserves for departments, schools, buildings, or insurance.
account 7002: Transfer to/from Reserves

unexpended plant – moves current fund reserves to capital projects (i.e., CEAs)
account 7006: for funding from operating dept ids
account 7018: for funding from carryforward deptids

endowment – account 7005
11

student loan – account 7004

general – moves current fund reserves between deptids
account 7001: transfer to/from unrestricted
account 7016: for carryforward transfers
The fiscal officer narratives should provide detail about budgeted transfers.
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APPENDIX A
Budget Assumptions
FY13
Actual
FY14
Budget
FY15
Budget
FY16
Budget
2.8%
--
2.5%
0.5%
2.5%
0.5%
2.5%
0.5%
Employee Fringe Benefits
Unrestricted Funds
Full-Time Rate
Mandated Rate
28.00%
8.0%
28.75%
8.3%
29.50%
8.3%
30.50%
8.3%
Restricted Funds
Full-Time Rate
Mandated Rate
Post-Doctoral
Summer Supplement
25.5%
8.0%
18.0%
17.0%
27.7%
8.3%
17.8%
17.1%
27.7%
8.3%
17.8%
17.1%
27.7%
8.3%
17.8%
17.1%
Endowment Distribution
(0.6%)
3.0%
3.0%
3.0%
Indirect Cost Rates
Health Sciences
Research On Campus
Research Off Campus
Other Spon. On Campus
Other Spon. Off Campus
Independent Operations
65.0%
26.0%
37.0%
26.0%
10.0%
65.0%
26.0%
37.0%
26.0%
10.0%
65.0%
26.0%
37.0%
26.0%
10.0%
65.0%
26.0%
37.0%
26.0%
10.0%
Medford Campus
Research On Campus
Research Off Campus
Other Spon. On Campus
Other Spon. Off Campus
53.5%
26.0%
37.0%
26.0%
54.5%
26.0%
37.0%
26.0%
55.0%
26.0%
37.0%
26.0%
56.0%
26.0%
37.0%
26.0%
Telecommunications
Boston
Grafton
Medford
$42.00
$32.00
$45.00
$42.00
$32.00
$45.00
$42.00
$32.00
$45.00
$42.00
$32.00
$45.00
Salary and Wages
Faculty and Non-Faculty Annual Merit
Other Adjustments (equity, overtime)
13
APPENDIX B
Budget Upload to PeopleSoft
Finance and Planning uploads the FY14 budget into PeopleSoft in June. Templates for upload
are provided in each school’s shared drive and schools are expected to submit their templates no
later than May 31st. Note that revenues are uploaded as negative numbers while expenses,
including financial aid, are uploaded as positive numbers. Please verify that the totals for each
revenue and expense line in the budget upload file match the total revenue and expense lines in
the approved FY14 budget before notifying Finance and Planning that the templates are ready.
Sample Templates for FY14 (Note: samples represent only part of an upload file)
Revenue Budget
ORG
ORG
ORG
ORG
ORG
Account
4001
4004
4001
4005
4005
Dept ID
V000100
V000100
V000110
V350500
V410100
Year
2014
2014
2014
2014
2014
Amount
-10979010.00
-74160.00
-98500.00
-1500.00
-45750.00
-11198920.00
Operating Statement
Tuition & Fees
Other Tuition Related Fees
PhD
CFA Application Fees
Application Fees
Total Tuition & Fees
ORG
ORG
ORG
ORG
ORG
5200
5200
5200
5200
5200
V410600
V800886
V800887
V800888
V800889
2014
2014
2014
2014
2014
596888.00
413374.00
80000.00
30000.00
11000.00
1131262.00
Scholarships
Carry Forward Student Aid
Fed Student Aid
State Student Aid
Private Student Aid
Total Financial Aid
Dept ID
N200200
N200200
N200200
N200200
N200200
N200200
Year
2014
2014
2014
2014
2014
2014
Amount
416752.00
143830.00
98801.00
24059.00
333270.00
12226.00
899938.00
Expense Budget
ORG
ORG
ORG
ORG
ORG
ORG
Account
5004
5007
5011
5012
5051
5055
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Total Instruction