Fy09 Bud Dev Manual

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Finance and Planning

TO: Distribution

FROM: John J. Spinard

DATE: November 6, 2007

SUBJECT: FY 2009 2011 Budget Development

The budget manual provides a comprehensive view of information regarding the budget process,policies, procedures and forms. It covers the entire budget development process from budgetassumptions to uploading next years budget into PeopleSoft.

In summary, the budget process consists of the following:

Budget Assumptions. The three-year budget assumptions will be presented to the Trusteesat the February meeting. The assumptions will include estimates for major items such astuitions, fees, enrollments, financial aid, merit increases and strategic initiatives, as well aspertinent market and comparative data. The presentation of the budget assumptions inFebruary allows for Trustee feedback in advance of developing the actual budget. Budgetassumption packages are due on December 7, 2007. (See manual: pages 4-8 for details.)

Final Budgets. The three year budget including final operating statements and capitalbudgets will be presented at the Trustees May meeting. Complete budget submissions aredue on February 4th, 2008. (See manual pages 8-12 for details.)

Capital budgets are due on December 14th, 2007.

Please refer to the budget development calendar provided at the beginning of the manual forplanning purposes. Your cooperation in helping us meet the critical dates will facilitate the decision-making process with the President, his senior staff and the Trustees. Contact Gloria Riccobono(73717), Rock Rottler (73715) or myself (73719) with any questions or concerns.


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Budget Process

UNIVERSITY BUDGET INSTRUCTIONS

TABLE OF CONTENTS

BUDGET PROCESS ...3-11

I. Calendar.3

II. Budget Assumptions..4-8 Critical Budget Issues

Profile Data InstructionsComparative Data

III. Budget Package Instructions.. 8-11

NarrativeOperating Budget Statement, ScheduleIProgram Changes, Schedule IICarry Forward Budget

Roster of Budgeted Positions and Merit AnalysisCapital Budget

IV. Closure.....11Upload FilesNew Dept Ids, Allocations and Recurring Entries

POLICIES AND PROCEDURES...12-21

I. Economic Guidelines....12

II. University Budget Policies and Procedures..12-21Revenue Budget Policies and ProceduresExpense Budget Policies and Procedures

Deferred Maintenance, Information Technology,Non-Faculty and Faculty Merit Increase,Employee Fringe Benefits, InstitutionalSupport (Assessment),Structural Deficit Funding, Contingency Margin,Shared Costs

APPENDIX

Economic and Budgetary GuidelinesBudget Upload FormatCapital Budget

FY 2009 2011 Budget Development Manual - 2 -


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Budget Process

BUDGET PROCESS:

II. Budget Assumptions

Overview

The budget assumptions process provides the Trustees an early warning on strategic plans and

budget issues and obtains their concurrence on general policy and budget assumptions. At theNovember Trustee Administration and Finance Committee meeting, the Trustees are given a preview of key budget factors including any potential changes. At the February TrusteeAdministration and Finance Committee meeting, the budget assumptions presentationincorporates a review of the external environment, the University's financial position, long-termgoals and major initiatives. Additionally, economic and budget assumptions are highlighted andpeer tuition comparisons included for each school. Also, Arts, Sciences & Engineering requestsa Trustee endorsement of its planned undergraduate total student charges, reflective of its uniqueadmissions and financial aid processes.

The sections that follow provide instructions to complete the school package for use in providing

University budget documents to the Trustees. This package consists of a narrative, a profile datasheet and peer comparisons and is due to Finance & Planning on or before Friday, December 7

In addition, in preparation for the January meetings with Deans and executive administration, allschools are asked to provide a preliminary operating statement pro-forma for FY 2009-2011.The analysis should focus on areas of concern and funding issues and include a description ofchanges on each revenue and expense line.

FY 2009-2011 Budget Request

Due December 7th, 2007:

Profile Data

Comparative Data Schedule I, preliminary

Narrative

Due February 4th, 2008:

Budget Detail with explanation of all changes

Schedule I, final

Source/Use Analysis

Sales & Services Analysis

Carry forward Budget

Roster of budgeted positions

Final Narrative

Shared Network Drive



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Budget Process

Finance and Planning has created a folder in each schools budget directory on the shared drive.All Schools must utilize the template provided in the FY 2009-2011 folder in order tostandardize the budget process, as well as, to gain efficiencies in providing timely and accuratedata to the financial community. The template file contains multiple tabs for each requiredschedule.

A. Narrative

A standard template will not be required for the narrative. Narratives should be addressed to theProvost and written by each Dean. Specific references to such critical factors as tuition andfees, enrollments, financial aid, admissions statistics, faculty merit increases, strategic initiativesand capital plans should be included. The narrative should also include a financial sensitivityanalysis describing the impact on the budget for each economic and budget policy assumption.As we are aware, each school and division is in a different market, subject to unique market andbudgetary conditions. If you find it necessary to deviate from these University economic andbudgetary guidelines, the narrative should highlight the change and the underlying factors forthis change.

In the second narrative submitted with the final budget plan in February, a more robustdiscussion of the three year plan and school initiatives should be included. This narrative shouldalso address the FY 2009-11 budget assumptions developed by each school, Advancement,Operations and Central Administration highlights with the major policy and strategic issues,proposed and planned program changes and long-term plans.

B. Critical Budget Issues

The following sections describe critical budget issues, either University-wide or school/campus

specific, to be considered in the development of the three-year strategic budget. The impact ofeach of these items on school budgets should be addressed in both the budget assumptions andbudget packages.

University - Wide

1. The impact of rising utility costs should be factored into all operating and capitalbudgets.

2. Schools should closely watch tuition pricing strategies and market issues and assess theirimpact on operating budgets.

3. Changes in applicant pools may result in changes to budgeted enrollment levels.Consideration of the budget implications relating to admissions policy should continue.



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Budget Process

4. The effects of federal and state funding shifts in program, financial aid and facilities &administration recovery (ICR) must be considered and alternative funding sources andplans identified in this three year planning period.

5. Contingency planning is essential to assess possible risks and opportunities to bothprograms and to the financial health of each school and the University especially taking

into consideration the current fluctuations in the market prices of utilities.

Consideration of funding needs and priorities of past years' base revenue and expense problems and opportunities, coupled with productivity improvements, is essential tofuture years' fiscal health.

Health Sciences Campuses

1. The Medical Schools continuing financial pressure with the reduction in NIH fundingpresents many challenges. Issues to be considered include the ability to achieve its

budgeted deficit target given shifts in ICR funding, and rising costs and managing thesedemands with less.

2. In the FY 2008 budget submission, the School of Dental Medicine identifiedmanaging the impact of the vertical expansion on its operational base as an area ofconcern. In addition, increasing expenses in the clinics, faculty retention,development and compensation continue as ongoing concerns. Accomplishmentsmade towards these goals should be included. Updated information pertaining tothe expansion of the Dental

Tower and related assumptions should be incorporated into the budget submission.

3. At the Cummings School funding the renovation of additional research spacewhile competing for a pool of shrinking federal funding was identified as aconcern in the FY 2008 budget submission.

4. Progress with Friedmans faculty achieving 50% offset of their salary from research andtraining grants should be described. Enrollment and grant trends identified as issues inFY07 should be addressed. Is there continuing concern with faculty turnover andfinancial aid for doctoral students?

5. Funding levels increased in FY08 at the HNRCA. Will the current downwardtrend in Federal funding impact the HNRCA? What planning has been done toaddress the shortfall in senior scientist salaries and cover inflationary increases?

Medford Campus

1. After completing a comprehensive review of its base budget, AS&E continues to report



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Budget Process

significant deficits over the next three years. Plans to bring AS&E back into balanceshould be addressed.

2. The School of Engineering has projected a reduction in federal grant funding for FY08.This and future strategies to offset the impact on the AS&E budget should be addressedalong with Advancements plan for meeting realistic annual fund goals.

3. The Fletcher School should address the future direction and risks associated with GMAPand other new programs. Also describe plans for new revenue sources and increasingresearch.

C. Profile Data Instructions

Using the Profile Data Sheet tab in the template, please provide the following data for FY2007 actuals, FY 2008 budget and FY 2009-11 budget assumptions.

- Tuition rates (by program) and percentage increases;

- Other fees such as room, board, application, etc;- Planned enrollment by program;- Selectivity and yield admissions statistics (see University Fact Book);- Undergraduate financial aid as a percent of total student charges;- Percent of students receiving aid;- Average award per student;- Indebtedness upon graduation;- Faculty and Non-Faculty FTE;- Faculty and Non-Faculty salary increase pools;- Student/faculty ratio;- Endowment per student market value/student FTE;

- Competitive Position

Note: Please insure this data is consistent with data provided by your Admissions Office toDawn Terkla.

D. Comparative Data

This section is intended to provide key competitive information, measured for the current yearand one year ago. Please reference last year's Trustee presentation.

Tuition and FeesDisplay tuition and fees per student, average school grant and net tuition (tuition and fees lessaverage grant) for your school and the mean and median of selected peers. A footnote shoulddetail data the schools used in this comparison and an explanation of any unusual data or trends.



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GPA, Test ScoresThese data will measure incoming grade point average and appropriate test scores, againdisplaying your school statistics and the mean and median of comparative institutions.

Admissions

These tables will include joint acceptances, won/lost comparisons, selectivity and yield statisticsfor your school and key competitors.Outcome DataIf outgoing test scores or other outcome data are available for your school and key competitors,please provide the tables here. Examples may include: LSAT or GRE for undergraduate boardscores for health professionals.

BUDGET PROCESS:

III. Budget Package Instructions

Overview

The budget process provides an opportunity for each school and division to translate its long-term goals and plans into action steps and specific three-year operating and capital budgets, andto provide this information to Trustees for approval of the upcoming year's tuitions, fees,enrollments and budgets.

The sections that follow provide guidelines and instructions to complete the school budgetpackage requests for presentation to the administration and to the Trustees. A complete packageconsists of a narrative from the Vice President or Dean which includes the strategic mission andcritical budget factors (see page 2) of the school, an operating budget statement (Schedule I),program changes (Budget Detail), profile data sheet, comparative data schedule, capital budget,sales & services detail by DeptID, source/use analysis and a detailed carry forward budget. Inaddition, all Schools are asked to submit a complete roster of budgeted positions. The total FTEand compensation dollars in the roster should match the total FTE in your profile data andcompensation dollars in your budgets (50XX accounts).A signed original of the final narrative for inclusion in the Trustee mailing should be forwardedto Finance and Planning. Budget policy and major economic assumptions are provided to assistyou in budget development. (See Policies and Procedures and Appendix)

We ask that each school provide complete and accurate information on time. Complete budgetsare due on or before February 4, 2008. If any specific information is not available or notapplicable, please leave blank and note the exception.

A. Narrative



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The emphasis of the narrative or executive summary is to discuss the status of the school(strengths, weakness/threats, opportunities and strategies), the critical budget factors and onlythose operating and capital budget plans that bear major significance to strategies (referencingboth the operating budget size and significant capital plans). As a guideline, 3-5 pages in lengthare suggested for this executive summary. As you build your budgets for FY 2009-2011, pleasenarrate any major variances to last year's 2009 and 2010 submission.

B. Budget Detail of Program and Economic Changes (Replaces Schedule II)

(See sample Budget Detail template on next page)

Please check to insure FY 2007 actuals match PeopleSoft reports and that the FY 2008 budgetmatches the Trustee budget.

FY 2009 Program ChangeUsing your three year plan for FY 2009-11, place the dollar impact of all FY09 program changesin column 4, on the Detail Budget, by line item category of income or expense. Column 4

should contain not only the dollar impact of program additions or deletions but also adjustmentsto the FY08 budget reflecting realignments since the budget voted by the Trustees in May, 2007.Inflation, merit increases and fringe benefit rate changes on base budgets should be reflected intheFY09 Economic Change column(5). Any figures (income or expense) contained in column(4) must be explained in column 8.

FY 2009 Economic ChangeColumn 5, Schedule I should only contain the dollar impact of economic adjustments includinginflation, merit and fringe rate changes. Changes to line items that vary from the inflationguidelines must be explained.

FY 2010 and FY 2011 BudgetsColumns 9 and 10 reflect the estimated costs of planned programs for those fiscal years. Thesebudgets should be calculated in escalated dollars, adjusted for inflation, merit increases andprogrammatic changes. If these adjustments differ from recommended economic and budgetaryguidelines, explanations should be provided in the school narrative.

Describe the change and identify revenue, staffing and other expense implications in the programchange column of this schedule in column (11). Provide the justification for the change, citingthe three year strategic plan as necessary.

B. Budget Detail of Program and Economic Changes (Replaces Schedule II)



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C. Operating Budget Statement, Schedule I



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After you have completed the operating detail budget, confirm that the detail totals match thetotals in the Operating Budget Statement, Schedule I.

All FY 2009-11 budget statements must balance income and expense as directed by Trusteepolicy, unless previously authorized. The following is an explanation of the school's operatingbudget statement to be used to translate the school's three year plan and programs into budgetsby fiscal year and major category lines of income and expense. The Schedule I displays columnsfor FY 2007 actuals, FY 2008 budget and the FY 2009-11 budget requests summarized byrevenue and expense categories.

D. Sales & Services



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Where appropriate to the mission of your school, please update the tab, detailed by dept id, thatsupports your clinical and other activities revenue and expense budgets. This schedule shouldinclude information that ties to the operating statement for FY 2007 actuals through FY 2011budget.

E. Carry Forward Budgets

Schools are asked to provide a budget for all carry forward dept ids. Using the carry forwardreport, budget anticipated changes to revenue, expense, and final balances.

F. Source/Use Analysis

Each school should prepare and submit a source/use analysis plan for FY 2009-11. A sampletemplate and training will be provided.

G. Compensation Roster of Budgeted Positions and Merit Analysis.

FY 2008 Compensation Roster

Name Title Dept FTE

FTE by

DEPT % Distr

FTE by

%

Full

Salary Acct Dist Salary Is Faculty

(1) (2) (3) (4) (5) (6) (7) (8)

Department 1

The total FTE listed for all positions in the roster should be equal to the total faculty and non-faculty FTE reported in the Profile Data sheet.

The total compensation in the compensation roster must equal the total of all compensationaccounts (50XX) in the budget upload.

H. Capital Budget

An example of a detailed capital budget template is included in the Appendix. Total projectcosts and total funding sources must be equal. Project completion is dependent upon the timingof construction and the availability of resources. The detailed capital plan will be reviewed byOperations, Advancement and Finance & Planning.

Detailed capital plans are due December 14, 2007. Templates to submit capital plans are e-mailed the first week of November. If you have any questions or concerns, please contact BetseyAnderson at X73716.

BUDGET PROCESS:

IV. Closure



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Budget Process

Overview

The final step in the budget development process places the budget data into PeopleSoft for thecoming year. Each school should submit its upload file to Finance and Planning beginning May21stand prior to Friday, May 30th. (See Appendix for instructions).

New Dept ids, Allocation Changes and Recurring Entries

If you require new dept ids for FY 2009, please submit a Dept id Create Form to F&P beforesubmitting the upload file containing the budget for the new dept id. This will ensure that thebudget will be accepted into PeopleSoft. Also, if you are responsible for any allocations orrecurring entries, you should contact F&P to update, create or delete these as necessary beforethe start of the new fiscal year.



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Policies and Procedures

POLICIES AND PROCEDURES:

I. Economic Guidelines

The Finance & Planning Office has assembled and summarized a selection of the most recentforecasts of economic factors that may influence budget development. This fact sheet presentseconomic assumptions for areas such as salary and wages, employee benefits, books, utilities and

indirect cost rates. (See Appendix) These data are presented in an historical trend, listing budgetassumptions for FY 2007-2008 and a forecast of assumptions for FY 2009 2011. These factorsshould be incorporated in each school's budget development and are subject to TrusteeAdministration and Finance approval in February. If a school finds it necessary to deviate fromthese factors, the school narrative should highlight the change and the underlying factors for thechange.

POLICIES AND PROCEDURES:

II. University Budget Policies and Procedures

Overview

This section describes the major University assumptions to be incorporated in each school's three- year assumptions and budget plans. As with the economic assumptions, deviations from theseUniversity budget policy issues should be identified in the school narrative.

A. Revenue Budget Policies and Procedures

1. Tuition and Fees will be determined by each school taking into consideration the followingfactors:

Position in the marketplace;

National applicant pool trends and school applicant acceptance andmatriculation trends;

Extraordinary programmatic needs; and

Level of student financial aid required.

2. Government Grants and Contracts should be budgeted using the following guidelines:

Each school should work with principal investigators and their grantmanagers to determine a realistic level of outside funding (as well as forprivate grants that report on the Contributions and Grants line, see #4).

Schools should request input from Sponsored Program Accounting andGrants & Contracts Administration to determine new and changing fundingof grants and contracts.


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The budget for sponsored income should always equal the sum of sponsoredexpense line budgets. (Total revenue = total expense + financial aidexpense).

ICR (F&A) income will be budgeted in accordance with projected grantactivity levels

Current and projected indirect cost rates developed by Finance & Planning

should be used where appropriate. Adjustments should be made where grantsare unable to fund the authorized University rates.

A percent of the ICR (use allowance) income is budgeted as RR&R. Thisamount represents the recovery on building and equipment use allowanceincluded in the facilities and administration cost recovery rate.

The Medford campus use allowance rate for FY 2009-2011 is 16.6%. TheHealth Sciences use allowance rate for FY 2009-2011 is 15.5%.

3. Sales and Services, commonly known as Organized Activities, includes revenues derivedfrom the sale of goods or services that are produced in conjunction with the school mission ofinstruction, research and public service. Auxiliary Enterprises includes revenues derived

from the sale of such services as dining, dormitories, conferences, bookstores, and healthservices. Both operate within the following guidelines:

A policy will be maintained that each activity should break-even unlessdirectly associated with the success of the academic program.

Activities will be fully costed including O&M of Plant, debt service, andcapital maintenance costs.

Schools will plan budgets considering past history, current performance andfuture programs.

4. Contributions and Grants. Each school should work with Advancement in defining its

individual annual and capital fundraising goals. Gift estimates are now divided intounrestricted (annual fund) and restricted gifts (restricted/carry forwards).Advancement will provide proposed annual fund goals for the FY 2009-11timeframe.

5. Endowment Payout Policy is developed by the Investment Committee of the Board ofTrustees and approved by the full Board on a periodic basis. The current policyincreases spending by 4% per year. The policy also limits the spending rate,requiring adjustments if the rate does not remain within a range of 4.5% to 5.5% ofthe December endowment market value. The following policies remain the same:

Non-pooled funds pay out interest and dividend income earned. Budgetprojections are based on the yield of the current portfolios.

Additions to principal will be factored into the budget if the funds have beenactually received or payment on a predetermined pledge has been recorded.

Endowment estimates for FY 2008-11 will be forwarded to each school byKaren Pepper (x72201) from Finance & Planning.


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B. Expense Budget Policies and Procedures

1. Deferred Maintenance and Facilities Renewal and Replacement

The Trustees approved a deferred maintenance plan which addresses the current backlog ofbuilding deficiencies and provides for future facilities renewal and replacement. The plan was

the result of a comprehensive survey by an outside engineering firm of all buildings, roads,walkways, site utilities and landscaping. Policies and procedures were established to prioritizeexisting deficiencies, maintain the data and develop strategies to fund deferred maintenance forthe long term. (See tables that follow on pages 17, 18 & 19).

Funding is at a University level and includes the major components in following tables. CapitalCampaign and grants are not included in these tables as they have no budget impact.

Summar2008 2009 2010 2011

Annual Funding 14,266,485 15,061,515 16,095,599 17,188,062


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FY 2009

A&S Medical Cummings Fletcher Dental Friedman Central TischColl Oprtns T

O&M Capital & UtilityReserves @ 50% 50,000 140,582 29,685 10,160 0 3,386 31,436 0 2

Current O&M Budgetused for Def Maint 511,284 82,651 20,009 19,502 18,625 74 55,590 1,645 7

Building Reserves 244,018 97,710 6,532 9,308 36,420 117 30,555 785 4

B&G Admin Reserves 106,969 42,834 2,864 4,080 15,965 52 13,1395 344 1

chool RR&R Funding 658,500 161,100 162,750 49,050 179,550 7,350 281,700 0 1,5

Use Allowance 461,374 0 429,207 25,979 70,619 16,144 0 0 1,0

Capital Maintenance 7,558,095 1,717,958 720,331 285,967 622,307 78,674 949,254 25,704 11,9

Debt Savings 363,324 0 0 0 0 0 0 0 3

Totals 9,953,564 2,242,835 1,371,378 404,046 943,486 105,797 1,361,930 28,478 0 16,4

Less: M&V Retrofit(1,200,000

) (1,2

Less: Future DM Study (94,806) (21,549) (9,036) (3,587) (7,806) (987) (11,907) (322) 0 (1

Total DeferredMaintenance Funding 9,858,758 1,021,286 1,362,342 400,459 935,680 104,810 1,350,023 28,156 0 15,0


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FY 2010


&M Capital & Utilityserves @ 50% 50,000 140,582 29,685 10,160 0 3,386 31,436 0 2

rrent O&M Budgeted for Def Maint 528,318 88,099 21,228 20,390 19,348 77 55,216 1,755 7

ilding Reserves

252,146 100,519 6,734 9,731 37,643 119 30,478 838 4&G Admin Reserves 110,533 44,065 2,952 4,266 16,502 52 13,361 367 1

hool RR&R Funding 658,500 161,100 162,750 49,050 179,550 7,350 281,700 0 1,5

e Allowance 477,915 0 444,334 26,908 73,187 16,778 0 0 1,0

pital Maintenance 8,069,104 1,730,379 768,826 309,359 769,823 78,814 966,779 28,307 12,7

bt Savings 327,578 0 0 0 0 0 0 0 3

pital Renewals 35,746 86,794 9,026 0 5,050 16,606 56,550 0 17,750 2

tals 10,509,840 2,351,538 1,445,535 429,864 1,101,103 123,182 1,435,520 31,267 17,750 17,4

ss: M&V Retrofit (1,200,000)

ss: Future DM Study (95,144) (20,403) (9,065) (3,648) (9,077) (929) (11,400) (334) 0 (1

tal Deferredaintenance Funding 10,414,696 1,131,135 1,436,470 426,216 1,092,026 122,253 1,424,120 30,933 17,750 16,0


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FY 2011


O&M Capital & UtilityReserves @ 50% 50,000 140,582 29,685 10,160 0 3,386 31,436 0 2

Current O&M Budgetused for Def Maint 556,131 93,901 22,527 17,823 20,089 80 48,414 1,496

Building Reserves

265,421 103,437 6,939 8,506 38,878 118 27,341 714B&G Admin Reserves 116,353 45,344 3,042 3,729 17,043 52 11,986 313

chool RR&R Funding 658,500 161,100 162,750 49,050 179,550 7,350 281,700 0 1,5

Use Allowance 494,952 0 459,914 27,865 75,833 17,432 0 0 1,

Capital Maintenance 8,789,319 1,746,042 819,137 274,520 922,893 79,279 876,114 24,705 13,

Debt Savings 290,760 0 0 0 0 0 0 0

Capital Renewals 72,564 176,192 18,323 2,500 10,252 33,710 114,797 0 36,033

Totals 11,294,000 2,466,598 1,522,317 394,153 1,264,538 141,407 1,391,788 27,228 36,033 18,

Less: M&V Retrofit (1,200,000) (1,2

Less: Future DM Study (97,428) (19,354) (9,080) (3,043) (10,230) (879) (9,712) (274) 0 (1

Total DeferredMaintenance Funding 11,196,572 1,247,244 1,513,237 391,110 1,254,308 140,528 1,382,076 26,954 36,033 17,18


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2. Information Technology

Details of the FY 2009-11 Budget will be sent to each school by Marybeth Caputo.

3. Non - Faculty Merit Increase

In early October, the Human Resources Office developed estimates for the non-faculty meritincrease pools based on market and employment data. The recommendation is for an annualmerit pool average of 3.5% University-wide for FY 2009 and 3.5% for the out years.

4. Faculty Merit Increase

Each school competes for faculty members in its own regional and national markets, and willrecommend to the President and administration appropriate salary pools.

5. Employee Fringe Benefits

University policy is to remain competitive in our total compensation package. The unrestrictedfringe benefit rate for full time employees will be 26.5% in FY 2009, 27% in FY 2010 and27.5% in FY 2011. The part time rate will be 8.5% from FY 2008-10. We continue to monitorthe changes in the health care industry to ensure appropriate levels of funding. The economicand budgetary guidelines, located in the Appendix, contain both the unrestricted and restrictedrates.

6. Institutional Support and School and University Resources

The Central Administration budget will be established each year at a fixed dollar amount.The budget will be approved by the President and will continue to be open to BFOs and deanscomments. The cost of the Central Administration budget will be shared among the schools.Each school's percentage share will be fixed at the percentage that each school's 10% assessmentbore to the total assessment for FY 1995 as listed below:

Arts & Sciences 54.1%Fletcher 3.4%Friedman 1.0%Medical 20.6%Dental 10.4%Veterinary 10.5%

Additionally, 10% of school revenues (excess assessment) shall continue to be calculated for thepurpose of sharing any surplus in excess of each school's fixed assessment with the University.Specifically, if 10% of revenues (less restricted aid, bequests and instrumentation grants) exceedits Central assessment (fixed amount), the excess will be split equally between the School andUniversity. The School's share is defined as surplus (and therefore, directed to the school RR&Rreserve); the University share is added to its reserves. Both the school and University excessassessments are reported on the RR&R operating statement line


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7. Structural Deficit Funding

Each School's share is derived from its portion of the Central Administration budget after theCummings School of Veterinary Medicine's share is redistributed. The FY 2008-11 budgets

should present these amounts in the transfer section of the operating statement as "RR&R". Thefollowing table includes the contributions for FY 2008 FY 2011. (3% per year increases withthe Cummings School decreasing by $170,000 per year).

8. Contingency Margin

The contingency margin budget represents funds available to cover unanticipated risks, thatis, revenue or expense changes that could lead to an operating deficit. Continued reliance ontraditional revenue sources poses a risk. Additionally, programs dependent on decliningenrollment markets, federal funding and patient availability may suffer revenue losses asevidenced by past experience.

Schools should weigh individual risks to determine contingency margin budget requirements.

9. Other / Shared Costs

Schedules for items common to all schools will be forwarded to you by the office responsiblefor compiling the information. These include:

2008 2009 2010 2011

Central Administration $1,133,158 $1,167,153 $1,202,167 $1,238,232

O&M $755,074 $777,727 $801,058 $825,090

Cummings $1,352,762 $1,182,762 $1,012,762 $842,762

Arts & Sciences $960,507 $989,322 $1,019,002 $1,049,572

Fletcher $59,007 $60,777 $62,600 $64,479

Freidman $17,736 $18,268 $18,816 $19,381

Medical $364,972 $375,921 $387,199 $398,815

Dental $183,536 $189,042 $194,713 $200,555

Total $4,826,752 $4,760,972 $4,698,317 $4,638,886


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Bad debt reserves - budgeted annually for potential uncollectible student receivables andloans receivable: Dick Doolin (x 73140), clinic receivables: Ed Mahoney (x75280) willprovide an estimate for each school as appropriate.

Weekly Salary Accruals - Finance & Planning will provide estimates for each school. John

Walker (x 73816) will communicate these amounts to all schools.

Faculty Salary Accruals - budgeted annually to accrue for faculty salaries, which are paid outover a 12 month period versus a 9 month academic period. The amount is calculated byapplying future year merit and fringe rate assumptions against current year faculty salarybases. Contact John Walker (x 73816).

Internal Loan Repayments - as provided by Finance & Planning, reflects payments due to theUniversity for internal borrowing. Contact John Walker (x 73816)

Telecommunications, Library Automation - Contact Marybeth Caputo (x 72615)

TNEMC, Health Services Boston, Health Sciences Library - Contact Joe Carroll (x 66549)

Student Services - Contact Rich Kelley (x 73756 Medford), Joe Carroll (x 66549 Boston)

Annual Fund Projections Schools should work with their respective Advancement Officers.

C. Transfer Budgets

This category includes those transfers from the current operating funds group to other fundgroups made at the discretion of the Board of Trustees and administration to serve a variety ofobjectives. Specific line designations have been developed on the school's operating statement toreport the income and expense transfers in accordance with generally accepted accountingprinciples.

1. Reserves for Renewals and Replacement Transfers

The renewals and replacement reserve (reserve funding) category is designated to transfercurrent funds to plant funds for future plant projects. This includes: use allowance, deferredmaintenance, department, building, insurance and school reserves, internal loan repayments, andstructural deficit funding.

Account 7002, Transfer To/From Reserves, is used to record these budgets on theRR&R line.

2. Unexpended Plant Transfer (Capital Project Funding)


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The unexpended plant transfer category is designated to transfer current fund balances to theplant fund for capital equipment, project construction or acquisition of physical property.

Account 7006, Transfer To/From Cea Projects, is used for this activity.Account 7018, CEA's funded from Carry Forward Dept Ids, is used to record this

activity when the funding for a capital expenditure is from a carry forward deptid.

3. Other Transfers

These include transfers for the administration of student loans and endowments.

Account 7004, Transfer To/From Loan Funds, records budget and actual studentloan transfers. This account must be used to budget current fund expenses beingtransferred to the student loan general ledger.

Endowment Funds Transfer

Account 7005, Transfer To/From Endowments, records budget and actual currentfund transfers to Unrestricted Endowment. If prior knowledge of thesetransactions is known, you should budget your Dept ids accordingly.


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Appendix

Economic and Budget Assumptions

FY 2008-2011 FY 2008 FY 2009 FY 2010 FY 2011

Budget Budget Budget Budget

Salary and Wages

Non-Faculty Merit 3.5% 3.5% 3.5% 3.5%

Average Market Pool Adjustment 1.0% 1.0% 1.0% 1.0%

Employee Fringe Benefits

Unrestricted Funds

Full-Time Rate 26.5% 26.5% 27% 27.5%

Mandated Rate 8.5% 8.5% 8.5% 8.5%

Restricted Funds

Full-Time Rate 25.7% 27.2% 27.2% 27.2%

Mandated Rate 8.5% 8.5% 8.5% 8.5%

Post Doc 15% 15.2% 15.2% 15.2%

Other Costs Annual CPI 3.0% 3.0% 3.0% 3.0%

Capital Equipment 3.0% 4.0% 4.0% 4.0%

Office & Educ. Supplies 3.0% 4.0% 4.0% 4.0%

Books 9.0% 4.0% 4.0% 4.0%

Laboratory Supplies 3.0% 4.0% 4.0% 4.0%

Lab Instrumentation 3.0% 4.0% 4.0% 4.0%

Chemicals 3.0% 4.0% 4.0% 4.0%

Food & Commodities 3.0% 4.0% 4.0% 4.0%

Trans. & Lodging 3.0% 4.0% 4.0% 4.0%

Telecommunications

Monthly RateBoston $44.00 $46.00 $46.00 $46.00

Grafton $34.00 $35.00 $35.00 $35.00

Medford $52.00 $52.00 $52.00 $52.00

Utilities

Betsey Isenstein will provide FY 2009-2011 projections by school.

Indirect Cost Rates

Health Sciences:

Research On Campus 64.0% 64.5% 65.0% 65.0%

Research Off Campus 26.0% 26.0% 26.0% 26.0%

Other Spon. On Campus 37.0% 37.0% 37.0% 37.0%Other Spon. Off Campus 26.0% 26.0% 26.0% 26.0%

Independent Operations 10.0% 10.0% 10.0% 10.0%

Medford Campus:

Research On Campus 53.5% 53.5% 53.5% 53.5%

Research Off Campus 26.0% 26.0% 26.0% 26.0%

Other Spon. On Campus 36.5% 36.5% 36.5% 36.5%

Other Spon. Off Campus 26.0% 26.0% 26.0% 26.0%


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Appendix

Budget Uploading

The FY09 budget will be uploaded into PeopleSoft by Finance and Planning. Templates havebeen provided in each schools network drive to submit the budget upload. Note that revenue isuploaded as a negative number and, financial aid, a deduction to revenue, is uploaded as a

positive number. Please verify that the totals for each revenue and expense line in the budgetupload file match the total revenue and expense lines in the approved FY09 budget beforenotifying F&P that the templates are ready for uploading.

Sample Upload Templates for FY 2009 (Note: samples are only part of an upload file)

Budget Revenue

Account Dept ID Year Amount Operating Statement

ORG 4001 V000100 2009 -10979010.00 Tuition & Fees

ORG 4004 V000100 2009 -74160.00 Other Tuition Related Fees

ORG 4001 V000110 2009 -98500.00 PhD

ORG 4005 V350500 2009 -1500.00 CFA Application Fees

ORG 4005 V410100 2009 -45750.00 Application Fees

-11198920.00 Total Tuition & Fees

ORG 5200 V410600 2009 596888.00 Scholarships

ORG 5200 V800886 2009 413374.00 Carry Forward Student Aid

ORG 5200 V800887 2009 80000.00 Fed Student Aid

ORG 5200 V800888 2009 30000.00 State Student AidORG 5200 V800889 2009 11000.00 Private Student Aid

1131262.00 Total Financial Aid

Budget Expense

Account Dept ID Year Amount

ORG 5004 N200200 2009 416752.00

ORG 5007 N200200 2009 143830.00

ORG 5011 N200200 2009 98801.00ORG 5012 N200200 2009 24059.00

ORG 5051 N200200 2009 333270.00

ORG 5055 N200200 2009 12226.00

899938.00 Total Instruction


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Fy09 Bud Dev Manual

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