Position Budgeting Seminar

Presented by:The Office of Planning, Budget &

Analysis

Learning Objectives

At the conclusion of this lesson you will be able to:• describe the fundamental budget practices for an

academic environment• identify the key concepts and methodology to

develop a personnel budget • understand and adjust the variables to model a

fully funded position• differentiate between centrally funded benefits

and department-funded benefits• utilize the financial tools (Banner/UMDW) to

analyze the budget status of a position

Position Budgeting

• Definition: Budget for a specific position not a specific person

– Banner as a system is built on Organizations– Each Organization has Positions as part of the team– Individuals are placed into the positions

• Know your funding streams before you hire!

S alar ie s5 9 %

B e n e fi ts1 8 %

O p e r ati n g C o sts1 1 %

Eq u ip m e n t an d C ap ita l

2 %

S c h o lar sh ip s an d F e llo w sh ip s

8 %

Tr an sfe r s2 % General Funds – Uses

Why Position Budgeting (1 of 5)

77%

Designated Funds – Uses

S alar ie s$ 1 1 ,5 9 1 ,4 5 0

2 5 %

B e n e fi ts3 ,9 4 7 ,9 0 1

8 %

O p e r ati n g C o sts2 3 ,7 5 4 ,9 9 7

5 1 %

Eq u ip m e n t an d C ap ita l

1 ,6 5 6 ,9 5 8 3 %

S c h o lar sh ip s an d F e llo w sh ip s

1 ,3 6 1 ,4 5 0 3 %

Tr an sfe r s4 ,6 3 3 ,6 5 5

1 0 %

Why Position Budgeting (2 of 5)

33%

Auxiliary Funds – Uses

S alar ie s$ 1 6 ,2 2 4 ,0 1 7

3 4 .9 %

B e n e fi ts4 ,9 7 4 ,9 2 4

1 0 .7 %

O p e r ati n g C o sts1 7 ,4 6 8 ,2 5 6

3 7 .6 %

Eq u ip m e n t an d C ap ita l

1 7 7 ,3 6 5 0 .4 %

Tr an sfe r s7 ,5 9 8 ,2 2 5

1 6 .4 %

Why Position Budgeting (3 of 5)

46%

Why Position Budgeting (4 of 5)

46%

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2005 2006 2007 2008 2009 2010 2011

Annual Health Insurance Costs

$5,520

$8,796

Why Position Budgeting (5 of 5)

• Salaries/Wages & Benefits – University’s #1 expense– General Funds – $109,135,744– Designated Funds– $ 14,539,351– Auxiliary Funds – $ 21,196,941– Restricted Funds – $ 43,623,931– Plant Funds – $ 630,000

FY10 Budget - $189,425,967

• Health Ins-FY05 was $5,520/yr in FY11 will be $8,796/yr

• Position Budgets versus Account Code Budgets– Using Banner as intended– UM Data Warehouse (UMDW) tools

The Academic Environment (1 of 5)

• Employee Classifications– Faculty

• Tenured, Tenure Track, Adjunct…• Fiscal Year, Academic Year, Merits, Markets and Extra

Comp… – Research Faculty, Assistants and Staff– Contract Administrators/Contract Professionals

• On-going, Letter of Appointment, Temporary…– Classified Staff

• Union, Exempt, High Risk, Low Risk, Temporary…• Longevity, Career Ladders, Lump Sum Bonuses,

Overtime…– Students

• Graduate Teaching Assistants (GTA), Graduate Research Assistants (GRA), Non-Work Study, Work Study (Federal or State), Full Time, Less than 6 Credit Hours…

– FTE, Pay Plans, Strategic Pay Increases, Stipends, Pooled Positions, Termination Pay…

• Temporary Employees– Pooled Positions – Single Positions– Duration of Employment– Obligation to Pay Benefits

• Health Insurance• Retirement Plans• Accrue Annual Vacation and Sick Time Hours

The Academic Environment (2 of 5)

The Academic Environment (3 of 5)

• Possible Funding Streams– General Funds

• Base Budget• One Time Only (OTO)

– Designated Funds– Auxiliary Funds– Restricted Funds

• Research• Gifts

– Plant Funds

The Academic Environment (4 of 5)

• Program Integrity– Instruction– Research– Public Service– Academic Support– Student Services– Institutional Support– Plant and Maintenance– Scholarships

FY10 Budgeted General Funds by Program

In str u c ti o n6 9 ,2 9 7 ,0 9 3

4 9 %

R e se ar c h1 ,7 0 3 ,7 9 0

1 %P u b lic S e r v ic e1 ,4 0 6 ,7 0 1

1 %

A c ad e m ic S u p p o r t1 7 ,9 2 0 ,4 5 2

1 3 %

S tu d e n t S e r v ic e s9 ,0 3 8 ,7 5 5

6 %

In sti tu ti o n al S u p p o r t

1 4 ,8 5 8 ,1 7 1 1 0 %

O & M P lan t1 6 ,2 9 9 ,7 2 5

1 2 %

S c h o lar sh ip s & F e llo w sh ip s1 1 ,7 2 3 ,7 4 1

8 %

The Academic Environment (5 of 5)

Model a Fully Funded Position

• Remember a Model helps to Answer “What if?”• Best Guess based on Past Practice, Facts &

Assumptions• What is the Most Likely versus Worst Case

– Known funding streams or “soft” money– For SPABA funds intentionally setting aside a reserve

just in case

Model a Personnel Budget (1 of 4)

Benefits & Other Payroll Expenses

• What are Centrally Funded Benefits?– How are they calculated?– The dilemma of base funding vs. OTO funding

• What are Department (Designated/Auxiliary/Restricted) Funded Benefits?– How are they calculated?

Model a Personnel Budget (2 of 4)

Model a Personnel Budget (3 of 4)

Model a Personnel Budget (4 of 4)

Break!

Using UMDW/Banner

• Individual Positions Numbers– Organizations have assigned series

• Pooled Position Numbers– First half of the number indicates type of pool– Second half of the number indicates in which

department

Newer pooled position structure

that was implemented in

FY09

Pooled Position Numbering

Use the parameters 61, 62, and 63 in account type field to exclude benefits expense

UMDW

UMDW Employee Budget/Actual

Banner (1 of 9)

Banner (2 of 9)

Banner (3 of 9)

Comments are added for each budget adjustment within this screen, including date, amount of adjustment, index code to/from, and short explanation

Banner (4 of 9)

Banner (5 of 9)

Banner (6 of 9)

Banner (7 of 9)

Banner (8 of 9)

Banner (9 of 9)

UMDW Employee Budget/Actual

RBC – General Funds (1 of 2)

RBC – General Funds (2 of 2)

RBC – Des/Aux Funds (1 of 2)

RBC – Des/Aux Funds (2 of 2)

Position Budgets – Des/Aux (1 of 2)

Position Budgets – Des/Aux (2 of 2)

Position Budgets – General Funds

Review

• describe the fundamental budget practices for an academic environment

• identify the key concepts and methodology to develop a personnel budget

• understand and adjust the variables to model a fully funded position

• differentiate between centrally funded benefits and department-funded benefits

• utilize the financial tools (Banner/UMDW) to analyze the budget status of a position

Discussion

Future Events

• Position Budget Training - Thursday, January 28th

• Designated and Auxiliary Fund Operating Plans Training– Thursday, February 4th

• Build Designated/Auxiliary Budgets - Thursday, February 11th or - Thursday, March 11th

• General Funds Budget Training - Wednesday, April 21st or - Thursday, April 22nd