admin
Fri, 02/13/2026 - 20:31
Edited Text
A Draft For Discussion & Further
Development:
Funding Clarion Now &
For The Future
Ensuring Our Financial Capacity to
Achieve Our Mission
Dr. Karen M. Whitney, President
Presidential Priority
Lead the university community to organize itself to
ensure the future fiscal capacity of the university
Goal: Establish a financial system called responsibility
centered management (RCM) in order to ensure mission
driven, evidenced based fiscal decisions.
Actions:
a. Develop a financial planning model that will help inform
expenditure and revenue decisions.
b. Consider changes in the university organizational structure
in order to establish RCM.
c. Provide support to the faculty and staff through the Office
of Planning, Assessment, and Institutional Improvement.
Desired Results: A financial planning model will be created
and in use throughout the university by the Provost, Vice
Presidents, Deans, Department Chairs and Directors.
2/25/2011
Funding Clarion Now & For The Future
2
The Difficult Truth
• The State Will Continue To Fund Us Less and
Less: This is a permanent change.
• High frustration and dissatisfaction with the
budget.
• Our Challenge: Ensure our financial capacity to
achieve our mission through increasing
revenue & controlling our costs
2/25/2011
Funding Clarion Now & For The Future
3
The State Will Continue To Fund Us Less
and Less: This is a permanent change.
• Governor Corbett “has pledged to balance the
state budget that starts July 1 without raising
taxes despite a projected deficit of at least
$4 billion.” Jan. 26, 2011 The Derrick.
2/25/2011
Funding Clarion Now & For The Future
4
The Problem
Our money going out
(expenses) is increasing faster
than our money coming in
(revenues).
2/25/2011
Funding Clarion Now & For The Future
5
The Future If We Do Not Change
COMPARISON OF UNDESIGNATED CARRYFORWARD BALANCES AND
REQUIRED DEFICIT REDUCTIONS FY03 - FY15
$2,000,000
$1,163,226
$1,000,000
$0
$784,491
$559,896 -$770,224
$300,000
-$58,547
$279,973
$0
$0
($1,000,000)
-$1,289,573
($2,000,000)
-$1,962,374
-$2,400,079
-$2,006,289
($3,000,000)
-$1,556,500
-$1,948,432
-$2,606,721
-$3,453,211
($4,000,000)
($5,000,000)
-$4,754,256
($6,000,000)
-$6,545,296
($7,000,000)
($8,000,000)
-$7,944,471
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Fiscal Year
Undesigated Carryforward
2/25/2011
Funded by Reserves
Funding Clarion Now & For The Future
Deficit Reduction
6
Major Projected Budget Assumptions
FY12 Assumptions:
0% State Appropriation increase; 43.6% Performance Funding decrease; 3.0% Tuition
increase; 0% Enrollment increase.
1.3% Salary increases; 10% Health Care Benefit increases; 21.1% Retirement
increases;
FY13 Assumptions:
0% State Appropriation decrease; 0% Performance Funding increase; 4% Tuition
increase; 0% Enrollment increase.
2% Salary increases; 10% Health Care Benefit increases; 21.9% Retirement increases;
9.8% Utility increases
FY14 Assumptions:
0% State Appropriation increase; 0% Performance Funding increase; 4% Tuition
increase; 0% Enrollment increase.
3% Salary increases; 8% Health Care Benefit increases; 24.1% Retirement increases;
9% Utility increases
FY15 Assumptions:
2% State Appropriation increase; 2% Performance Funding increase; 4% Tuition
increase; 0% Enrollment increase.
3% Salary increases; 8% Health Care Benefit increases; 20.5% Retirement increases;
9% Utility increases
Note: Assumptions developed based on information provided by PASSHE, as of 8/16/10.
To Move From Survive To Thrive
Courageous, creative, and committed faculty
and staff who are willing to work together to
collectively construct a Clarion University
Financial Framework and A Financial Planning
Model which will guide us in making future
evidenced based, mission driven decisions.
2/25/2011
Funding Clarion Now & For The Future
8
Stages (This IS Going To Take Years)
1. Balancing: Revenues = Expenditures
2. Investing: Revenues Exceed Expenditures;
Invest $$ To Secure Our Future
3. Thriving: Revenues Always Exceed
Expenditures With Sharing Available Revenues
Throughout The Organization
2/25/2011
Funding Clarion Now & For The Future
9
A Quick Intro To Funding Clarion
• Annual Money Going Out To Operate
– Costs/Espenses: What we spend (2009-2010: $108 Million)
• Salaries & Benefits (67%)
• Buildings/Facilities (7%)
• Financial Aid For The Students (6%)
• Dining Hall (4%)
• Supplies (3%)
• Utilities (3%)
• Advertising, Rental, Interest (3%)
• Fund Balance (3%)
• Other (3.5%)
2/25/2011
Funding Clarion Now & For The Future
10
A Quick Intro To Funding Clarion
• Annual Money Coming In (2009-2010: ($108 Million)
– Price: What we charge students for what we do
• Tuition and Fees (34%)
– Subsidy: What others fund us to do
• CU: What we earn from our own efforts
– Grants, Contracts, Sales, Income, Gifts, Investments (38%)
• State appropriations for instruction and infrastructure
(24%)
• Federal appropriations for specific items and financial
aid (4%)
2/25/2011
Funding Clarion Now & For The Future
11
Clarion University of PA - Summary of All Revenues
$40,000,000
$35,000,000
$30,000,000
$25,000,000
Tuition/Fees
Appropriation
$20,000,000
Auxiliary Revenue
Grants/Contracts
Other
$15,000,000
$10,000,000
$5,000,000
$FY03
2/25/2011
FY04
FY05
FY06
FY07
FY08
Funding Clarion Now & For The Future
FY09
FY10
12
State Appropriations & Tuition & Fees As Percentage of Total Revenue
36%
35.0%
34.2%
33.5%
34%
34.0%
33.2%
31.9%
33.1%
32.2%
31.8%
32%
31.8%
30.4%
31.2%
30%
28.2%
28.3%
27.8%
28%
26%
24.3%
24%
FY03
FY04
FY05
FY06
Tuition & Fees
2/25/2011
FY07
FY08
FY09
FY10
State Appropriation
Funding Clarion Now & For The Future
13
Clarion University of PA - Summary of All Expenses
$70,000,000
$60,000,000
$50,000,000
Personnel
$40,000,000
Auxiliary Expenses
Scholarships/Waivers
$30,000,000
Services/Supplies
Other
$20,000,000
$10,000,000
$0
FY03
2/25/2011
FY04
FY05
FY06
FY07
FY08
FY09
Funding Clarion Now & For The Future
FY10
14
Employees By CBA: 2010
Bargaining Unit
Temporary
Temporary
Regular FT Inc (Dec) Regular PT Inc (Dec)
FT
Inc (Dec)
PT
Inc (Dec)
AFSCME
203
(17)
6
4
5
3
14
14
APSCUF
256
(5)
0
-
28
-
107
(6)
APSCUF
Coaches
17
3
5
-
0
-
0
-
Unrepresented
71
(2)
0
-
0
-
0
-
OPEIU
9
-
0
-
0
-
0
-
PSSU
4
-
1
1
0
-
0
-
SCUPA
37
(5)
0
-
0
-
0
-
SPFPA
11
(1)
0
-
0
-
0
-
TOTAL
608
(27)
12
5
33
3
121
8
2009-2010
Bargaining Unit
Avg Base Salary
Regular FT
Annual
Increase
Avg Salary
Regular PT
AFSCME
$
39,863.92
APSCUF
$
85,698.93
7/1/09 GPI – 3.00%
1/1/10 Step – 2.25%
Fall 2009 GPI – 3.00%
Fall 2009 Step –
5.00%
7/1/09 Merit – 3.00%
1/1/10 GPI – 2.25% $
$ 14,696.83
APSCUF Coaches
$
65,050.00
Unrepresented
$
80,611.61
0%
67,125.11
7/1/09 GPI – 3.00%
1/1/10 Step – 2.25%
43,394.00
7/1/09 GPI – 3.00%
1/1/10 Step – 2.25%
51,200.59
7/1/09 GPI – 3.00%
8/29/09 Step – 2.50%
42,352.18
7/1/09 GPI – 3.00%
1/1/10
Step
– 2.25%
Funding
Clarion
Now & For The Future
OPEIU
PSSU
SCUPA
SPFPA
2/25/2011
$
$
$
$
$
Avg Salary
Temporary FT
Avg Salary
Temporary PT
$
28,166.20
$
2,281.79
$
53,020.75
$ 21,186.04
15,049.80
16,430.00
16
Bargaining Unit Increase (Decrease) From 2003 – 2010
Regular FT Regular PT Temporary Temporary
Bargaining Unit
Inc (Dec)
Inc (Dec) FT Inc (Dec) PT Inc (Dec)
AFSCME
(34)
(1)
APSCUF
(7)
-
APSCUF Coaches
1
Unrepresented
OPEIU
(2)
2
4
14
(25)
71
-
-
-
(1)
-
-
-
-
-
PSSU
-
1
-
-
SCUPA
(6)
-
-
(1)
SPFPA
(2)
-
-
-
TOTAL
(48)
(1)
(21)
84
The Past
• Revenue: There has been a shift from the
student paying more and the state paying less.
• Expenses: The largest expenditure is in
people.
The Future
• Must adopt a different way of acquiring
revenues and allocating expenses.
2/25/2011
Funding Clarion Now & For The Future
18
Many Possible
“What We Can Do” Solutions
• Revenue
– Tuition and Fees
– State & Federal Appropriations
– Entrepreneurial Activities
• Expense
– Salaries & Benefits
• Enterprise Solutions
– Revenue and Expense Combinations
2/25/2011
Funding Clarion Now & For The Future
19
Balancing: Revenues = Expenditures
• The Financial Framework
– (RCM or Responsibility Centered Management)
• The Financial Planning Model
– (Revenue Strength; Enrollment Strength; Employer
Strength)
2/25/2011
Funding Clarion Now & For The Future
20
Responsibility Centered Management
(RCM): Definition
• A strategy that treats individual units and
programs as revenue centers. Revenue
centers are allowed to control the revenues
they generate and are responsible for
financing both their direct and indirect
expenses. (National Association of College & University
Business Officers)
2/25/2011
Funding Clarion Now & For The Future
21
What Are The Benefits of RCM?
• RCM promotes
– Disciplined financial decision making
• Responsibility Centers (RCs) are responsible for their own
bottom line
– Entrepreneurial activity
• RCs retain the majority of the revenue they generate, and
reinvest it in their highest priorities
– Shared Fundraising
• President, VPs, Deans are actively engaged in fundraising for
college, school and cross-University priorities
– A Culture of Accountability
• Revenue is distributed in large measure based on course units
taught
• Space charges are directly tied to occupancy and costs
• Administrative units are funded via transparent algorithms
• Colleges & Schools recognize the full costs of their programs
2/25/2011
Funding Clarion Now & For The Future
20
For CU, What Should Be An RC?
At What Level Must We Be Net Revenue Positive?
University
Academic
•
•
•
•
•
•
•
•
•
College
School
Department
Major
Minor
Concentration
Certificate
Course
Workshop
2/25/2011
Infrastructure
• Division
• Department
• Program
• Service
Funding Clarion Now & For The Future
23
Under Development: CU’s Financial
Planning Model: 3 Parts
• Fiscal Strength
– The extent to which revenues meet and/or exceed
expenses. This is our focus this year.
• Enrollment Strength
– The extent to which our enrollment meets the desired
results. Will begin work this year into next.
• Employer Strength
– The extent to which graduates become employed
and/or are accepted into graduate programs of their
choice. Will begin work this year into next.
2/25/2011
Funding Clarion Now & For The Future
24
First Thoughts: Revenue Generating
Possibilities
• Online programs
• 3 Year degree programs
• Accelerated Adult Degree
Programs
• Grow High Demand/ Low
Cost Programs
• Growth Investment Fund
• Out of state /
International Student
Recruitment
2/25/2011
• Increase retention
• Increase graduation
• Endowed Scholarships,
Professorships, Programs
• All New Efforts Must Be
Net Revenue Positive
• Grow Winter/Summer
Term Enrollments
• External Funding
• Graduate Programs
Funding Clarion Now & For The Future
25
BOG Recent Changes:
Tuition Policy Allows Greater Flexibility
• Nonresident
• Student Fees
Tuition
• Graduate
• Summer/Winter Tuition
Session Pricing
• Institutional
• Distance
Financial
Aid
Education OffCampus
2/25/2011
Funding Clarion Now & For The Future
26
First Thoughts: Cost Control Efforts
• Critically review our
approach to human
resources to ensure that
each person is doing their
highest best work for the
university
• Purchasing Consolidation
• IT Centralization
• Increase Program
Productivity
• Program Eliminations
2/25/2011
• Improve our processes
and programs
• Assess degree progress to
determine pedagogical
effectiveness
• Schedule courses more
efficiently to ensure
matriculation and
maximizing resources
• Identify and delete
outdated courses
Funding Clarion Now & For The Future
27
Made Up Examples
DEPARTMENT
CREDIT TOTAL APPR
HRS
GENERATED
TUITION REVENUE
GENERATED
INFRAS
REV
TOTAL
REVENUE
DEPART
COSTS
INFRAS
COSTS
TOTAL
COSTS
NET INCOME
(LOSS)
9646
1,223,697
2,115,365
129,352
3,468,416
(1,300,165)
(1,729,527)
(3,029,693)
438,723
ARCHITECTURE 11425
1,376,400
2,498,304
153,209
4,027,914
(2,601,664)
(2,048,502)
(4,650,167)
(622,252)
3942
2/25/2011
524,781
ENGINEERING
AGRICULTURE
877,478
52,862
1,455,122
(756,670)
Funding Clarion Now & For The Future
(706,800) (1,463,471)
(8,348)
Draft For Discussion:
CU Financial Planning Model
DEPARTMENT
ENGINEERING
Architecture
AGRICULTURE
2/25/2011
Fiscal Strength
438,723
(Net Rev Positive)
(622,252)
(Net Revenue Negative)
(8,348)
(Net Revenue Neutral)
Enrollment
Strength
Employer
Strength
Strong
Strong
Weak
Weak
Strong
Weak
Funding Clarion Now & For The Future
29
We all have a role…
• The Administration will need to:
– Reduce the bureaucracy
– Provide cost-efficient and value-added support
services for faculty, staff and students
• The Students will need to:
– Prepare themselves to work hard, keep focused,
work with faculty and staff and be determined to
graduate
2/25/2011
Funding Clarion Now & For The Future
30
We all have a role…
• The Faculty will need to:
– Contribute to the graduation of our students
– Reduce the time to degree completion
– Offer high impact educational experiences
– Articulate relevant and measureable learning
outcomes
– Offer more course options
– Streamline and align curricula and curricula
related requirements
2/25/2011
Funding Clarion Now & For The Future
31
We all have a role…
• Alumni
– Mentor students
– Assist students with job placement
– Fund scholarships
• Employers/Industry/Business
– Hire our students while at CU and upon graduation
– Provide advise regarding current & future credentials
– Fund scholarships & Fund program/faculty
endowments
2/25/2011
Funding Clarion Now & For The Future
32
We all have a role…
• The Community
– Express Golden Eagle Pride
– Continue the long tradition of “Clarion Cares”
about the CU students.
– Continue and expand campus and community
partnerships
2/25/2011
Funding Clarion Now & For The Future
33
Time Line
• Fall 2010
– Conduct a “Hitting The Ground Listening” effort
with a findings report on the web. Outcome:
Financial stewardship and the need for change
emerged as a major theme.
– Discussions/dialogue with the university
community regarding the benefits of
constructing a financial planning model and
using RCM as a financial framework.
– Begin to develop a new financial planning model
with Vice Presidents and Deans.
– Begin to apply parts of an emerging model to
future hiring decisions to determine the level of
“confidence” in making hiring commitments.
2/25/2011
Funding Clarion Now & For The Future
34
Time Line
• Spring 2011
– Continue development of a financial
planning model with Vice Presidents,
Deans, Departments Chairs and Directors.
– Engage in discussion and build a proposed
RCM and financial planning model
– Make Clear Our Financial Situation; Construct A CU
RCM approach and Financial Planning Model
2/25/2011
Funding Clarion Now & For The Future
35
Time Line
• Summer 2011
– Launch a first version of RCM and a financial
planning model that will help inform expenditure
and revenue decisions. This version will be piloted
and evaluated July 1, 2011 – June 30 2013.
• 2011 – 2012: Launch RCM & The Planning Model
holding every unit financially harmless
• 2012 – 2013: All units that do not meet the model’s
expectations will meet at least 50%
• 2013 – 2014: All units meet 100% of the model’s
expectations.
2/25/2011
Funding Clarion Now & For The Future
36
"Big Questions" To be Answered by May 1,
2011 which would go into effect July 1, 2011:
• Define a financial planning model which we
would pilot for 3 years?
– Define our approach to RCM?
– Define what is an RC?
– Select our CU specific performance funding
measurers.
• Within RCM how do we organize Extended
Programs, the Venango Campus, Honors College?
2/25/2011
Funding Clarion Now & For The Future
37
What Are Your Big Questions?
2/25/2011
Funding Clarion Now & For The Future
38
I heard It Through The Grapevine…..
• What if my class costs more than it makes?
• What if my department costs more than it
makes?
• The details of RCM has already been decided.
• The financial formula has already been
decided.
• ?
2/25/2011
Funding Clarion Now & For The Future
39
RCM
• Is a managerial framework for our internal budgeting and
financial reporting activities
• Used by many universities throughout the country since the
early 70s
• RCM was designed to control expense, but has proven to be
an even stronger driver of revenue
• RCM seeks to promote the broadest possible stewardship of
financial resources and to
– Enhance the capacity to generate revenue
– Encourage and reward innovation and efficiency
• Units (Colleges/Schools/Departments) benefit from
entrepreneurial activity: incentives are aligned to promote
stewardship and revenue generation
2/25/2011
Funding Clarion Now & For The Future
40
General RCM Principles
• Divide University into Responsibility Centers. There
are two basic types of Centers:
– Revenue-generating: Colleges, Schools, Resource Centers,
Business Services
– Non-revenue-generating: Administrative/Support Service
Centers
• Revenue-generating centers are expected to:
– fund the direct cost of their own operations
– cover their share of services (Infrastructure) provided by
the Administrative/Support Service Centers (via a formula
of allocated costs)
– maintain internal budget balance
2/25/2011
Funding Clarion Now & For The Future
41
Draft For Discussion: Fiscal Strength:
Defined
• TOTAL APPR GENERATED - Calculated by multiplying credit hours times
the appropriation per credit hour from the Allocation of FY10
Appropriation worksheet.
• TOTAL REVENUE GENERATED - Calculated by multiplying credit hours
times the revenue per credit hour from the FY10 Tuition & ISF Fee
Allocation worksheet.
• INFRASTRUCTURE REVENUE – Consists of all other revenue posted to the
E&G fund that is not appropriation or tuition & ISF fees. Examples would
include interest income, application fees, and late payment fees.
Calculated by multiplying credit hours times the infrastructure revenue
per credit hour from the FY10 Infrastructure Revenue Allocation
worksheet.
• TOTAL REVENUE - The sum of the appropriation, tuition revenue, and
infrastructure revenue columns.
2/25/2011
Funding Clarion Now & For The Future
42
Draft For Discussion: Fiscal Strength:
Defined
• DEPARTMENTAL COSTS – Consists of instruction related costs. Examples
would include faculty and department secretary salary/benefits,
department operating and capital costs. Taken from SAP, added Venango
Academic Program costs where necessary, subtracted certain noncontractual releases and all sabbaticals.
• EXT PROG COSTS - Administrative costs plus revenue share and Wednet
loss, allocated on a per credit basis to Extended Program courses.
• INFRASTRUCTURE COSTS - All E&G costs that are not departmental costs.
Would include any E&G expenditures for public service, academic support,
student services, institutional support, operations and maintenance of
plant, and student aid. Calculated by multiplying credit hours times the
infrastructure expense per credit hour from the FY10 Infrastructure Costs
worksheet.
• TOTAL COSTS - The sum of the departmental, extended program, and
infrastructure costs.
• NET INCOME (LOSS) - Total Revenue minus Total Costs
2/25/2011
Funding Clarion Now & For The Future
43
Development:
Funding Clarion Now &
For The Future
Ensuring Our Financial Capacity to
Achieve Our Mission
Dr. Karen M. Whitney, President
Presidential Priority
Lead the university community to organize itself to
ensure the future fiscal capacity of the university
Goal: Establish a financial system called responsibility
centered management (RCM) in order to ensure mission
driven, evidenced based fiscal decisions.
Actions:
a. Develop a financial planning model that will help inform
expenditure and revenue decisions.
b. Consider changes in the university organizational structure
in order to establish RCM.
c. Provide support to the faculty and staff through the Office
of Planning, Assessment, and Institutional Improvement.
Desired Results: A financial planning model will be created
and in use throughout the university by the Provost, Vice
Presidents, Deans, Department Chairs and Directors.
2/25/2011
Funding Clarion Now & For The Future
2
The Difficult Truth
• The State Will Continue To Fund Us Less and
Less: This is a permanent change.
• High frustration and dissatisfaction with the
budget.
• Our Challenge: Ensure our financial capacity to
achieve our mission through increasing
revenue & controlling our costs
2/25/2011
Funding Clarion Now & For The Future
3
The State Will Continue To Fund Us Less
and Less: This is a permanent change.
• Governor Corbett “has pledged to balance the
state budget that starts July 1 without raising
taxes despite a projected deficit of at least
$4 billion.” Jan. 26, 2011 The Derrick.
2/25/2011
Funding Clarion Now & For The Future
4
The Problem
Our money going out
(expenses) is increasing faster
than our money coming in
(revenues).
2/25/2011
Funding Clarion Now & For The Future
5
The Future If We Do Not Change
COMPARISON OF UNDESIGNATED CARRYFORWARD BALANCES AND
REQUIRED DEFICIT REDUCTIONS FY03 - FY15
$2,000,000
$1,163,226
$1,000,000
$0
$784,491
$559,896 -$770,224
$300,000
-$58,547
$279,973
$0
$0
($1,000,000)
-$1,289,573
($2,000,000)
-$1,962,374
-$2,400,079
-$2,006,289
($3,000,000)
-$1,556,500
-$1,948,432
-$2,606,721
-$3,453,211
($4,000,000)
($5,000,000)
-$4,754,256
($6,000,000)
-$6,545,296
($7,000,000)
($8,000,000)
-$7,944,471
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Fiscal Year
Undesigated Carryforward
2/25/2011
Funded by Reserves
Funding Clarion Now & For The Future
Deficit Reduction
6
Major Projected Budget Assumptions
FY12 Assumptions:
0% State Appropriation increase; 43.6% Performance Funding decrease; 3.0% Tuition
increase; 0% Enrollment increase.
1.3% Salary increases; 10% Health Care Benefit increases; 21.1% Retirement
increases;
FY13 Assumptions:
0% State Appropriation decrease; 0% Performance Funding increase; 4% Tuition
increase; 0% Enrollment increase.
2% Salary increases; 10% Health Care Benefit increases; 21.9% Retirement increases;
9.8% Utility increases
FY14 Assumptions:
0% State Appropriation increase; 0% Performance Funding increase; 4% Tuition
increase; 0% Enrollment increase.
3% Salary increases; 8% Health Care Benefit increases; 24.1% Retirement increases;
9% Utility increases
FY15 Assumptions:
2% State Appropriation increase; 2% Performance Funding increase; 4% Tuition
increase; 0% Enrollment increase.
3% Salary increases; 8% Health Care Benefit increases; 20.5% Retirement increases;
9% Utility increases
Note: Assumptions developed based on information provided by PASSHE, as of 8/16/10.
To Move From Survive To Thrive
Courageous, creative, and committed faculty
and staff who are willing to work together to
collectively construct a Clarion University
Financial Framework and A Financial Planning
Model which will guide us in making future
evidenced based, mission driven decisions.
2/25/2011
Funding Clarion Now & For The Future
8
Stages (This IS Going To Take Years)
1. Balancing: Revenues = Expenditures
2. Investing: Revenues Exceed Expenditures;
Invest $$ To Secure Our Future
3. Thriving: Revenues Always Exceed
Expenditures With Sharing Available Revenues
Throughout The Organization
2/25/2011
Funding Clarion Now & For The Future
9
A Quick Intro To Funding Clarion
• Annual Money Going Out To Operate
– Costs/Espenses: What we spend (2009-2010: $108 Million)
• Salaries & Benefits (67%)
• Buildings/Facilities (7%)
• Financial Aid For The Students (6%)
• Dining Hall (4%)
• Supplies (3%)
• Utilities (3%)
• Advertising, Rental, Interest (3%)
• Fund Balance (3%)
• Other (3.5%)
2/25/2011
Funding Clarion Now & For The Future
10
A Quick Intro To Funding Clarion
• Annual Money Coming In (2009-2010: ($108 Million)
– Price: What we charge students for what we do
• Tuition and Fees (34%)
– Subsidy: What others fund us to do
• CU: What we earn from our own efforts
– Grants, Contracts, Sales, Income, Gifts, Investments (38%)
• State appropriations for instruction and infrastructure
(24%)
• Federal appropriations for specific items and financial
aid (4%)
2/25/2011
Funding Clarion Now & For The Future
11
Clarion University of PA - Summary of All Revenues
$40,000,000
$35,000,000
$30,000,000
$25,000,000
Tuition/Fees
Appropriation
$20,000,000
Auxiliary Revenue
Grants/Contracts
Other
$15,000,000
$10,000,000
$5,000,000
$FY03
2/25/2011
FY04
FY05
FY06
FY07
FY08
Funding Clarion Now & For The Future
FY09
FY10
12
State Appropriations & Tuition & Fees As Percentage of Total Revenue
36%
35.0%
34.2%
33.5%
34%
34.0%
33.2%
31.9%
33.1%
32.2%
31.8%
32%
31.8%
30.4%
31.2%
30%
28.2%
28.3%
27.8%
28%
26%
24.3%
24%
FY03
FY04
FY05
FY06
Tuition & Fees
2/25/2011
FY07
FY08
FY09
FY10
State Appropriation
Funding Clarion Now & For The Future
13
Clarion University of PA - Summary of All Expenses
$70,000,000
$60,000,000
$50,000,000
Personnel
$40,000,000
Auxiliary Expenses
Scholarships/Waivers
$30,000,000
Services/Supplies
Other
$20,000,000
$10,000,000
$0
FY03
2/25/2011
FY04
FY05
FY06
FY07
FY08
FY09
Funding Clarion Now & For The Future
FY10
14
Employees By CBA: 2010
Bargaining Unit
Temporary
Temporary
Regular FT Inc (Dec) Regular PT Inc (Dec)
FT
Inc (Dec)
PT
Inc (Dec)
AFSCME
203
(17)
6
4
5
3
14
14
APSCUF
256
(5)
0
-
28
-
107
(6)
APSCUF
Coaches
17
3
5
-
0
-
0
-
Unrepresented
71
(2)
0
-
0
-
0
-
OPEIU
9
-
0
-
0
-
0
-
PSSU
4
-
1
1
0
-
0
-
SCUPA
37
(5)
0
-
0
-
0
-
SPFPA
11
(1)
0
-
0
-
0
-
TOTAL
608
(27)
12
5
33
3
121
8
2009-2010
Bargaining Unit
Avg Base Salary
Regular FT
Annual
Increase
Avg Salary
Regular PT
AFSCME
$
39,863.92
APSCUF
$
85,698.93
7/1/09 GPI – 3.00%
1/1/10 Step – 2.25%
Fall 2009 GPI – 3.00%
Fall 2009 Step –
5.00%
7/1/09 Merit – 3.00%
1/1/10 GPI – 2.25% $
$ 14,696.83
APSCUF Coaches
$
65,050.00
Unrepresented
$
80,611.61
0%
67,125.11
7/1/09 GPI – 3.00%
1/1/10 Step – 2.25%
43,394.00
7/1/09 GPI – 3.00%
1/1/10 Step – 2.25%
51,200.59
7/1/09 GPI – 3.00%
8/29/09 Step – 2.50%
42,352.18
7/1/09 GPI – 3.00%
1/1/10
Step
– 2.25%
Funding
Clarion
Now & For The Future
OPEIU
PSSU
SCUPA
SPFPA
2/25/2011
$
$
$
$
$
Avg Salary
Temporary FT
Avg Salary
Temporary PT
$
28,166.20
$
2,281.79
$
53,020.75
$ 21,186.04
15,049.80
16,430.00
16
Bargaining Unit Increase (Decrease) From 2003 – 2010
Regular FT Regular PT Temporary Temporary
Bargaining Unit
Inc (Dec)
Inc (Dec) FT Inc (Dec) PT Inc (Dec)
AFSCME
(34)
(1)
APSCUF
(7)
-
APSCUF Coaches
1
Unrepresented
OPEIU
(2)
2
4
14
(25)
71
-
-
-
(1)
-
-
-
-
-
PSSU
-
1
-
-
SCUPA
(6)
-
-
(1)
SPFPA
(2)
-
-
-
TOTAL
(48)
(1)
(21)
84
The Past
• Revenue: There has been a shift from the
student paying more and the state paying less.
• Expenses: The largest expenditure is in
people.
The Future
• Must adopt a different way of acquiring
revenues and allocating expenses.
2/25/2011
Funding Clarion Now & For The Future
18
Many Possible
“What We Can Do” Solutions
• Revenue
– Tuition and Fees
– State & Federal Appropriations
– Entrepreneurial Activities
• Expense
– Salaries & Benefits
• Enterprise Solutions
– Revenue and Expense Combinations
2/25/2011
Funding Clarion Now & For The Future
19
Balancing: Revenues = Expenditures
• The Financial Framework
– (RCM or Responsibility Centered Management)
• The Financial Planning Model
– (Revenue Strength; Enrollment Strength; Employer
Strength)
2/25/2011
Funding Clarion Now & For The Future
20
Responsibility Centered Management
(RCM): Definition
• A strategy that treats individual units and
programs as revenue centers. Revenue
centers are allowed to control the revenues
they generate and are responsible for
financing both their direct and indirect
expenses. (National Association of College & University
Business Officers)
2/25/2011
Funding Clarion Now & For The Future
21
What Are The Benefits of RCM?
• RCM promotes
– Disciplined financial decision making
• Responsibility Centers (RCs) are responsible for their own
bottom line
– Entrepreneurial activity
• RCs retain the majority of the revenue they generate, and
reinvest it in their highest priorities
– Shared Fundraising
• President, VPs, Deans are actively engaged in fundraising for
college, school and cross-University priorities
– A Culture of Accountability
• Revenue is distributed in large measure based on course units
taught
• Space charges are directly tied to occupancy and costs
• Administrative units are funded via transparent algorithms
• Colleges & Schools recognize the full costs of their programs
2/25/2011
Funding Clarion Now & For The Future
20
For CU, What Should Be An RC?
At What Level Must We Be Net Revenue Positive?
University
Academic
•
•
•
•
•
•
•
•
•
College
School
Department
Major
Minor
Concentration
Certificate
Course
Workshop
2/25/2011
Infrastructure
• Division
• Department
• Program
• Service
Funding Clarion Now & For The Future
23
Under Development: CU’s Financial
Planning Model: 3 Parts
• Fiscal Strength
– The extent to which revenues meet and/or exceed
expenses. This is our focus this year.
• Enrollment Strength
– The extent to which our enrollment meets the desired
results. Will begin work this year into next.
• Employer Strength
– The extent to which graduates become employed
and/or are accepted into graduate programs of their
choice. Will begin work this year into next.
2/25/2011
Funding Clarion Now & For The Future
24
First Thoughts: Revenue Generating
Possibilities
• Online programs
• 3 Year degree programs
• Accelerated Adult Degree
Programs
• Grow High Demand/ Low
Cost Programs
• Growth Investment Fund
• Out of state /
International Student
Recruitment
2/25/2011
• Increase retention
• Increase graduation
• Endowed Scholarships,
Professorships, Programs
• All New Efforts Must Be
Net Revenue Positive
• Grow Winter/Summer
Term Enrollments
• External Funding
• Graduate Programs
Funding Clarion Now & For The Future
25
BOG Recent Changes:
Tuition Policy Allows Greater Flexibility
• Nonresident
• Student Fees
Tuition
• Graduate
• Summer/Winter Tuition
Session Pricing
• Institutional
• Distance
Financial
Aid
Education OffCampus
2/25/2011
Funding Clarion Now & For The Future
26
First Thoughts: Cost Control Efforts
• Critically review our
approach to human
resources to ensure that
each person is doing their
highest best work for the
university
• Purchasing Consolidation
• IT Centralization
• Increase Program
Productivity
• Program Eliminations
2/25/2011
• Improve our processes
and programs
• Assess degree progress to
determine pedagogical
effectiveness
• Schedule courses more
efficiently to ensure
matriculation and
maximizing resources
• Identify and delete
outdated courses
Funding Clarion Now & For The Future
27
Made Up Examples
DEPARTMENT
CREDIT TOTAL APPR
HRS
GENERATED
TUITION REVENUE
GENERATED
INFRAS
REV
TOTAL
REVENUE
DEPART
COSTS
INFRAS
COSTS
TOTAL
COSTS
NET INCOME
(LOSS)
9646
1,223,697
2,115,365
129,352
3,468,416
(1,300,165)
(1,729,527)
(3,029,693)
438,723
ARCHITECTURE 11425
1,376,400
2,498,304
153,209
4,027,914
(2,601,664)
(2,048,502)
(4,650,167)
(622,252)
3942
2/25/2011
524,781
ENGINEERING
AGRICULTURE
877,478
52,862
1,455,122
(756,670)
Funding Clarion Now & For The Future
(706,800) (1,463,471)
(8,348)
Draft For Discussion:
CU Financial Planning Model
DEPARTMENT
ENGINEERING
Architecture
AGRICULTURE
2/25/2011
Fiscal Strength
438,723
(Net Rev Positive)
(622,252)
(Net Revenue Negative)
(8,348)
(Net Revenue Neutral)
Enrollment
Strength
Employer
Strength
Strong
Strong
Weak
Weak
Strong
Weak
Funding Clarion Now & For The Future
29
We all have a role…
• The Administration will need to:
– Reduce the bureaucracy
– Provide cost-efficient and value-added support
services for faculty, staff and students
• The Students will need to:
– Prepare themselves to work hard, keep focused,
work with faculty and staff and be determined to
graduate
2/25/2011
Funding Clarion Now & For The Future
30
We all have a role…
• The Faculty will need to:
– Contribute to the graduation of our students
– Reduce the time to degree completion
– Offer high impact educational experiences
– Articulate relevant and measureable learning
outcomes
– Offer more course options
– Streamline and align curricula and curricula
related requirements
2/25/2011
Funding Clarion Now & For The Future
31
We all have a role…
• Alumni
– Mentor students
– Assist students with job placement
– Fund scholarships
• Employers/Industry/Business
– Hire our students while at CU and upon graduation
– Provide advise regarding current & future credentials
– Fund scholarships & Fund program/faculty
endowments
2/25/2011
Funding Clarion Now & For The Future
32
We all have a role…
• The Community
– Express Golden Eagle Pride
– Continue the long tradition of “Clarion Cares”
about the CU students.
– Continue and expand campus and community
partnerships
2/25/2011
Funding Clarion Now & For The Future
33
Time Line
• Fall 2010
– Conduct a “Hitting The Ground Listening” effort
with a findings report on the web. Outcome:
Financial stewardship and the need for change
emerged as a major theme.
– Discussions/dialogue with the university
community regarding the benefits of
constructing a financial planning model and
using RCM as a financial framework.
– Begin to develop a new financial planning model
with Vice Presidents and Deans.
– Begin to apply parts of an emerging model to
future hiring decisions to determine the level of
“confidence” in making hiring commitments.
2/25/2011
Funding Clarion Now & For The Future
34
Time Line
• Spring 2011
– Continue development of a financial
planning model with Vice Presidents,
Deans, Departments Chairs and Directors.
– Engage in discussion and build a proposed
RCM and financial planning model
– Make Clear Our Financial Situation; Construct A CU
RCM approach and Financial Planning Model
2/25/2011
Funding Clarion Now & For The Future
35
Time Line
• Summer 2011
– Launch a first version of RCM and a financial
planning model that will help inform expenditure
and revenue decisions. This version will be piloted
and evaluated July 1, 2011 – June 30 2013.
• 2011 – 2012: Launch RCM & The Planning Model
holding every unit financially harmless
• 2012 – 2013: All units that do not meet the model’s
expectations will meet at least 50%
• 2013 – 2014: All units meet 100% of the model’s
expectations.
2/25/2011
Funding Clarion Now & For The Future
36
"Big Questions" To be Answered by May 1,
2011 which would go into effect July 1, 2011:
• Define a financial planning model which we
would pilot for 3 years?
– Define our approach to RCM?
– Define what is an RC?
– Select our CU specific performance funding
measurers.
• Within RCM how do we organize Extended
Programs, the Venango Campus, Honors College?
2/25/2011
Funding Clarion Now & For The Future
37
What Are Your Big Questions?
2/25/2011
Funding Clarion Now & For The Future
38
I heard It Through The Grapevine…..
• What if my class costs more than it makes?
• What if my department costs more than it
makes?
• The details of RCM has already been decided.
• The financial formula has already been
decided.
• ?
2/25/2011
Funding Clarion Now & For The Future
39
RCM
• Is a managerial framework for our internal budgeting and
financial reporting activities
• Used by many universities throughout the country since the
early 70s
• RCM was designed to control expense, but has proven to be
an even stronger driver of revenue
• RCM seeks to promote the broadest possible stewardship of
financial resources and to
– Enhance the capacity to generate revenue
– Encourage and reward innovation and efficiency
• Units (Colleges/Schools/Departments) benefit from
entrepreneurial activity: incentives are aligned to promote
stewardship and revenue generation
2/25/2011
Funding Clarion Now & For The Future
40
General RCM Principles
• Divide University into Responsibility Centers. There
are two basic types of Centers:
– Revenue-generating: Colleges, Schools, Resource Centers,
Business Services
– Non-revenue-generating: Administrative/Support Service
Centers
• Revenue-generating centers are expected to:
– fund the direct cost of their own operations
– cover their share of services (Infrastructure) provided by
the Administrative/Support Service Centers (via a formula
of allocated costs)
– maintain internal budget balance
2/25/2011
Funding Clarion Now & For The Future
41
Draft For Discussion: Fiscal Strength:
Defined
• TOTAL APPR GENERATED - Calculated by multiplying credit hours times
the appropriation per credit hour from the Allocation of FY10
Appropriation worksheet.
• TOTAL REVENUE GENERATED - Calculated by multiplying credit hours
times the revenue per credit hour from the FY10 Tuition & ISF Fee
Allocation worksheet.
• INFRASTRUCTURE REVENUE – Consists of all other revenue posted to the
E&G fund that is not appropriation or tuition & ISF fees. Examples would
include interest income, application fees, and late payment fees.
Calculated by multiplying credit hours times the infrastructure revenue
per credit hour from the FY10 Infrastructure Revenue Allocation
worksheet.
• TOTAL REVENUE - The sum of the appropriation, tuition revenue, and
infrastructure revenue columns.
2/25/2011
Funding Clarion Now & For The Future
42
Draft For Discussion: Fiscal Strength:
Defined
• DEPARTMENTAL COSTS – Consists of instruction related costs. Examples
would include faculty and department secretary salary/benefits,
department operating and capital costs. Taken from SAP, added Venango
Academic Program costs where necessary, subtracted certain noncontractual releases and all sabbaticals.
• EXT PROG COSTS - Administrative costs plus revenue share and Wednet
loss, allocated on a per credit basis to Extended Program courses.
• INFRASTRUCTURE COSTS - All E&G costs that are not departmental costs.
Would include any E&G expenditures for public service, academic support,
student services, institutional support, operations and maintenance of
plant, and student aid. Calculated by multiplying credit hours times the
infrastructure expense per credit hour from the FY10 Infrastructure Costs
worksheet.
• TOTAL COSTS - The sum of the departmental, extended program, and
infrastructure costs.
• NET INCOME (LOSS) - Total Revenue minus Total Costs
2/25/2011
Funding Clarion Now & For The Future
43