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Budget Update October 6, 2011

Budget Update October 6, 2011. FY 2012. Presented at Town Hall Meeting 10/22/10. FY 2012. FY 2012 Steps taken when the FY2012 Spending Plan was developed: Reduced full-time positions from 1,023 to 998 Continued to achieve operational savings from our ongoing cost containment program

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Budget Update October 6, 2011

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  1. Budget UpdateOctober 6, 2011

  2. FY 2012 Presented at Town Hall Meeting 10/22/10

  3. FY 2012

  4. FY 2012 • Steps taken when the FY2012 Spending Plan was developed: • Reduced full-time positions from 1,023 to 998 • Continued to achieve operational savings from our ongoing cost • containment program • No funding set aside for strategic initiatives • Tuition and fees were increased by 2.5 percent

  5. FY2012 • Despite these actions, the university was still left with a significant budget deficit due to an extra payroll and the growth of non-general fund expenses.  The following actions were taken to close the gap for FY2012: • The University received board approval to use almost $4 million of reserves to cover the general fund portion of the 27th payroll for FY 2012 • As part of the FY2012 budget preparation, each vice president provided budget reduction outlines for their respective areas. To close the remaining gap, divisional budgets were reduced by $4.7 million. This included holding positions vacant, including temporary one-year faculty appointments, custodial and clerical staff, and administrators • A change in board policy that reduced university CHEFA debt obligations by 20 percent. Several refinance opportunities, along with lower interest rates, saved $1.85 million

  6. FY 2012 Once the concession agreement was finalized, Southern was notified on August 25, 2011 that the State appropriation would be reduced by an additional $4,198,835. The concession agreement reduced Southern salary and fringe expense by $2,880,227, leaving a budget gap of $1,318,608. To close the gap, management positions will be held vacant until March 1, 2012 or longer. Additional reductions were required in non-divisional OE. (*) Note: The 8/25/11 reduction to the Gen’l Fund & FB paid-by-State appropriation is offset by the following expense savings (resulting from employee concessions): Elimination of BU increases $1,831,808 Reduction in Longevity 208,999 Related Fringe Benefit Reduction 839,420 $2,880,227

  7. FY 2012 On September 7, 2011, The University received a third notification that the State appropriation would be further reduced by $1,257,490. To close this gap, it will require holding 16 administrative positions vacant until January 1, 2012 and 1 position for the entire year. Additional reductions were also required in non-divisional OE.

  8. FY 2012 * • NOTE: Net Reduction is 15.9% of the Original FY 2012 Spending Plan State Appropriation • 12,642,151 / 79,471,740 = 15.9%

  9. FY 2012 NOTE: This Trend is Nationwide

  10. FY 2012 The FY2012 Spending Plan was built on an assumption of a 2% enrollment increase. We wanted to “grow” our way out of the effect of our budget reductions.

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  15. FY2012 • Current Strategies • Meeting to develop strategies to increase enrollment: • USPaRC • University Budget & Planning • Enrollment Management Council • Continue to hold positions vacant/hiring freeze • Reduce departmental budgets (OE, Student Labor & UA)

  16. FY2012 • In conclusion: • The current path that Southern is following – • Diminishing state appropriations • Shrinking student enrollments • will not sustain Southern as the University we know today

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