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March 2013 Archives

CLA Budget 1001--Part 5: Cost Pools

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by Brent Gustafson, Finance Director

The budget for the College of Liberal Arts comes primarily from two sources--tuition (75%) and state appropriations (19%), and the vast majority of expenditures are for two functions--salaries and benefits for employees (54%) and "cost pools" (35%). This column will examine cost pools in more detail, highlighting what these costs are for and the various categories of cost pools we pay. For the current fiscal year, CLA will pay $90.2 million in cost pool charges. (See the first column in this series for more background on sources and uses of the college budget.)

What are cost pools?

Cost pools are a way for the University to pay for functions that are essential for operating the institution, but are not specifically associated with individual colleges. The types of expenses covered by cost pools are likely found at any major research university or other large organizations. Cost pools are a necessary part of the University's overall budget model, because all of the revenue in the University is allocated out to collegiate units, and it is not retained for University-wide expenses. These cost pools are a mechanism to finance University expenses by distributing costs to colleges.

Over time, the University has modified its cost pool model, and currently, there are nine separate cost pools paid by CLA. Each is distinct in what costs it is designed to cover, as well as how those costs are distributed out to colleges. The reason for these different methodologies of distribution is to seek a relatively fair manner of assessing charges.

The Nine Cost Pools

Below is a listing and description of each of the cost pools charged to CLA and our cost for FY 2013. Also included is information about the manner in which the costs are distributed to colleges.

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Student Services ($34.9 million): this cost pool covers central offices and functions that support all students in the University, including admissions, student finance, and the Graduate School. The costs are distributed to colleges based on the numbers of students, so this is a large cost pool for CLA, and we pay the largest share of this cost pool given our size. There are actually four sub-categories of this cost pool in order to try to have different distribution methodologies for the component costs.

Technology ($16.0 million): many of the University's technology systems are managed centrally, so the costs of email, voice services, file storage, the Office of Information Technology, the help desk, and others are distributed out to colleges through this Technology cost pool. This cost distribution is on the basis of total number of students and employees.

Library ($13.1 million): the Library cost pool allocates the budget of the University Libraries out to colleges based on the number of faculty and students in the college.

Facilities Operations and Maintenance ($7.9 million): this charge covers the costs of building maintenance, waste management, custodial services, and grounds keeping. Costs are charged to colleges based on the amount of square feet that it occupies.

Support Service Units ($6.5 million): in order to fund the units of the University that have general support responsibilities, this cost pool charges out costs on the basis of total expenditures. Included in this category are things like the President's Office, University Relations, the Office of Human Resources, General Counsel, and the Office of Budget and Finance, among others.

General Purpose Classrooms ($3.9 million): as it sounds, this cost pool includes the functions associated with monitoring and maintaining classroom space on the Twin Cities campus, and it is allocated on the basis of total course registrations in a college.

Debt and Leases ($3.6 million): this pool includes the costs of centrally supported debt service and leases. Colleges are charged this cost if they occupy spaces for which the University is paying debt service. For CLA, Folwell Hall is an example of a debt-financed renovation for which we are charged costs in this pool.

Utilities ($3.6 million): while some utilities are charged through the Facilities Operations cost pool, most are included in this Utilities cost pool, including steam heat, electricity, and central air conditioning. Most utility charges are measurable by building, so over time, this charge has been more of a direct cost to units, rather than a proxy methodology that is present with most of the other cost pools.

Research Support Services ($0.6 million): the budgets for central units that administer, support, and monitor sponsored research activity are covered by this cost pool, such as the Office of the Vice President for Research (OVPR) and Sponsored Financial Reporting, among others. The costs are charged out to colleges based on a three-year rolling average of sponsored research expenditures.

Finally, it should be noted that the University's budget process has two distinct components that separate the units that are supported by cost pools and the collegiate units that pay the cost pools. The administrative (cost pool) units have an earlier (early winter) budget process to allow budget decisions to be made in time to reflect the impact on cost pools for the colleges. The colleges then know the impact of any cost pool changes when engaging with the University's budget process in the spring.

Accolades March 28, 2013

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Professor Wayne Potratz (art) has been awarded the prestigious International Sculpture Center's Outstanding Educator Award for 2013. Thirty-nine educators were nominated and the vote in favor of Wayne was unanimous, according to the ISC press release. A reception to celebrate this honor will be held at noon on Thursday, April 25 at the Regis Center's In-Flux Space.

Professor Regina Kunzel (gender, women and sexuality studies) has won an ACLS fellowship and the Stanford Humanities Center fellowship. The title of her project is In Treatment: Mental Illness, Health, and Modern Sexuality, which explores the encounter of sexual- and gender-variant people with psychiatry and psychoanalysis from the 1930s through the 1960s

Associate professor Brenda Child (history and American Indian studies) has joined the board of directors of the Smithsonian's National Museum of the American Indian.

Associate professor Mary Franklin-Brown (French & Italian) has won the 2103 Harry Levin Prize, awarded by the American Comparative Literature Association, for her book Reading the World: Encyclopedic Writing in the Scholastic Age (University of Chicago). The 2013 Levin prize distinguishes the best first book in comparative literature published in 2010-2012. The prize committee praised the book for being impressively textured and detailed in its historical scholarship, and at the same time for posing urgent questions that have resonated across the centuries into our own internet era.

Associate professors Karen Ho (anthropology) and Kevin Murphy (history) have won the Award for Outstanding Contributions to Postbaccalaureate, Graduate and Professional Education for 2012-13.

Professor David Baldwin (music) is a member of the Summit Hill Brass Quintet, which is one of four artists selected to be Classical MPR's Artists-in-Residence. The groups perform, teach, and speak about music during visits to schools throughout the state of Minnesota. Listen to the quintet perform Divertimento, K. 136, Allegro by W.A. Mozart.

MFA candidate Kate Petersen (creative writing) has received the prestigious Wallace Stegner Fellowship in fiction. The two-year Stegner Fellowship at Stanford University is one of the nation's most prestigious creative writing fellowships, with about 1,700 applicants last year. Ten fellowships are awarded each year, five in fiction and five in poetry.

MFA candidate Adriane Quinlan (creative writing) is the first University of Minnesota student to win a prestigious Overseas Press Club Foundation Award. The $3,000 grant she received will fund an internship in the Beijing bureau of The Associated Press this summer. In her winning essay, Adriane wrote about theme parks in China, specifically, her own Beijing rite of passage: a trip to World Park.

Graduate student Jennifer Fillo (psychology) has won the 2012-13 APS Albert Bandura Graduate Research Award from Psi Chi.

Graduate student Emily Springer (sociology) was awarded a Thomas F. Wallace Fellowship for the 2013-14 academic year. This award is given to social sciences graduate students in their intermediate PhD years, to salute academic excellence.

CLA Budget 1001--Part 4: What We Control, What We Don't

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The budget for the College of Liberal Arts is financed primarily by tuition (75%) and state appropriations (19%). These resources are then spent on CLA operations, primarily on salaries and fringe for faculty, staff, and graduate assistants (54%), as well as overhead and shared costs to the University (35%, known as "cost pools"). (See earlier columns of this CLA Budget 1001 series for more background.)

The revenues and expenses of the college are influenced by a variety of factors, and this piece is intended to briefly highlight that some of the factors are within CLA's control, while others are largely outside of our control.

What are the drivers?

At a very basic level, the two most significant drivers of tuition revenue to the college are the number of students paying tuition and the rate of tuition charged. As for the rate of tuition charged, this is a decision made by the Board of Regents, not CLA. The number of students in CLA also is subject to a lot of influences, among them:

• the number of new high school students admitted,
• the number of transfer students admitted,
• the number of students who transfer into or out of CLA from other parts of the University, and
• the rate at which students complete their degree programs and graduate.

The overall number of students in CLA has declined in recent years, with one result being a decline in the amount of tuition revenue.

The number of undergraduate students admitted to CLA is a decision made in the Provost's Office, and this decision is influenced by goals the University has for the size of the student body as well as the academic characteristics of the students admitted.

One other factor that can significantly influence the tuition revenue from undergraduate students is the individual course-taking behavior of each of roughly 14,000 undergraduate students enrolled here. The University's financial structure shares the tuition revenue between the college that enrolls the student and the college that provides the course instruction to that student. (See part 2 in this series for more on the University's 75/25 split.) In recent years, the share of credits that CLA students take within the college has declined (see graph below). This is the result of thousands of individual decisions by students.

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Finally, the allocation of state appropriations among colleges within the University is the result of the annual budget and planning process of the University. (See part 3 in this series for more on state appropriations.) CLA participates in this annual budget process, but decisions about allocating state resources are made by the University's administration. The University's budget process considers the combined amounts of tuition and state appropriations when making resource allocations to individual colleges.

Within CLA's Control

While much of the revenue side of CLA's budget is subjected to external influences and not internally controlled, the college has more discretion on the spending side of our budget.

Over half of CLA's budget goes toward paying for salaries and fringe benefits for employees. This is not surprising, given the nature of any educational institution. Because this is our largest expense, it is also the area of most spending discretion. CLA makes its own choices about the number of faculty, the number of teaching assistants, and the level of staffing for administrative functions. The compensation levels for any given position is only partly within our control, as there are external influences as well, primarily market considerations, collective bargaining agreements, and University policies.

In contrast to undergraduate admissions, the number of graduate and professional students admitted is a decision made within CLA. The reduction in the number of graduate and professional students over the past few years (see table above) reflects both a drop in the number of new students matriculating each year and efforts to ensure students compete their degrees in a timely manner.

Effective management of the college's curriculum is a primary way in which CLA can both help control its costs and influence its revenue. CLA departments seek to offer courses that meet our mission as a liberal arts college and are part of a coherent academic program. Additionally, departments try to ensure that the number of courses offered--as well as the timing--help students meet degree requirements in a timely manner. Ideally, the curriculum within each department is attractive to students and enrolls well, in order to make good use of faculty instructional time as well as teaching assistants. Appealing to student interests and enrollment trends in turn helps the college's tuition revenue by drawing students into CLA classes, both from within CLA and also from other colleges.

CLA, like other colleges at the University, also has discretion over its use of "indirect cost recovery" (ICR) revenue that accompanies the receipt of many external grants. (A future column will examine grants and ICR revenue.) Additionally, CLA, in consultation with academic departments, sets its own priorities for fundraising from private donors and can partner with donors to direct these resources to collegiate priorities like scholarships and fellowships. Both ICR and donated funds, however, are much smaller sources of revenue than either tuition or state appropriations.

Accolades March 7, 2013

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Professor Andrew Elfenbein (English) received an American Council of Learned Societies Fellowship for 2013-14.

Professor Rob Warren (sociology) is the new editor of Sociology of Education, an American Sociological Association journal, published by Sage Publications. It will be housed in the sociology department for three years starting this summer.

The 2013 IDEA Multicultural Research Award recipients are:
Assistant Professor Clint Carroll (American Indian studies): Sovereign Landscapes: Political Ecology, Environmental Governance, and the Resurgence of an Indigenous Land Ethic in the Cherokee Nation
Assistant Professor David Karjanen (American studies): African American and Latino Community-Labor Coalitions: Analyzing Effectiveness in Three American Cities
Assistant Professor Angelica Lawson (American Indian studies): Indigenous Resistance and Resilience
Associate Professor Lynn Lukkas (art): Covered in Time and History: The Films of Ana Mendieta
Associate Professor Moin Syed (psychology): Women and Ethnic Minorities in STEM: An Intersectional Analysis of STEM Participation and Persistence

Professors M. J. Maynes and Ann Waltner (both history) are the recipients of an International Research Fellowship, affiliated with the International Research Center for "Work and Human Life Cycle in Global History" at the Humboldt-University Berlin. They will be in residence in Berlin in March and April.

Associate Professor Jan Estep (art) published the article "Semblance of Fact: How brain scans are presented and consumed as photographs" in Triple Canopy. She writes about fMRI and their photographic likeness and the use of brain scans in the court system. Part of the research comes from a collaboration between Jan and cognitive neuroscientists on campus, and her experience in the Tesla scanners on campus.

Associate professors Francis Harvey and Steve Manson (geography, environment and society) and coordinator Len Kne (U-Spatial) co-authored the cover story of the winter 2012-13 issue of ArcNews, published by Esri. The article describes the U-Spatial collaborative at the University, which supports spatial science and creative activities across the University campus.