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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.

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