Budget 2000-2001: President Rodin's
Report to the University Council
President Rodin's report to Council on March 28 included the University's
financial planning approach and the components of the University budget.
The pie charts show the academic budget revenue by source as well as the
Additionally, the charts highlight the challenges the University
faces as well as goals to be achieved in light of fiscal constraints.
The tables, pies, graphs and text are from the slide presentation.
Components of the Consolidated University Budget
- The Consolidated University budget has two major
components--"Academic" and "Health Services"
- The Academic budget includes:
- --Schools (including the School of Medicine)
- --Resource Centers
- --Central Service Centers
- The Health Services budget includes all components of UPHS except for
the School of Medicine:
- --Hospital of the University of Pennsylvania (HUP)
- --Presbyterian Medical Center (PMC)
- --Pennsylvania Hospital
- --Phoenixville Hospital
- --Clinical Practices of the University of Pennsylvania (CPUP)
- --Clinical Care Associates (CCA)
Penn's Financial Planning Approach
- The University engages in strategic long-term financial planning.
- New programs, priorities and initiatives are discussed and planned
long before they are included in the annual University operating budget.
- Consultation occurs through the Academic Planning & Budget Committee
and in other forums.
- New initiatives that will be implemented and budgeted in Penn's Fiscal
Year 2002 budget have been identified and publicized already--during the
current year or prior years.
How the University's Budget Supports Goals and Priorities
- Provost and Deans work together to develop School budgets that maximize
level of resources available for investment in strategic goals and priorities.
- Executive Vice President and Vice Presidents work together to develop
Central Service Center budgets that maximize level of resources available
for investment in strategic goals and priorities.
- Limited central resources--e.g., Subvention, Research Facilities funding,
Facilities Renewal Program funding--are directed wherever possible towards
investments in the Schools that support their most important goals and
Growth in Other Revenue Sources Will Be Constrained
- The federal ICR (grant overhead) rate is likely to decline in the coming
years, limiting the growth in grant ICR income.
- --Rate has fallen from 65% in FY 1991 to 58.5% in the current fiscal
- --Budget planning parameters assume a further drop to 56% in FY 2002.
- The Governor is proposing only a 1.9% increase in the University's
Commonwealth Appropriation for next year.
- Penn's spending rule provides for only a 3.1% increase in spendable
investment income for FY 2002, in contrast to double-digit growth in each
of the past three years.
- Most University business services either break even or generate narrow
margins in sales and service income after meeting all operational and programmatic
FY 2001 Academic Budget Sponsored Program Indirect Cost Recovery
|| FY 2000 Actual
|| FY 2001 Budget
|| FY 2001 Projected
|| % Change vs. 2000|
| Income ($000)
| ICR Rate
- Direct Sponsored Program expenditures are projected to increase by
10.9% in FY 2001.
- Total direct and indirect Sponsored Program revenue represents approximately
33% of the FY 2001 Academic Revenue Budget.
- The School of Medicine accounts for about 65% of Sponsored Program
dollars awarded to the University.
Peer Institution Endowment/Student
Among Top 20 Endowments as of June 30,
|Chicago, University of
|* Based on FTE students as of Fall 1999|
Penn's Undergraduate Financial Aid Policy
- Undergraduate financial aid is based on level of financial need:
- student expense budget (tuition, fees, living expenses) - family contribution
= financial need
- Aid package components to meet financial need:
- --Self-help (student loan, work-study)
- --Grant (external, University)
- Penn grant is awarded to the extent financial need exceeds required
self-help plus third-party grants.
- Penn instituted a variety of exclusions and adjustments to the "family
contribution" to make Penn more affordable to middle income families
years before other peer institutions who adopted similar measures just
two to three years ago.
FY 2001 Financial Aid Budget General Operating, Gift, and
Investment Income Funds ($000)
||FY 2001 Budget
|Undergraduate Student Aid
|Graduate Student Aid
|Total Student Aid
- Fundraising for financial aid endowment remains a top priority.
- Undergraduate need-blind policy is a competitive necessity.
- Penn remains significantly under-endowed relative to peers.
Note: Figures exclude Sponsored Program Funds.
Illustrative Needs for Academic Investment
Penn has a vital need to maintain and enhance its reputation and rankings
||5-Year Investment Required |
- Faculty recruitment and retention
|$25 Million |
||$90 Million |
- Undergraduate quality of life--recreation, housing and dining
|$350-400 Million |
- Continued investments in information technology
|$50-100 Million |
Challenges We Face
- Extensive needs for strategic academic investments
- Enhanced generation of endowment revenue
- Fiscal stability in the Health System
How Penn is Achieving its Goals in Light of Serious Fiscal Constraints
- --Both in Central Service Centers and in administration of Schools
- --Ambitious, successful, focused fundraising in support of goals and
- University/Private Sector Partnerships
- --Getting others to spend their money to do things Penn needs so that
our own resources can be spent on core academic priorities
Note: The Budget presentation aslo included information
concerning tuition increase. This information was provided in the March 27 issue
The University's fical year begins July 1. The budget for FY 2002
will be reviewed and approved by the Trustees at their Stated Meeting in
Almanac, Vol. 47, No. 28, April 3, 2001
| FRONT PAGE
| 2001 SCUE WHITE PAPER | COUNCIL:
University Budget 2000-2001 | CHARLES
ADDAMS HALL | TALK
ABOUT TEACHING ARCHIVE | BETWEEN
ISSUES | APRIL at PENN