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Fiscal Year 2004 Budget: Report
to University Council
The
annual presentation of the FY 2004 budget (July 1, 2003
through June 30, 2004) was made at the March 24 Council
meeting. President Judith Rodin gave some preliminary
remarks. Then, Bonnie
Gibson, acting director of the Office of Budget & Management
Analysis, gave an overview of the Consolidated Budget
and noted that
the Academic component (schools, resource centers,
auxiliaries, and central service centers) has been
growing more quickly
than the Health System component (Penn Medicine: HUP,
Presbyterian, Pennsylvania Hospital, Phoenixville Hospital,
CPUP, and Clinical Care Associates), (see table below).
She
then focused primarily on the academic portion of the
budget. Her presentation included expenditure and revenue
perspectives (see pies) as well as a look at the
indirect cost recovery rate (see below) and Penn's endowment
as compared to peer institutions' endowment per student
(see below). In 2002, Penn was ranked 67, and in
2003 it is ranked 66 in the NACUBO Study. The following
text, charts and pies are from her slide presentation.
Vice
Provost for Strategic Initiatives Leslie Hudson then
explained the role of his office which is relatively
new to Penn. He said that the goal is to ńdrive revenueî with
a purpose to the University's core mission. Next week's
issue will include highlights from his presentation,
along with coverage of the remainder of the Council meeting.
FY 2004 Consolidated Expenditures
Budget
Growth in
Penn's Revenue Sources
Is Constrained
-
NIH
has completed the planned doubling of funding. After
years of double digit increases, our growth in sponsored
research awards is slowing
down.
-
The
federal F&A
rate (grant overhead) is likely to decline in the coming
years, limiting the
growth in Indirect Cost Recovery (ICR).
--Rate has fallen from 65% in FY 1992 to 58.5% in the current
fiscal year
--The rate for FY 2005 is still being negotiated and may
be reduced
-
For
FY 2005, the Governor is recommending a 1.7% increase
over FY 2004 Commonwealth Appropriation. This
would still be below the FY 2003 amount.
-
Penn's
spending rule provides for a 2.2% decrease in spendable
investment income for FY 2005, following
a 5.0% decrease in FY 2004.
-
Most
University business services either break even or generate
narrow margins in sales and service
income after meeting all operational and programmatic
requirements.
Budgeting to Support 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.
-
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 whenever possible towards investments
in the Schools that support their most important goals
and priorities.
FY 2004 Academic Budget Sponsored Program Indirect
Cost Recovery
|
FY 2002 Actual
|
FY 2003 Actual
|
FY 2004 Budget
|
FY 2004 Projected
|
Income ($000)
|
143,815
|
161,586
|
170,001
|
174,545
|
Annual % Change
|
14.2%
|
12.4%
|
5.4%
|
8.0%
|
Federal ICR Rate
|
58.5%
|
58.5%
|
58.5%
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58.5%
|
-
Total direct and indirect Sponsored
Program revenue represents approximately 36% of the
FY 2004 Academic Revenue Budget
-
The School of Medicine accounts for
about 68% of Sponsored Program dollars awarded to the University
-
According
to an analysis prepared by the Office of the Provost,
Penn's total ICR is nearly
$40 million less than the actual overhead required
to support our annual research effort
FY
2004 Academic Budget Total Revenue by Source
Total
= $2.009 Billion
Commonwealth
Non-Preferred Appropriation
($000)
Annual
Growth in Spendable Endowment Income Under the Spending
Rule (Excluding Earnings on New Gifts to Endowment)
FY
2004 Academic Budget Expenditures by Expense Type
FY
2004 Academic Budget Expenditures by Responsibility Center
Category
Total
= $2.009 Billion
FY
2004 Academic Budget Expenditures by School
Total
= $1.427 Billion
Peer
Institution Endowment/Student
Rank
|
Institution
|
Assets ($B)
|
($/Student)
|
2 |
Princeton |
8.73 |
1,306,706 |
4
|
Harvard
|
18.85
|
996,431
|
5
|
Yale
|
11.03
|
988,941
|
15
|
Stanford
|
8.61
|
600,739
|
19
|
M.I.T.
|
5.13
|
511,418
|
24
|
Dartmouth
|
2.12
|
391,074
|
29
|
Washington U.
|
3.45
|
317,849
|
36
|
Chicago
|
3.22
|
262,364
|
52
|
Columbia
|
4.35
|
217,196
|
53
|
Northwestern
|
3.05
|
216,933
|
62
|
Brown
|
3.02
|
190,674
|
66
|
Penn
|
3.55
|
177,391
|
78
|
Cornell
|
2.85
|
145,838
|
Note: Source is the FY 2003 NACUBO Endowment Study
FY 2004 Financial
Aid Budget
|
FY 2003 Actual
|
FY 2004 Budget
|
FY 2004 Projection
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% Change 04P v 03A
|
Undergraduate Student Aid
|
$ 78.2M
|
$ 83.1M
|
$ 83.9M
|
7.3%
|
Penn Aid
|
66.2
|
71.1
|
71.8
|
8.5%
|
Outside Aid
|
12.0
|
12.0
|
12.1
|
1.0%
|
FY 2004 Financial
Aid Budget
|
FY 2003 Actual
|
FY 2004 Budget
|
FY 2004 Projection
|
% Change 04P v 03A
|
Undergraduate Student Aid
|
$ 78.2M
|
$ 83.1M
|
$83.9M
|
7.3%
|
Penn Aid
|
66.2
|
71.1
|
71.8
|
.5%
|
Outside Aid
|
12.0
|
12.0
|
12.1
|
1.0%
|
Grad. & Prof. Student Aid
|
$ 98.0M
|
$107.2M
|
$107.9M
|
10.1%
|
Penn Aid
|
74.6
|
80.8
|
82.0
|
9.9%
|
Outside Aid
|
23.4
|
26.4
|
25.9
|
10.7%
|
Total Student Aid
|
$176.2M
|
$191.3M
|
$191.8M
|
8.9%
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Summary
Almanac, Vol. 50, No.
27,
March 30, 2004
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