CFO explains budget, revenue

by Leeann Doerflein | News Editor
Published: Last Updated on

Just like students, faculty and staff, the University of  Indianapolis also must make a budget. The main difference, however, is the size of the budget and the number of people it affects.

According to Vice President and Chief Financial Officer Michael Holstein, UIndy’s budget is $84.8 million for the fiscal year ending on June 2014. He said that there is also another $2 million for capital expenditures.

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Graphic by Kyle Weidner, Stephanie Kirkling and Kyle Dunbar

 

Holstein provided a rounded breakdown of budget expenditures. Far and away the largest expenditure for the university is instructional expenses at 41 percent of the budget, according to Holstein. He said that instructional expenses are all of the expenses associated with instruction, such as salaries and benefits for faculty, deans and administrative assistants.

The second largest expense is institutional support at 16 percent, he said. This area, Holstein said, encompasses all of the things that make UIndy function as a business, including the expenses of the president’s office, the cabinet, marketing, fund raising, human resources, general counsel and many other areas.

A close third is student services, at 15 percent of the budget, Holstein said. He said that student services are all of the things that benefit students but are not connected directly to academics, such as the Offices of Admissions and Financial Aid, the Professional Edge Center, athletics and many other areas.

Nineteen percent of this fiscal year’s budget is reserved for various maintenance and debt repayments for building on campus. Operations and maintenance of plant is 10 percent of that expenditure.

Holstein said that these are expenses that are associated with maintenance, utilities, housekeeping and repayment of debt for buildings that are not residence halls, as well as the expenses of the Physical Plant.

According to Holstein, auxiliary services make up the other nine percent or maintenance and debt expenses. Holstein said that this category is for maintenance and debt repayment that is specific to the residence halls. He also said that these expenses are paid for by room and board charges.

The bottom 10 percent of the budget is made up of three categories: academic support, community services and the expenses associated with the Athens campus. The lion’s share of this goes to academic support, at eight percent of the budget, Holstein said. According to him, this category comprises student services that are not directly  involved with instruction, such as the library, student media outlets and the writing lab.

According to Holstein,  all of this is paid for with four sources of revenue: tuition, room and board, the endowment and “gifts, grants and miscellaneous income.” The largest share comes from students, creating 94 percent of the revenue for this fiscal year. Of that, 79 percent comes from tuition dollars, and the other 15 percent comes from room and board.

Four percent of this fiscal year’s revenue came from returns on investment from the endowment. And the last two percent came from the gifts, grants and other sources of revenue, Holstein said.

Some tuition dollars from students go to pay for student financial aid. Director of Financial Aid Linda Handy said that a percentage of every tuition dollar goes to merit and need based aid for students.

“It’s called a tuition discount,” Handy said. “You can assume that for every dollar you collect in tuition,  30 cents of it is going to be used for merit and need based aid.”

Holstein said that a number of things are taken into consideration when the budget is planned—the number of students enrolled, the cost of  room and board, utility expenses, cost of health care as well as the economic climate.

Holstein said that the administration looks at requests from the departments across campus for its primary source of budget planning. Vice President of  Communications and Marketing Mary Atteberry explained this process in detail.

“Everybody around campus filters those needs up,” she said. “… The administration looks at everyone’s needs from the different departments and everyone’s wish list. [Then] the president’s cabinet and a smaller budget committee determines what the priorities are for the following year.”

Atteberry said that the administration looks at not only the immediate needs, but also the grander ideas for budget concerns. She gave the example of the Vision 2030 ideas from students such as extending the hours at The Perk.

At the end of the day, Atteberry said, the budget is formulated to help students have a better experience at UIndy, both inside and outside the classroom.

“Our priority is always spending on those activities that will enhance the student experience and develop and grow academic programs,” Atteberry said. “Budget decisions are made based on those priorities.”

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