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7-45 Comprehensive Budgeting for a University Suppose you are the controller of Nebraska State University. The university president, Lisa Larsson, is preparing for her annual fund-raising campaign for 20X7-20X8. To set an appropriate target, she has asked you to prepare a budget for the academic year. You have collected the following data for the current year (20X6-20X7): Undergraduate Division Graduate Division $58,000 $58,000 24 18 Average salary of faculty member Average faculty teaching load in semester credit-hours per year (eight undergraduate or six graduate courses) Average number of students per class Total enrollment (full-time and part-time students) Average number of semester credit-hours carried each year per student Full-time load, semester hours per year 30 3.600 25 30 20 1,800 20 24 For 20X7-20X8, all faculty and staff will receive a 6% salary increase. Undergraduate enrollment spected to decline by 29, but graduate enrollment is expected to increase by 5%. The 20X6-20X7 budget for operation and maintenance of facilities was $500,000, which includes $240,000 for salaries and wages. Experience so far this year indicates that the budget is accurate. Salaries and wages will increase by 6% and other operating costs will increase by The 20X6-20X7 and 20X7-20X8 budgets for the remaining expenditures are as follows: CHAPTER 7. INTRODUCTION TO BUDGETS AND PREPARING THE MASTER BUDGE $12.000 in 20X7-20x8 20X6-20X7 $500.000 20X7-20x8 $525.000 General administrative Library Acquisitions Operations Health services Intramural athletics Intercollegiate athletics Insurance and retirement Interest 150.000 190.000 48.000 56,000 240.000 520,000 75,000 155,000 200,000 50,000 60,000 245,000 560,000 75,000 Tuition is $92 per credit hour. In addition, the state legislature provides $780 per full-time- equivalent student. (A full-time equivalent is 30 undergraduate hours or 24 graduate hours.) Full-tuition scholarships are given to 30 full-time undergraduates and 50 full-time graduate students. Revenues other than tuition and the legislative apportionment are as follows: Endowment income Net income from auxiliary services Intercollegiate athletic receipts 20X6-20X7 $200,000 325,000 290,000 20X7-20X8 $210.000 335.000 300,000 The chemistry/physics classroom building needs remodeling during the 20x720x8 period. Projected cost is $575,000 1. Prepare a schedule for 20X7-20X8 that shows, by division, (a) expected enrollment, (b) total credit hours, (c) full-time-equivalent enrollment, and (d) number of faculty members needed. 2. Calculate the budget for faculty salaries for 20x7-20X8 by division. 3. Calculate the budget for tuition revenue and legislative apportionment for 20x7-20X8 by Prepare a schedule for President Larsson showing the amount that must be raised by the annual division. fund-raising campaign. E E G G H H F F Nebraska State University Undergraduates $ 58,000 Graduates 58,000 $ 24 30 3,600 18 20 1,800 25 30 92 20 24 $ $ 92 3 A D B D 5 Data for 20X6-20X7 6 7 Average salary of faculty member 8 Average faculty teaching load in semester credit hours per year (eight undergraduate 10 or six graduate courses) 11 Average mumber of students per class 12 Total enrollment (full-time and part-time students) 13 Average mmber of semester credit hours carried 14 each year per student 15 Full-time load, semester hours per year 16 Tuition per credit hour (no other fees required) 17 Data for 20X7-20X8 and additional information: 18 Enrollment increase (decrease) 19 Faculty salary increase 0 20 Full-time scholarships -1 21 Expenses: 22 22 Budget for operations & maintenance 23 23 Budget for remaining expenses 24 Budgeted operating expenses 25 25 Revenues: 26 26 Endowment income 27 27 Net income from auxiliary service 28 28 Intercollegiate athletic receipts 29 29 Other 30 Classroom remodeling 31 31 Required 32 32 a. Projected enrollment 33 33 b. Projected student credit hours 34 Less scholarship credit hours 35 35 Tuition paving credit hours 36 c. Full-time equivalent enrollment 37 Projected credit how's taught per faculty member 38 d. Projected number of full-time faculty -2.00% 6.00% 30 5.00% 6.00% 50 20X7-20X8 526,400 1,870,000 2,396,400 S 24 210,000 335.000 300,000 30 575,000 Graduates Formula 13 Formula 14 Formula 15 Formula 16 Formula 17 Formula 18 Formula 19 Undergraduates Formula 1 Formula 2 Formula 3 Formula 4 Formula 5 Formula 6 Formula 7 34 36 37 38 300,000 575,000 Graduates Formula 13 Formula 14 Formula 15 Formula 16 Formula 17 Formula 18 Formula 19 Formula 20 Formula 21 Formula 22 28 Intercollegiate athletic receipts 29 Other: 30 Classroom remodeling 31 Required Undergraduates 32 a. Projected enrollment Formula 1 33 b. Projected student credit hours Formula 2 34 Less scholarship credit hours Formula 3 35 Tuition paying credit hours Formula 4 36 c. Full-time equivalent enrollment Formula 5 37 Projected credit hours taught per faculty member Formula 6 38 d Projected mumber of full-time faculty Formula 7 39 e. Projected salaries and benefits for full-time 40 faculty Formula 8 41 f. Projected tuition revenue Formula 9 42 Legislative apportionment: 43 Full-time equivalent students Formula 10 44 Legislative apportionment per full-time 45 equivalent student Formula 11 46 g. Total legislative apportionment Formula 12 47 48 Nebraska State University 49 Expenses: 50 Faculty salaries Budgeted operating expenses 52 Total budgeted operating expenses 53 Revenues: 54 Tuition 55 Legislative apportionment 56 Endowment income 57 Net income from auxiliary services 58 Intercollegiate athletic receipts 59 Total budgeted operating revenues 60 Deficit from operations 61 Budgeted capital expenditures 62 Total cash needed from fund-raising Formula 23 Formula 24 20X7-20X8 Formula 25 Formula 26 5 5 Formula 27 Formula 28 Formula 29 Formula 30 Formula 31 S Formula 32 Formula 33 3 9 1