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STANDARD
9 - FINANCIAL RESOURCES
Page
3 of 4
The Financial Records System (FRS) accounting system that
is used by UMass Dartmouth (and the University system) has
a budget component that ensures that financial commitments
cannot exceed budgeted amounts. For the most part, the budget
process during the past few years has been flat or minimally
incremental for the majority of program areas. As mentioned
earlier, it has been largely a mechanical process. Additional
allocations have been made for special initiatives and mission-related
program modifications and or additions. These programs include
the Center for Marine Science and Technology, the Center for
Teaching and Learning, the accreditation of the College of
Business and Industry, the development of a PhD program in
Electrical Engineering, the Portuguese Center and others.
In many cases, the funding for these programs was incremental
from the University and either included in the State Appropriation
or funded by Trustee Reserves. In other cases, the funding
came from increases in other Unrestricted Revenues or the
reallocation of existing resources.
The spending down of the Unrestricted Fund Balances and the
use of campus reserves were both caused by the funding of
activities linked to the campus mission and purposes. The
campus was in a mandate situation in terms of its programming
components and the physical infrastructure of the campus reflected
years of neglect and wear and tear. Operating deficits created
by the need to fund these activities were considered necessary
and unavoidable.
A review of the new budget process will demonstrate that
this new process is intended to assist the institution in
controlling its financial resources and allocating them within
its mission and purposes. The "bottom-up" philosophy behind
the new process allows ideas to percolate to upper management
for consideration and possible implementation. The philosophy
allows for all voices to be heard and it is expected that
this will generate an overall sense of ownership in the budget
process and in campus budget activities. The process allows
for input to allocation decision-making based upon institutional
strategic initiatives. It attempts to look at the campus holistically
and break down barriers to service between functional areas.
Interim Chancellor, Jean MacCormack, has publically informed
the campus that she will support the newly-approved budget
process. This was viewed by the campus as an important statement
in the context of institutional stability in resource management.
During FY98, an Academic Budget Process Workgroup was assembled
to develop a new budget process for UMD. The new budget process
encourages open discussion and disclosure of budgets and unit
requests, coordination with strategic planning and priorities,
and responsible decision-making and accountability at the
lowest possible level.
The process consists of two cycles. The first cycle begins
with the development of sustaining budget needs for ongoing
programs and the projection of revenues for the upcoming year.
The second cycle works with institutional priorities based
on campus initiatives. This funding cycle is dependent upon
budget availability after funding of the sustaining budget.
Multiple time goals are built into the process with opportunities
for open discussions of campus sustaining budget needs and
initiative budget needs. FY01 is to be the first year for
implementation of this new budget process.
The new campus budget model will feed into the system budget
model that begins in the late fall with the setting of tuition,
mandatory and non-mandatory fees, auxiliary services charges,
and revenue-based operation projections for the new fiscal
year. This process takes place on the campus through a series
of meetings, conversations and discussions surrounding any
changes. Guidelines come from the President's Office. This
process includes the casting of revenues and expenses for
these fees and charges for the new fiscal year. This information
is prepared and forwarded to the President's Office for approval
by the Trustees. The coordination of the campus budget activity
with the system budget activity is an important step for the
campus. These two activities have historically operated independently
of each other and have displayed very different pictures of
campus budget activity.
During the late summer, a complete Operating Budget is prepared
for the system. This report takes information prepared earlier
for the fee, auxiliary services charges and revenue based
operations and adds to it the expected funding from the State
Appropriation. Also included in the Operating Budget is information
about employee FTE and student headcount and FTE. An analysis
of actual cash results is compared to the prior year budget
with a narrative variance explanation.
During the campus's transition from a comprehensive, regional
university to a full partnership with the University of Massachusetts,
budget activity was, for the most part, incremental for ongoing
activities and programs and reactive for initiatives and strategies.
The newly designed budget process addresses this issue. Its
full implementation will assist in ensuring the integrity
of campus finances and will contribute to prudent financial
management and organization.
On a monthly basis, a financial report that compares
the spending budget to the actual budget is prepared by the
Budget Office and forwarded to the Vice Chancellor for Administration
and Finance for review. This report displays variances between
actual spending and the budget and discusses reasons for the
variances. Based upon the information in this report, modifications
may be made to the budget on an ongoing basis. Also prepared
is a monthly State Appropriation payroll projection. On a
quarterly basis, the Controller's Office prepares a budget
to actual report for the President's Office. This report compares
the published Operating Budget to the actual activity from
FRS.
A variety of management reports are generated
by FRS on a weekly, monthly and yearly basis. These reports
are used by staff in Administrative and Fiscal Services to
monitor and control financial activity. The FRS system allows
all authorized users to view and monitor the activity in their
accounts on-line.
The campus has made major strides in upgrading
the professionalism and technical expertise of its financial
staff and management. Policies, procedures, and activities
related to cash investment and disbursement management have
been put into place. Financial reporting has moved from "ad
hoc" and/or annual reporting to monthly and other periodic
analyses that include actual information and projected information.
These reports are forwarded to upper management as an aid
to decision making.
The Human Resources Department is committed to
the incremental training of existing staff as redesign efforts
change the way the campus does business. The implementation
of the new PeopleSoft package is expected to increase the
campus's reporting capabilities and allow users flexibility
within the system to achieve their specific and individual
reporting needs.
Fund-raising activities for the University are managed through
the University's Foundation. The Dartmouth campus has its
own Foundation involved on an ongoing basis in maximizing
external support for a variety of targeted campus activities
and initiatives.
In January 1999, the UMass Dartmouth Foundation launched
the "quiet phase" of its 20 by 2000/Over the Top campaign.
This campaign builds upon the success of the Centennial Campaign
that was launched in 1995. The original goal of the Centennial
Campaign was to raise $10 million in five years or by the
year 2000. The university surpassed that goal in 1997. The
ever-increasing pressure to find other sources of funding
caused the former Chancellor, the UMD Foundation Board and
its staff, lead by the UMass Dartmouth Foundation Director,
to extend and expand the very successful Centennial Campaign
to a total of $20 million to be raised by the year 2000. In
1998-99, UMass Dartmouth launched its annual campaign with
over $15 million raised. To put this campaign "Over the Top",
a goal was set to raise an additional $5.5 million by June
30, 1999. The Foundation succeeded in meeting its goal, raising
a total of $5,525,079 in FY99. With continued pressure from
the Board of Trustees to expand its fund-raising efforts,
UMass Dartmouth has set an aggressive goal of $6.5 million
for FY2000, representing a 20% increase over the previous
year.
Gifts are solicited by the university for a variety
of purposes for both current use and capital purposes, including
gifts for equipment, buildings and permanent endowments that
create funds for future use. Throughout each annual campaign
prospective donors are offered the opportunity to earmark
their donations to special initiatives, any of the special
projects or programs on campus, any of the colleges, or to
leave their donation undesignated.
For the
purpose of focusing its appeals, the UMass Dartmouth Foundation
has segmented its primary constituents into three major groups:
Alumni and Parents, Friends of the University (which includes
many major donors), and area businesses and corporations.
Much of the fund-raising effort is targeted toward alumni
and takes the form of either direct mail or phon-a-thon appeals.
Friends of the University and top donors and prospects are
often contacted personally and are offered the opportunity
to direct their major gifts to a specific initiative or area
of the university. In January 1999, the university unveiled
its plans for a new Corporate Partners Program. The Corporate
Partners Program has been developed to strengthen the relationship
between the university and businesses, both large and small,
to serve those corporations well by providing an educated
workforce, maximum access to university resources and a mutually
beneficial partnership. The Corporate Partners Program builds
on existing relationships and offers tangible benefits to
the businesses which partner with and invest in UMD.
In
the past five years, fund-raising by the UMD Foundation has
increased from $400,000 annually to $5,525,079 in FY99. Of
the $5, 525,079 raised in the 1999 Annual Campaign, the Foundation
raised a total of $5,113,455 with an additional $411,624 generated
from private grants and contracts. Of the $5.1 million, $1.6
million came in the form of Gifts-in-Kind, $2,581,431 was
made in pledges, and $1,893,256 was received in cash donations.
Nearly 6000 individuals, businesses, foundations, and other
organizations contributed to this record total which marked
the sixth straight year that private giving to the University
has increased.
In
addition to raising funds for special projects, capital purposes,
and program expansion, the UMD Foundation has significantly
increased the size of its endowment over the past several
years. As of June 30, 1993, endowment funds for the UMass
Dartmouth Foundation totaled $4,093,544. By the end of January
1999, our total endowment fund (including those accounts maintained
by the University Foundation Office in Boston) had increased
to $8,449,635.
The
financial records of the UMass Dartmouth Foundation are audited
by an independent accounting firm on an annual basis and include
gift verification and use measures. In addition, in 1998,
the Foundation participated in a Development Operations Assessment
study conducted by PriceWaterhouseCoopers and sponsored in
part by the University.
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