Financial Destiny

Trend Three:  Competition for state appropriations will increase and private dollars will become more essential. 

The University is both aided and hampered by its status within the Pennsylvania State System of Higher Education.  Although the University benefits from the collective power of fourteen institutions as a leverage for state appropriations, the added controls and unpredictable funding processes place greater need on the University to make effective use of existing resources and develop alternative sources of funds.

Strategies:

The University will conduct its business affairs at the highest professional standards and greatest efficiency.

SRU Goal:  Maintain credit-worthiness ratios within acceptable national benchmark standards.  The standard is no material weaknesses in internal controls and an unqualified audit opinion (zero problems).

ACTION     The University will maintain credit-worthiness ratios within
                acceptable national benchmark standards.  The standard is no
                material weaknesses in internal controls and an unqualified audit
                opinion (zero problems). (FA)

BASELINE   1. Credit-worthiness ratio was .019.  The threshold standard that
                 has emerged from bond analysts and rating agencies is 10 percent
                 or less. The institution is in a positive position as it compares to the
                 standard.  (2003)
                 2. Closed the 2002-03 fiscal year under a new auditing firm with 
                 no material weaknesses in internal controls and a clean unqualified
                 audit opinion. The audits were conducted using applicable Sarbanes
                 Oxley Act requirements. (2003)

UPDATE     The institution received an unqualified opinion and no material
                 weakness comments as it pertains to internal controls in 2006.
                 The credit-worthiness ratio was .021 in 2006 as compared to .020
                 in 2007. This ratio indicates the institution is continuing to maintain
                 a positive credit worthiness position and is consistent with its three-
                 year trend.  (2007)

UPDATE     The institution received an unqualified opinion and no material 
                weakness comments as it pertains to internal controls.  The credit-
                worthiness ratio was .015 in 2008 as compared to .020 in 2007. 
                This ratio indicates the institution is continuing to maintain a positive
                credit worthiness position and is consistent with its three-year trend.
                (2008)

UPDATE     The institution received an unqualified opinion and no material
                 weakness comments as it pertains to internal controls.  The credit-
                 worthiness ratio was .021 in 2009 as compared to .015 in 2008.
                 This ratio indicates the institution is continuing to maintain a positive
                 credit worthiness position and is consistent with its three year
                 period.  (2009)

UPDATE     The institution received an unqualified opinion and no material
                 weakness comments as it pertains to internal control.  The credit
                 worthiness ratio was .069.  This ratio indicates the institution is
                 continuing to maintain a positive credit worthiness position and is
                 consistent with its three year trend. (2010)

SRU Goal:  Reallocate resources from low demand and marginal areas to high demand and high performance areas.

ACTION     The University will continue to reallocate resources from low
                demand and marginal areas to high demand and high performance
                areas.  The standard is to reallocate at minimum 5% of university
                budget annually. (FA)

BASELINE   The institution reallocated 4.1% of the budget totaling $3.2 million
                (2003-2004)

UPDATE     The institution reallocated 6.4% of the budget totaling $6.4 million 
                (2007-2008)

UPDATE     The institution reallocated 7.7% of the budget totaling $8.9 million
                (2008-2009)

UPDATE     The institution reallocated 8.1% of the budget totaling $8.9 million
                (2009-2010)

UPDATE     The institution reallocated 8.5% of the budget totaling $9.6 million
                 (2010-2011)

SRU Goal:  Continue to leverage financial efficiencies within University operations.

ACTION     Improve the credit hour productivity of instructional base

BASELINE  The overall instruction was 558 credit hours per FTE instructional
                faculty (reported in 2003 for 2001-02 data)

UPDATE     612 credit hours per FTE (2007).  Decision was made to stabilize
                the productivity to sustain both this level of efficiency and the
                performance funding dollars received by this level of productivity. 

UPDATE     610 credit hours per FTE (2008)

UPDATE     614 credit hours per FTE (2009)

UPDATE     613 credit hours per FTE (2010)

ACTION      Review current contracts and internal processes to ensure that
                 resources are used effectively and efficiently.  (FA)

UPDATE     The University continues to see ways to outperform the state bid
                process to assure significant savings in recurring expenditures. 
                The local phone service competitive bid resulted in an annual
                recurring savings of $120,000.(2003-2004)

UPDATE     A new travel policy was developed in August ’06 to ensure university
                personnel are using the most economic means to travel.  From its
                inception through April 2008 the university saved $39,856 in travel
                costs; color copier with variable data copying technology reduced
                per copy expense by 20% and generated revenue in excess of
                expense by $97,498 since June 2002; First-class mail pre-sort
                program resulted in savings of $64,872 since September 2004;
                Bulk mail, pre-sort program resulted in savings of $121,582 since
                February 2002.  Implemented clerical and custodial applicant pool
                for full-time position vacancies in November 2005.  In 2007-2008,
                filled 26 clerical positions resulting in a savings of $4,598.10 in
                advertising costs for clerical positions; filled 12 custodial positions
                with a savings of $2396.44 in advertising costs.  (2007-2008)

UPDATE     Pre-sort mail program has resulted in savings of $15,148.23, a
                2.7% increase over last year; bulk mail pre-sort program resulted
                in savings of $20,364, a 19.56% increase over last year; and color
                copier program resulted in savings of $19,342, a 27.69% increase
                in savings over last year.  Compliance with the University vehicle
                travel policy, which requires travelers to use the most economical
                means of vehicle travel, generated cost savings of $36,154 for
                FY ’08-’09.  (2008-2009)

UPDATE     Compliance with the university travel policy, which requires
                 travelers to use the most economical means of vehicle travel 
                 generated cost savings of $28,444 for FY ’09-’10.  (2009-2010)

UPDATE      Compliance with the University vehicle travel policy, which requires
                  travelers to use the most economical means of vehicle travel,
                  generated cost savings of $18,590 (2010 – 2011)

The Strategic Plan and University Budgeting

The strategic plan drives the University budget.  Annually, budget allocations are based on two primary processes: (1) Project-based funding to meet specific initiatives that support the strategic plan; and (2) funding-by-rounds, where recurring budgets are evaluated to assure consistency and focus on strategic directions.  Regardless of each type, every funding request includes a link to the strategic plan along with an assessment plan designed to measure the outcomes of the allocation.  Typically, project-based funding is one-time seeding for initiatives but can be approved for repeated funding based on assessment results.  Funding-by-rounds are usually the methods by which recurring budget adjustments are made.  The University has set a goal to reallocate resources from low demand and marginal areas to strategic high demand and high performance areas.  The standard is to reallocate at minimum 5 percent of the university budget annually through either of the two processes.

Additionally, the university uses two different performance funding processes with academic departments.  The first process recognizes departments that have increased credit hour production over the base year.  This process is designed to provide additional resources to departments in order to service the growth.  The other performance funding process evaluates and funds academic departments based upon their qualitative and quantitative performance outcomes relating to several strategic initiatives.  Departmental assessments and five-year program review outcomes are also incorporated into this process.

The budgeting process is driven by basic principles:

• Student comes first.  Educating students is always the highest priority.
• Academic programs are a higher priority than nonacademic programs.
• Consultation with faculty, students, and administration on matters of the strategic plan and budget decisions are an inherent integral part of the shared governance of the University.
• Cuts and/or increases are not made “across-the-board.”  Doing so violates the purpose of the strategic plan and is a formula for mediocrity.
• The University cannot be all things to all people.  The budget reinforces the strategic priorities of the University to preserve the overall quality of the institution.