All-day workshop for trustees and executive leaders of a public university that must achieve ambitious new goals despite increasingly scarce resources. Topics include strategic finance and organizational change.
3. Understand strategic finance and how it
f
differs from traditional oversight
Appreciate the benefits of a strategic
h b f f
approach for YSU at this time
Define and prepare to pursue a specific action
f d f
plan to move to a strategic finance approach
7. State
Year Support $60
FY 2001 $48,354,640 State Share of Instruction Challenges
$50
FY 2002 $46,799,630
$46 799 630
FY 2003 $43,828,103 $ in Millions
$40
FY 2004 $44,391,413 $30
FY 2005 $43,439,709
$20
FY 2006 $42,168,147
FY 2007 $42,830,088 $10
FY 2008 $45,694,496 $0
FY 2009 $49,503,768
$49 503 768
01
02
03
04
05
06
07
08
09
10
20
20
20
20
20
20
20
20
20
20
FY 2010 $49,008,729
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
Amounts include State Share of Instruction, and Access and Success Challenge funding. YSU’s funding
, g g g
decreased from $48 million in FY2001 to $42 million in FY2006. State support during the past four fiscal
years has increased to levels near that of FY2000. Mandatory student tuition and fees were frozen during
FYs 2008 and 2009.
*
8. Challenge: Revenue Source Trends
70.0%
65.0%
65 0%
60.0%
Tuition and Fees
55.0%
50.0%
45.0%
40.0%
State Support
35.0%
30.0%
25.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
The proportion of revenue from state support has declined from over 50% in FY2000 to under
35% in FY2009, while the proportion of revenue from tuition and fees has increased to over
60% during the same period. 8
*
9. % Change
Cleveland State -4.6%
4 6%
Kent State -5.3%
Toledo -12.9%
Ohio State -13.0%
-13 0%
Cincinnati -13.6%
Miami -13.8%
Wright State(Median) -14.5%
14.5%
Shawnee State -15.3%
Ohio -15.5%
Bowling Green
g -15.6%
Akron -16.3%
Youngstown State -16.5%
Central State -17.5%
When adjusted for inflation SSI per FTE student has decreased 16.5% between FY2003 and
FY2007. This is the second greatest decrease among Ohio public universities.
*
10. FY2010
$1.2 Million Reduction in SSI from FY 2010
Budget
$500,000 Reduction from FY 2009
FY 2011
$4.9
$4 9 Million Reduction in SSI from FY2010
*
11. Challenge: Squeeze Plays
FY2001 FY2004 FY2007
State Support per FTE Student $5298 $4314 $4019
General Fund Budget per FTE $10,863
$10 863 $11,250
$11 250 $12,748
$12 748
Student
Full Time Employees per 1000 113 103 103
FTE Students
Since FY2001, State Support per FTE Student has decreased, while the
General Fund Budget per FTE Student has increased. This reflects the
growing share of revenues from student tuition and fees. During the same
period the number of Full Time Employees per FTE student decreased by 10.
*
11
12. Honor Commitments and Obligations
H C it t d Obli ti
Control Expenses
C t l E
Reallocate Resources
R ll t R
Support Initiatives and Strategic Plan
S t I iti ti d St t i Pl
*
12
13. • Budget Development Actions
Non-Faculty Vacancy Deferral
25 Positions
P iti
$1.13 Million
Major Expense Reductions
$1.13 Million
Reallocations
$2.57 Million
Funding for Academic Initiatives
*
14. Challenge: New Funding Model
Factor Previous Model Current Model
Enrollment 14th Day FTE Enrollment Course Completions,
excluding “F”
Degree
D Not I l d d
N t Included; Included, Success Ch ll
I l d d S Challenge
Attainment Success Challenge rolled into Model
Student Not Included Weights course completion
Economic Status and degree attainment by
OIG students
Access Mission Not Included; Access Rolls Access Challenge into
g
Challenge Model
Stop Loss 100% 99% 1st year and 98% 2nd
y
year.
*
14
19. Ensure
E • FIDUCIARY: Are we doing
organization
pp
what we are supposed to
fulfills its
mission do?
Ensure
organization’s • STRATEGIC: Will we exist
organization s
long‐term and succeed “forever?”
viability
y
21. Vision Results
Strategy Long term
Concepts Business plan
Resources Customer wants/needs
d
Future Evidence
Expertise
p Competition
p
Support Quality
Readiness Efficiency
Productivity Brand, positioning
Brand positioning
22. How would this affect our long‐term viability?
ff
What is the tradeoff with other needs?
What would be the 5‐10 year impact?
h ld b h
How does this advance our strategy?
What are the key national trends?
h h k l d
31. In an “age of discontinuity,” as Drucker called
f
the current era, entrepreneurs could find
significant opportunities to create or
f
transform organizations if they were willing
to get ahead of societal changes. Drucker
h d f l h k
said that the best way to predict the future is
to invent it.
Rosabeth Moss Kanter, HBR
32. Thus, a company like GM could not survive
Th lik GM ld t i
simply by doing the old things with redoubled
efficiency and lower costs. The company
efficiency and lower costs The company
needed to dramatically rethink its entire
organizational model and related
assumptions…. Sometimes there is no going
back, because industry conditions and
y
societal needs have forever shifted, requiring
an organization to do things in fundamentally
new ways.
Rosabeth Moss Kanter, HBR
33. 20th Century was one of
h
technological innovation
21st C t
Century must be one of
t b f
institutional innovation
David Wiley, BYU, http://davidwiley.org/
47. Federal
Government
Economy Available
State and Local
Govt. Funds
• K-12
• Corrections
Higher • Health Care
Education • Other G t
Oth Govt.
Student Aid Appropriations/Grants
Tuition
Students Institutions
Scholarships &
Waivers
*
50. Increase efficiency
ff
Increase administrative productivity
Leverage stimulus money
l
APLU survey just out: “The survey results
h l
indicate that "universities are striving to
protect the core education mission of their
h d f h
institutions.”
53. Budget Only Strategic Approach
Set fixed targets Scorecard
Establish financial expectations
p Business plans
Manage costs Cost‐benefit analyses
Prioritize & allocate resources Rolling financial forecasts
Fixed budget incentive targets
g g Trending, benchmarking
g, g
Dynamic resource allocation
56. Strategic Strategic
Finance Goals
Strategic
Indicators
d
Communication
Information
Actions Analysis
Course Correction
BOT and University Personnel
University Personnel
58. Costs = spending, not prices
Costs = spending not prices
Focus on Education &Related, not total
spending
Measure cost per student and cost per
degree/completion
Look at patterns over time
58 *
59. Productivity
Cost reductions = improvements =
p
Increase in output
Permanent structural (learning, research, jobs),
( g, , j ),
reductions in spending
d ti i di without changing
admissions or spending
59 *
60. Reduce high cost/low demand programs
R d hi h /l d d
Address retirement eligibility
Reduce growth in health care
Consolidate administrative functions
Reduce spending on non revenue producing
Reduce spending on non‐revenue producing
athletics
Restructure debt
Restructure faculty compensation and
rewards (use turnover to substitute teaching
faculty for research faculty)
f l f hf l
60 *
61. Increase in student retention and graduation
Reduce excess credits for the degree
Increase credit‐by‐exam
d b
Increase distance‐based learning programs
Increase proportion of graduates who meet
f d h
goals for critical learning
Increase proportion of students who remain –
f d h
and are employed – in state
61 *
63. Academic leadership actions such as:
d l d h h
Students come to college fully prepared (no
remediation)
Accelerated learning
Minimize “rework” and reduce credits to degree
g
Improve rates of course completion
Encourage use of assessment/”test out” options
Learning in the workplace/credit for experience
slide 63 *
64. Commit to average undergraduate tuition growth
d d h
no more than CPI accompanied by increased need‐
based aid
Allow differential tuitions for high cost/demand
p g
programs
Experiment with low priced options
Greater on‐campus employment opportunities for
students
Reduce time to degree
64 *
65. Support change in approach to budget
building
Examining old habits and conventional wisdoms
about costs
Focus on big picture, and progress on the goals
and the strategies to achieve them
Fulfill both fiduciary and strategic roles
lf ll b h f d d l
65 *
67. Are state and university strategic goals
Clearly stated?
Clearly – and frequently – communicated?
Accompanied by performance metrics?
Measured and widely reported at least annually?
Is performance considered in the resource allocation
process – are resources targeted to priorities/highest
payoff relative to goal achievement?
Are metrics for productivity in place?
A t i f d ti it i l ?
SCH/FTE faculty
Students/administrator
slide 67 *
68. p
Is there evidence of improvement?
Is faculty time being allocated to highest priorities?
Is institutional aid being effectively used to help meet
goals?
Are there some things the institution shouldn’t be doing?
A h hi h i i i h ld ’ b d i ?
Where would collaboration yield better results at less
cost?
Are investments being made in
Restructuring curricula
Reengineering courses
Improving business processes
I i b i
Enhancing support services
Innovative approaches
slide 68 *
69. Strategic Strategic
Finance Goals
Strategic
Indicators
d
Actions
73. Be an advocate for strategic goals
f
Insist on seeing the data behind the decisions
Focus on what the numbers are saying
h h b
Have the courage to ask the hard questions
Regularly review the mission and market
l l h d k
return from new initiatives
Develop joint board committee meetings and
l b d d
activities – e.g., Finance and Academic
Support rotation between board committees
b b d
*
75. Decisions
D i i
Commitment to strategic role
Agreement on key elements of that role (e.g.,
strategic goals, strategic financial goals, strategic
indicators)
Ensure clear Board/staff roles and relationships
80. Presentations from Midwest Higher Education Compact Summit 11/6/09
P t ti f Mid t Hi h Ed ti C t S it /6/
http://www.mhec.org/index.asp?pageID=23
HITTING HOME: Quality, Cost, and Access Challenges Confronting Higher
Education Today, Travis Reindl, www.makingopportunityaffordable.org
y, , g pp y g
“What would Peter say?” Rosabeth Moss Kanter, Harvard Business Review,
November 2009.
“The Board and its Financial Responsibilities,” Tom Longin and Rick Staisloff, AGB
1009 National Conference
83. g y f
Youngstown State University will become a national model for student‐
centered comprehensive urban universities, transforming its students
into successful professionals, scholars, citizens, and leaders.
Building upon its tradition of developing the body, mind, and spirit, YSU
Building upon its tradition of developing the body mind and spirit YSU
will provide a full range of services and amenities to meet the needs of
residential, commuter, and offsite students.
In partnership with schools and the corporate, public, and non‐profit
h h h l d h bl d f
communities, YSU will promote diversity and excellence in teaching,
research, and service to increase the educational attainment, economic
, ,
prosperity, and environmental vitality of the region.
The University will be a center for intellectual and cultural activity and
a catalyst for public engagement.
a catalyst for public engagement