March 16, 2005
Dear Colleagues,
The FY 2004-2005 budget has just been completed and is being sent to the University of Louisiana System Office for review and approval. The budget has been placed online, and can be found at www.ulm.edu/05budget/. Just like last year, remember that you must look past the summaries and analyze the individual departments. This budget continues our philosophy of correcting certain budget practices employed in the past, and the items we address will be explained later in this letter.
The legislative session was a particularly difficult one with extremely strong demand for the limited state revenues. The University of Louisiana at Monroe received an increase of $1,286,990 in state appropriations, a 2.97% increase over last year. Included in that amount is $189,312 for Library and Scientific Equipment, an item that has historically been in the capital outlay budget. Therefore, it is an increase to the general fund budget but not the university.
The budget for FY 2005 includes state mandated increases for civil service adjustments, retirement rate adjustments, and group health insurance increases. The total mandated increases amount to $2,019,137. This gap of over $1 million was the subject of substantial debate in the legislature during the closing days of the session. The Board of Regents and the University of Louisiana System proposed a 4% operational fee to be charged our students to cover this gap. Our current projections indicated that after allowance for hardship waivers ULM should collect slightly over $833,000 from the operational fee. We also expect to collect approximately $825,000 from the 3% tuition increase.
In addition to the mandated increases, we made some changes during the year that required us to dedicate funds over and above the mandated increases. We annualized the recurring portion of the salary increases from last year. Remember that we only funded 75% of the raises because they were implemented in October. In a continuing effort to attract more and better students we increased the amount and number of scholarships for both continuing students and incoming freshmen. We also dedicated funds for salary adjustments in nursing and pharmacy in accordance with the mandate from last years increase in state appropriations. We added funds for the Academic Success Center, Freshmen Year Experience classes, and additional tutors, and as usual we are expecting increases in utilities, as well as part-time and overload pay. We were forced to remove a number of vacant positions from the budget. The majority of these were administrative positions that we had not filled during the previous year.
The decision to fund the non-recurring portion of the salary increase is contingent, as we discussed in the budget last year, on student enrollment this fall. It will take approximately 450 additional students over last fall to fund the non-recurring portion of the increase. Our first priority for use of those funds will be to grant the non-recurring raises. We may be forced to make the adjustment non-recurring again so that we do not exacerbate the budget situation for next year.
In an effort to continue the decentralization of the budget we moved $200,000 of indirect cost recovery funds from the revenue available to the general fund directly to the dean's budgets to support the research in the colleges that generated these funds. We also moved funds that were in Academic Support and under the control of the Provost into the college budgets.
In the past, budgets at ULM have included a negative expenditure amount. This means that expenditures were reduced by the amount of monies transferred to the general fund from auxiliary enterprises and restricted funds. Last year we budgeted approximately $700,000 as a negative expenditure, this figure was down form $1.2 million the year before. These funds were called "shared costs" in the budget document, and in theory were supposed to come from overhead charged to auxiliaries. This year we determined that the more appropriate treatment of these funds was to recognize them as revenue. This gives a clearer picture of actual expenditures without the artificial reduction. In addition, we moved all of the professional fees from health sciences into the revenue to accommodate the salary adjustments and program expansion in the College of Health Sciences. Therefore, the budget will show approximately $1 million in additional revenue this year over last year. These funds have always been in the budget but accounted for in a different way. Once again, we believe that this method shows a clearer picture of our true revenues and expenditures. We fully expect that we will be making other accounting changes in the future to more accurately reflect ULM's revenues and expenditures.
The first budget developed by this administration for FY2003 reorganized funding and conservatively budgeted revenues so that we could assure financial stability. Last year we moved more funds under the control of the Provost and the academic components of the campus. This year we continue that trend by moving more funds and their control to the colleges and academic departments. We will continue to emphasize academics, recruitment, and retention as we continue our forward momentum. The last two years have been very good for all of us at ULM. We have very carefully budgeted funds to make sure we build upon this progress.
James E. Cofer, Sr.
ULM President