Additional information about 2014/15 budget process
What are the university reserve accounts and why does UVic have them?
I. Carry forward
Carry forward funds result from either additional revenue received during the year or unspent budget within departments at the end of the fiscal year. The University has a policy wherein departments are able to retain 100 per cent of funds remaining at year end. Approximately 75 per cent of the funds within the carry forward reserve are held by departments. Some of these funds are the result of unspent faculty start up, travel grants or other research support. Other commitments against these funds include contractual obligations such as severance or leave costs that have not yet been incurred. Carry forward funds may be used for priority initiatives as determined by the departments, and at each year end, departments are now required to specify their intended use. For academic areas, almost 50 per cent of carry forward commitments are to students for scholarships, bursaries or awards, or to faculty for research.
Approximately 25 per cent of carry forward funds are held centrally. The majority of these (63 per cent) are held on behalf of departments to meet employee obligations, including unspent professional development funds, leave obligations etc. The remaining funds are allocated for centrally funded information technology project,s such as the on-line degree audit project, with a small amount held as an investment reserve to protect against the fluctuations of the financial markets.
II. Equipment replacement
The university has close to $267 million in equipment and furnishings. Departments are required as part of their planning to ensure they have funds to replace these assets, if required, at the end of their useful life. Many of these assets are significant enough in value that departments need to save over a period of time to ensure sufficient funding is available when the asset needs to be replaced. This fund represents, for the most part, funds held by individual departments to replace critical assets (e.g. computers for student labs, equipment for teaching lab, facilities management equipment such as back hoes, vehicles etc.).
III. Capital
This fund consists of monies that the university has designated for capital purposes associated with university priorities. Since the provincial government no longer fully funds major capital projects nor provides sufficient funding for deferred maintenance or building renovations for functional purposes, the university must allocate funds each year for these essential projects. In the past, this capital reserve was used to fund new buildings such as the Bob Wright Centre, the David Turpin Building, First Peoples House, the Mearns Centre for Learning, the Administrative Services Building and the associated moves and renovations required to repurpose vacated space that occurred when the new buildings opened. For the Bob Wright Centre, for example, the total project budget was $66.6M with government funding $35.6M.
Currently funds within the capital reserve are allocated for the university’s contribution towards the Centre for Athletics, Recreation and Special Abilities (CARSA), funding for renovations as space is redeveloped or reassigned on campus, and deferred maintenance and infrastructure costs. They also currently include funding raised by Continuing Studies for a building addition.
Why is it not possible to use any of the carry-forward money to offset expected budget cuts?
Carry forward funds can’t be used to support ongoing costs such as those for regular faculty and staff positions, since unlike base budget, these funds are available only one time. The university has used carry forward in the past to fund a shortfall on a one- time basis to allow time for plans to be developed to reduce costs on an on-going basis. The university is projecting budget shortfalls into the future, and therefore ongoing base budget reductions are required to ensure the university remains financially viable.
What is the university’s contingency budget and why does UVic have one?
Good financial practice for any organization is to have an annual contingency budget that is available during the year to address unforeseen costs. At UVic, if these funds are not used during the year, they are allocated to a reserve account at year end, normally the capital reserve. The university’s contingency budget is approximately 0.7 percent of its operating budget or $2.3 million.
What are the total compensation costs for the University executive?
Total compensation for executive positions (President, VPs, and the University Secretary) is $1.86 million. For comparative purposes, total compensation costs for faculty, including vacant positions, is approximately $106 million.
Did executive members receive compensation increases the last few years when other employee groups were subject to PSEC instituted “net-zero” mandates?
The PSEC mandate was a net zero mandate with respect to general wage increases for 2010 and 2011. As with all other employee groups during this period, executive members did not receive a general wage increase nor did they receive a general wage increase in 2012.
For those employee groups with salary progression within rank or ranges (known as PTR), faculty and staff continued to receive PTR increases consistent with their respective agreements. Groups receiving PTR increases included faculty, PEA, CUPE members in particular locals, management excluded and executive members. Members of all of these groups continue to be eligible for progression increases each year with the exception of executive members and management excluded employees, whose compensation has been frozen since Sept. 2012.
In addition, all employee groups other than faculty have concluded agreements which involve across-the-board wage increases in 2012 and 2013. Executive members and management excluded employees are not eligible for across-the-board increases. The level of the across-the-board increases for faculty in 2012 and 2013 will be determined by arbitration in fall 2013.
Has the total complement of senior administrators (AVP on up) increased over the last five years?
The overall increase in senior administrators over this period is 1.0 FTE. The additional FTE is for the AVP International position, reflective of UVic’s growing international enrolment, presence and activities. Over this period, international student enrolment has grown 49 per cent to 1,665 FTEs (full time equivalent).
The total budgeted FTEs for VP and AVPs for 2012-13 was 16. The total budgeted FTE for this same group in 2008-09 was 14. The other FTE now included as part of this group resulted from a title change for the Director Research Services position to AVP Research Services.
The Vice-President Academic and Provost’s budget letter to the community in June 2013 references looking at a more decentralized and/or incentive based budget. What does this mean?
Many universities and colleges across Canada and the US are looking at different budget models. UVic has a relatively centralized budgeting process compared to many other institutions. Positions are approved centrally and compensation costs and revenue streams (for the most part) are managed centrally. This fall, the university intends to start a dialogue on the different types of budget models and determine whether a different approach may serve UVic better.