Task: Comprehensive Budgeting For a University
Suppose you are the controller of Western Idaho State University. The university president, Willa Redcloud, is preparing for her annual fund-raising campaign for 2001-2002. To set an appropriate target, she has asked you to prepare a budget for the academic year. You have collected the following data for the current year (2000-2001):
Undergraduate Graduate
Division Division
Average salary of faculty member $46,000 $46,000
Average faculty teaching load in semester
credit-hours per year (eight undergraduate
or six graduate courses) 24 18
Average number of students per class 30 20
Total enrollment (full-time and part-time
Students) 36,00 1,800
Average numbers of semester credit-hours
carried each year per student 25 20
Full-time load, semester hours per year 30 24
For 2001-2002, all faculty and staff will receive a 6% salary increase. Undergraduate enrollment is expected to decline by 2%, but graduate enrollment is expected to increase by 5%.
• The 2001-2002 budget for operation and maintenance of facilities is $500,000, which includes $240,000 for salaries and wages. Experience so far this year indicates that the budget is accurate. Salaries and wages will increase by 6% and other operating costs will increase by $120,000 in 2001-2002.
• The 2000-2001 and 2001-2002 budgets for the remaining expenditures are:
2000-2001 2001-2002
General administrative $500,000 $525,000
Library
Acquisitions 150,000 155,000
Operations 190,000 200,000
Health services 48,000 50,000
Intramural athletics 56,000 60,000
Intercollegiate athletics 240,000 245,000
Insurance and retirement 520,000 560,000
Interest 75,000 75,000
• Tuition is $70 per credit hour. In addition, the state legislature provided $780 per full-time equivalent student. ( A full-time equivalent is 30 undergraduate hours or 24 graduate hours) Tuition scholarships are given 30 full-time undergraduates and 50 full-time graduate students.
• Revenues other than tuition and the legislative apportionment are:
2000-2001 2001-2002
Endowment income $200,000 $210,000
Net income from auxillary
Service 325,000 335,000
Intercollegiate athletic receipts 290,000 300,000
• The chemistry/physics classroom building needs remodeling during the 2001-2002 period projected cost is $ 575,000.
1. Prepare a schedule for 2001-2002 that shows, by division, (a) expected enrollment, (b) total credit hours, (c) full-time equivalent enrollment, and (d) number of faculty members needed.
2. Calculate the budget for faculty salaries for 2001-2002 by division.
3. Calculate the budget for tuition revenue and legislative apportionment for 2001-2002 by division.
4. Prepare a schedule for President Redcloud showing the amount that must be raised by the annual fund-raising campaign.