University of Maine System Budget Analysis, 2003-2013:
The exercise is designed to immerse you in doing budget analysis. Besides the obvious relevance of the university budget to you as students, I’ve developed this exercise so you could work with finances for an organization that depends on charges for services (a.k.a., tuition and fees). In other words, the University of Maine System is more like a business or nonprofit organization than a tax-funded government organization. Although public universities receive part of their funding from governments, they actually are businesses and use a business model to determine how much they should charge for services. Later in the course we will look at “break-even analysis”, a cost and financial analysis strategy used by businesses to determine how much they must charge for services or goods in order to “break even”, which means to simply cover costs, with no profit.
Scenario:
For this exercise you will be assuming the role of a consulting budget analyst hired to assist the hypothetical organization “Good Jobs for Maine Graduates.” ‘Good Jobs” believes the state needs a high quality university system that is accessible to all students. Governor Lepage recently announced that he would increase funding for the UM System so that tuition rates could remain frozen. By doing this, he and the Maine Legislature are subsidizing the “price” students must pay to attend UMS campuses. While “Good Jobs” applauds the State’s efforts to maintain tuition at a reasonable level, they have heard from many students that tuition is too high and that students are bearing a larger share of costs than they feel is appropriate.
“Good Jobs” is ready to lobby the Legislature for more funding for public higher education. They plan to argue that good jobs will only come to Maine if employees know there will be a steady stream of well-educated students emerging from the University System. In their view, this means the State of Maine needs to make a strong commitment to financing the University System. Elizabeth Getjobz, the Executive Director of “Good Jobs”, recently read the NACUBO report on budget trends in public universities, so she has asked you to look at UMS finances from 2003 through 2013.
Doing the Number Crunching and Analysis:
You will analyze the 2003 and 2013 budgets for the UMS and prepare a report for Elizabeth Getjobz and the Board of Directors of “Good Jobs for Maine Graduates.” The data you will analyze is taken from audited UMS Financial Reports. Hence, the amounts represent “actual” rather than hoped-for revenues and planned spending.
I have prepared an Excel template that shows revenues and expenditures for the UMS for 2003 and 2013. The UMS budget worksheet template is set up to facilitate your number-crunching and to guide your analyses. I also have entered some formulas to get you started.
I suggest that you print out the template so you can see what you are doing. After you do the calculations, print out the completed template and analyze what you see.
Writing Your Briefing:
Your tone should reflect enthusiast professionalism and convey a sense that you care about the UMS budget, while nonetheless remaining objective. Naturally, your briefing will be succinct, without sacrificing quality or important information in pursuit of brevity. The briefing will be written clearly, in an easy to read format, and crafted to enlighten without trying to explain “why” things look like they do (which would be your opinion).
o Use bullets in an outline format to make your points, not in a paragraph format.
o Papers should be spaced at 1.25 and be no more than 3 pages in length.
Attachment:- ums-budget-analysis-exercise-template.xlsx