Office of the Provost

Spring update on FY22 Budget
 

Dear UCR Colleagues,

While we await news on the final State budget and our allocation from the UC Office of the President for 2022-23, I thought I’d write to inform you about a number of financial decisions recommended by the Campus Finance Committee (CFC) and approved by the Chancellor and me since I last wrote in November about UCR’s 2021-22 operating budget.

$25,000,000 in one-time funds for instructional needs

I am delighted to report that we are investing about $25M of accumulated lottery funds (one-time monies) to address deferred instructional needs. The Library received $4.5M (for collections, compact shelving, and enhanced learning spaces), University Extension received $370K (for instructional technology and digital production), Undergraduate Education received $725K (for graduate student assistants in XCITE and for a customer relations management system as requested by the academic advisors), and $752K was allocated for a campus video production studio. Each college and school received an initial block grant (BCOE $650K, CHASS $850K, CNAS $850K, Business $350K, SOE $300K, SOM $300K, SPP $300K). Then, in consultation with department chairs, the deans developed additional needs lists, which will be funded up to the following amounts (BCOE $4.23M, CHASS $4.522M, CNAS $6.831M, and Business $168K).

Moving forward, we will use our annual revenues from the California Lottery ($2.5M) to support the following campus-wide needs:

• Four librarian positions to support quantitative and information literacy
• Five staff in Undergraduate Education (academic interventions; transfer student success; instructional design; and two in pre-professional advising)
• Academic student employees in the Academic Resource Center (to support tutoring, ARC 35, Writing Center, Supplemental Instruction, and Highlander Early Start Academy)
• Supplemental Instruction in the Academic Resource Center to address both STEM and non-STEM needs
• Professional development for academic advisors
• Expansion of high-impact practices (e.g., undergraduate research projects)

Adoption of credit hour weights for new tuition dollars

The CFC spent several meetings discussing the 2020 Report of the Ad Hoc Committee on Credit Hour Weights and recommended that UCR weight the distribution of new tuition dollars associated with enrollment growth (known in the budget model as “workload FTE according to relative disciplinary costs of instruction as identified by the Delaware Cost Study. Heretofore, tuition from enrollment growth above the 2021-22 baseline will be weighted as follows:

Note that over the past five years, the cumulative permanent core new tuition dollars distributed to the colleges and schools equate to about $4,000,000, which represents about 1.5% of the colleges and schools’ permanent budgets in FY22 ($265M). The subventions that form the majority of the base allocation to colleges and schools remain unchanged by this action, but the subvention funding is adjusted annually based on salary and benefit increases and any other core funded central activities to the Schools and Colleges. Note also that School of Medicine is now able to operate its finances independently, consistent with other medical schools, since it received a permanent state allocation of $25M in FY21.

Additional F&A directed to colleges and schools

We have decided to send a greater proportion of Facilities and Administrative (F&A) Cost Recovery Funds derived from extramural contracts and grants to the colleges and schools and to treat F&A as a permanent source of core funding (instead of as temporary funds, so the annual salary and benefit increases can be covered by the central campus core budget). Deans can use F&A for any expense, as they do with state and tuition funds; they will also be expected to cover the full cost of faculty start-up packages. The allocation of F&A has changed as follows:

 

UNIT	FY22 F&A allocation	Changeà	FY23 F&A allocation
Central Campus	40%	Decrease by 26%	14%
Schools, Colleges, Other Orgs	25%	Increase by 26%	51%
VCRED	20%		20%
Departments	10%		10%
Primary Investigators (PIs)	5%		5%

As our talented faculty increase extramural grant funding, indirect cost recovery will grow as well and will be distributed annually according to this formula. [Note that SOM is not included since it is now structured to be more financially independent.

Allocation of administrative cost recovery from self-supporting master’s programs

After the Academic Senate approved the new policy on the role of Financial Planning & Analysis in the financial management of self-supporting graduate professional degree programs, we decided to allocate the administrative cost recovery from these master’s programs as follows:

The distribution reflects the workload necessary to support the establishment and ongoing management of these degree programs (in Academic Senate and Graduate Division) and the programs’ share of infrastructure costs at the university (central campus) level. For FY23, Graduate Division will receive $256,000 and Academic Senate will receive $100,000.

Salary increases

As Chancellor Wilcox wrote in his email to the campus on May 12, policy-covered staff will receive a 4.5% salary increase and academic employees will receive a 4% base salary increase, contingent upon a 5% allocation increase from the state for 2022-23. Faculty with off-scale salaries will also receive a 3% increase on that component. Union-represented staff and academic employee wages are set by their respective collective bargaining agreements. All salary increases and accompanying benefit increases will be funded by the central campus core budget. These increases are expected to total approximately $22M.

Salary equity program for faculty

In addition to the cost-of-living increases, UCR will implement a salary equity program in 2022-23 to bring all Senate ladder-rank faculty to within 3% of the expected median salary for their discipline, rank, and step. These equity adjustments, for 213 faculty, represent a central campus investment of $1.3M. For many years, UCR has supported an every-other-year salary equity program for staff positions and will continue to do so. The program ran in fall 2021, and the next cycle will be fall 2023.

Update on HEERF funds

UCR received a total of $165.9M in Higher Education Emergency Relief Funds (HEERF) during the COVID-19 pandemic. As of December 31, 2021, we had expended 96% of all the HEERF monies we received, the highest percent in the UC system. We expect the rest to be fully expended by the end of the summer.

Vice Chancellor Bomotti and I will report back to you once the complete 2022-23 operating budget has been finalized.