Budget Book - Yale University · Budget Book Fiscal Year 2017 For Yale Faculty, Staff, and Students only

Budget BookFiscal Year 2017

For Yale Faculty, Staff, and Students only

Cover photo: Brandon Boyer YC ‘15 Analyst, Office of Financial Planning & Analysis, Yale University

FY17 Operating and Capital Budget Memo 1

FY17 Unit Hierarchy 9

A-Tables: Operating Exhibits

A-1 Yale University 10A-2 Central Campus 11A-3 Professional and Arts Schools 12A-4 School of Medicine 13A-5 FY17 Budget by Major Schools and Units 14A-6 Management vs GAAP View 15

B-Tables: Supplemental Operating Exhibits

B-1 Grants and Contracts 16B-2 Contributions 17B-3 FTEs and Salaries 18

C-Table: Capital Budget

C-1 Approved Capital Budget 19

Appendix 20

FY 17 Budget Book Glossary of Terms 21

TABLE OF CONTENTSFY17 Budget Book

To: Benjamin Polak, Provost From: Stephen C. Murphy, Vice President for Finance and Chief Financial Officer Date: September 26, 2016 Re: Fiscal Year 2017 Budget

Below please find an overview of the FY17 Budget, which was approved by the Yale Corporation in May 2016. Executive Summary

• We are budgeting a surplus of $20 million from operations1 for the Total University, which is $7 million less than the FY16 budget due to increased contributions to fund retiree benefit liabilities (+$22 million) and a number of investments discussed below.

• Our target for administrative cost reductions in FY17 was $5.4 million, or 0.8%, and we overachieved our target slightly with $5.7 million of cost reductions. The cumulative cost reductions achieved for FY15-17 are 6.0%.

• The FY17 budget includes allowances for key areas: the faculty diversity and excellence initiative; the inclusivity investments; fundraising staff and events; enhancements to Yale College financial aid; implementation of the Workday ERP (finance and HR administrative software); as well as the increased funding for pension and retiree health liabilities.

• The FY17 budget includes the use of $5 million of the University’s central unrestricted reserves, i.e., the reserves controlled by the President and Provost. The important investments noted above stretched our financial resources, leading to this moderate use of central reserves.

1 All figures are based on the Management View unless otherwise indicated. The Management View represents the way Yale looks at financial information for internal discussion and decision-making purposes. This differs from how financial results are presented on a GAAP (Generally Accepted Accounting Principles) basis for external reporting purposes, e.g., Capital Replacement Charge (CRC) vs depreciation. The difference between the budget for the management view and GAAP view is discussed later in the memo.

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• The FY17 capital spending budget is $531 million. The largest projects are the new residential colleges, the Yale Science Building, and the renovations to the Sterling Chemistry Teaching Laboratories and the Beinecke Library. The plan also includes an assumption that Yale will issue $250 million in new debt.

FY17 Operating Budget

Total University (Table A-1)

The budget for Net Results for the Total University in FY17 is a surplus of $20 million from operations for the year, which is $7 million less than the FY16 budget.

Total FY17 budgeted external revenues for the University are $3.587 billion (Table A-1, line 9), an increase of $192 million, or 5.7%, over the FY16 budget. This is primarily due to growth in three areas: (1) endowment income (up $66 million, or 5.7%), reflecting the phasing in of recent endowment returns through the spending rule; (2) increases in grants and contracts income at the Medical School (up $51 million, or 9.8%), offset by a decline in Central Campus (down $6 million, or 4.8%), driven by lower grants and contracts in FAS; and (3) medical services income (up $45 million, or 5.4%) as the Medical School continues to expand the clinical practice. Also contributing to the FY17 increase are revenues from tuition, room and board, net of financial aid (up $14 million, or 4.1%), primarily due to term bill increases, which range from 2% at the Divinity School to 5.6% at the School of Public Health. The Yale College term bill increase is 3.9%.

$ millions FY17 FY16 FY15Budget Budget Actual $ %

Revenue $ 3,587 $ 3,395 $ 3,298 $ 192 5.7% Expense 3,560 3,362 3,222 (198) (5.9%) Operating Results 27 33 76 (6) Funds Transfers from/(to) Non-Op (7) (5) (59) (2)

Net Results1 20 28 17 (7)

1 add to/(use of) operating fund balances; sums may not add due to rounding.

FY17 vs FY16 BudgetBetter/(Worse)

Table 1: Yale University – FY17 Operating Budget (Management View)

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Total FY17 budgeted expenses are $3.560 billion (line 22), an increase of $198 million, or 5.9%, over the FY16 budget. Salaries and benefits are budgeted to increase by $131 million, or 6.2%, driven a combination of factors summarized below:

FY16 Budget – Salaries and Benefits $2,102 million

Inflation (+3.0% of the total % Δ vs FY16) $63 Increase in Retiree Funding (+1.0%) $22 Increase in FTEs – Faculty/Staff (+2.9%)2 $61 Mix/Other (-0.7%) ($15) Total Increase (+6.2%) $131

FY17 Budget – Salaries and Benefits $2,233 million

Major assumptions include wage inflation at 3.0% and an increase in contributions to fund retiree benefits by $22 million or 43% over the prior year retiree funding contributions which in FY17 will now be equal to projected retirement benefit payments for the year (total pension and retiree health payments in FY17 will be approximately $75 million). In addition, faculty and staff FTEs (full-time equivalents) are budgeted to increase by 420 or 2.9% from FY16, with the increases concentrated in the Medical School from growth in research and the clinical practice (268 FTEs or +4.2% vs the prior year budget) and with the Faculty of Arts and Sciences (36 FTEs; +2.1%) due to program growth, new investments for new residential colleges support, and inclusion initiatives.

Non-salary expenses (line 15) are $1,169 million, an increase of $65 million, or 5.9%, due to increased activity at the School of Medicine ($40 million), investments in technology ($12 million) largely related to Workday, anticipated utilization and rate increases at Yale Health ($9 million), and inflationary increases, offset by decreased external utilities expenses of $21 million primarily related to lower transportation costs.

Interest Expense, Capital Replacement Charge (CRC), and Other Amortization (line 16) are $373 million, an increase of $19 million, or 5.4%, over FY16 due to inflation, updated category costs for recent building renovations, buildings added to the CRC calculation which previously had been excluded, as well as increased departmental spending at the Yale Medical Group to fund renovation activities at 350 George Street. These were partially offset by favorable interest expense (+$10 million vs FY16 budget) on external debt as a result of refinancings to take advantage of the lower interest rate environment.

2 FTE increases include 268 at the Medical School (+4.2% vs the prior year budget), 76 in Central Campus (+1.1%), and 76 in Professional & Arts Schools (+5.9%).

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Allocations of Central Services (line 17) is favorable versus last year, primarily due to lower utilities costs from the lower gas transportation costs.

Central Campus (Table A-2; see page 9 for a list of schools and units in Central Campus)

For the Central Campus3 we are budgeting Net Results at a surplus of $21 million, which is $3 million lower than the FY16 budget.

Total FY17 budgeted external revenues for the Central Campus are $1.580 billion (Exhibit A-2, line 9), an increase of $59 million, or 3.9%, over the FY16 Budget. This is primarily due to increased endowment income (up $47 million, or 5.5%) and tuition, room and board, net of financial aid (up $7 million, or 3.2%), which reflects the term bill increases offset by higher financial aid due to adjustments in the financial aid policy to reduce student effort. Grants and contracts revenue declines (down $6 million, or 4.8%) primarily due to the end of a large grant in the Molecular, Cellular and Developmental Biology department and FAS faculty departures.

Total FY17 budgeted expenses, net of internal revenue for the Central Campus are $1.502 billion (line 22), an increase of $68 million or 4.7%. Salaries and benefits increase by $56 million, or 6.2%, primarily due to increased retirement benefit funding (excluding the $13 million increase in retiree funding, salaries and benefits for the Central Campus would have increased by $43

3 See the Target Unit Hierarchy for schools and units included in the Central Campus, Medical School, and Professional and Arts Schools groupings.

$ millions Central MedicalProf &

ArtsTotal

Campus School Schools Yale

Revenue 1,580 1,630 377 3,587 B/(W) vs FY16 Budget $ 59 107 27 192

% 3.9% 7.0% 7.7% 5.7%

Expense 1,502 1,635 423 3,560 B/(W) vs FY16 Budget $ (68) (100) (30) (198)

% (4.7%) (6.5%) (7.5%) (5.9%)

Operating Results 78 (5) (46) 27 B/(W) vs FY16 Budget $ (9) 6 (3) (6)

Net Results 21 13 (13) 20 B/(W) vs FY16 Budget $ (3) (2) (2) (7)

Table 2: FY17 Budget by Major Area

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million or 4.8%) as well as investment in new initiatives such as the new residential colleges, inclusion initiatives, fundraising, and the Center for Teaching and Learning.

Non-salary expenses increase by $14 million or 2.1%, driven by inflation and other major investments including technology projects (+$13 million) including Workday (finance, HR, and procurement) and DARCY (gift and donor tracking), faculty excellence (+$5 million), as well as increases in Yale Health utilization and rates (+$9 million). These increases were partially offset by lower utilities costs (-$21 million) as a result of lower gas transportation costs.

The range of investments noted above are all important, but they are also stretching financial resources for FY17. As a result, in the FY17 budget, we have planned the use of $5 million of central reserves, an amount we believe is affordable and appropriate.

School of Medicine (Table A-3)

The Medical School’s budget reflects a continued growth in the clinical practice, both to build a nationally preeminent clinical program and to generate financial support for research and education. Two notable financial changes expected in FY17 include the change in academic support from the Provost (down from $18 million in FY16 to $10 million in FY17) and the use of $9 million in clinical reserves from the Yale Medical Group to renovate new space. The overall budget also includes an increase of MD/PhD students (with the class size increasing from 12 to 20) to reach a goal of 160 total students by FY22. FY17 will be the first year of a new curriculum, and the School will increase the number of scholarships for disadvantaged medical students.

Total external revenues for the Medical School are $1.630 billion (Table A-3, line 9), an increase of $107 million or 7.0% over the FY16 budget. This is primarily due to growth in grant and contract income (up $51 million, or 9.8%), which reflects the strong activity and substantial new awards reflected in FY16 second quarter results. Through December 2015, the faculty have continued to achieve a high success rate in securing National Institutes of Health (NIH) funds, and their proposals have risen by nearly 20% in the last 2 years. In addition, the recent increase to NIH’s budget of $2 billion (6.7%) will make significantly more funding available for the faculty to pursue. Medical services income (up $43 million, or 5.4%) from the growth in clinical services comes from improved physician productivity, increased support from the hospital, faculty recruitment, and practice acquisitions. The revenue projected includes an assumption of 1.2% increase in reimbursement rates, and an increase in support from the hospital to $251 million (+$22 million vs the FY16 budget). The FY17 budgeted total expenses, net of internal revenue, for the Medical School are $1.635 billion (line 22), an increase of $100 million, or 6.5%, over the FY16 budget, primarily driven by

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growth in salaries and benefits related to salary inflation and the expansion of the clinical practice and research enterprise. The clinical practice plans to add 78 physicians and associated staff, and research departments are budgeting to add 108 FTEs in FY17. Non-salary expenses are budgeted to be $400 million, an increase of $40 million, or 11.2%, primarily due to programmatic clinical and research activities.

Net Results (after internal funds transfers, including $10 million in dowry support from the center) are budgeted to be a surplus of $13 million, which represents a decrease of $2 million from the FY16 budget. This is the result of a surplus of $14 million in departments, which is offset by the use of $0.8 million in unrestricted balances available to the dean.

Professional and Arts Schools (Table A-4; see page 9 for a list of schools and units)

Total FY17 budgeted external revenues for the Professional and Arts Schools are $377 million (Table A-4, line 9), an increase of $27 million or 7.7%, over the FY16 budget. The increased revenue is due to endowment income (up $12 million or 6.4%), tuition, net of financial aid (up $5 million or 5.7%), and grant and contract activity (up $5 million or 32.7%). The increase in tuition income comes primarily from the School of Management ($3.5 million or 8.0%) from a combination of tuition increases and the phasing in of a larger class size, as well as from the School of Nursing (up $1.6 million, or 15.5%) which is increasing enrollment to achieve a more sustainable financial model. Increased grant and contract revenue is driven by activity at the School of Nursing (up $2.1 million, or 74.7%) and the School of Forestry and Environmental Studies (up $1.9 million, or 17.9%).

Total FY17 budgeted expenses, net of internal revenue, for the Professional and Arts Schools are $423 million (line 22), an increase of $30 million, or 7.5%, over the FY16 budget. Faculty and staff salary and benefits grow by $17 million, or 8.1%, primarily due to increases at (1) the School of Management (up $7.5 million, or 12.5%) from hiring ahead of anticipated faculty retirements, new research activities, and new programmatic operations, and (2) the Law School (up $3.4 million, or 5.8%) from increases in faculty and development staff. Non-salary expense is budgeted to increase by $10 million, or 13.5%, primarily from growth at the School of Management (up $6.3 million, or 21.5%) due to program growth and other investments such as technology costs in the new building.

Net Results (after internal funds transfers) are budgeted to be a deficit of $13 million (line 25), which is unfavorable vis-à-vis the FY16 budget by $2 million, while noting several schools have a practice of budgeting conservatively.

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FY17 Operating Budget – GAAP View

The figures discussed above are based on the Management View of the University’s financial results. The Management View represents the way Yale looks at financial information for internal discussion and decision-making purposes. This differs from how results are presented on a GAAP (Generally Accepted Accounting Principles) basis for external reporting purposes. The GAAP presentation of Yale’s financial results is important for a number of reasons, including the fact that outside parties such as credit rating agencies rely on them.

The projected differences between the Management View and GAAP presentation of the University’s financial results from operations are as follows:

For the FY17 budget the Net Results on a GAAP basis is a surplus of $11 million from operations for the year, an increase of $10 million versus the FY16 budget. The change from the FY16 budget is primarily due to a lower GAAP adjustment for pension and retiree health liabilities due to the increased funding of retiree liabilities in the Management View.

Please see Table A-6 for additional detail on the budgeted GAAP results.

FY15 FY16 FY17Actual Budget Budget

Management View - Net Results 17 28 20

Operating Pledge Activity 107 13 7 Expenses Related to Long Term Liabilities (56) (70) (54)

Pension and Retiree Health (43) (66) (51)Other (13) (4) (3)

CRC in excess of depreciation 35 2 9 Capital Gift Funding of CRC (14) (8) (10)CRC Used for Non-Capital Costs (12) (13) (13)Realized Hedge Activity 57 45 44 Funding Transfers 59 5 7

Subtotal 177 (26) (10)

GAAP View - Increase in net assets from operations 194 1 11

Table 3: Summary of Differences Between Management and GAAP Views

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FY17 Capital Budget Capital Spending Summary (Table C-1) The FY17 capital projects budget is $531 million (line 12). This number includes $358 million for major projects (line 1) and $149 million for “capital buckets,” i.e., multiple capital projects less than $4 million each. In addition, other costs paid with capital project funding sources are shown since they impact the capital funding plan described below. These expenses, which total $25 million in FY17, relate to (1) costs on these projects and other smaller repairs projects that cannot be capitalized, (2) capitalized interest, and (3) an allowance for inflation. There are a number of projects which are already committed and either in construction now or will be shortly. The largest of these projects are:

• New Residential Colleges • Sterling Chemistry Teaching Laboratories • Beinecke Comprehensive Renovation • Hendrie Hall Renovation

Several other projects are approved to move forward into construction phases in FY17. Additional projects continue only through the next phases of planning and design, forestalling the decision of when to commit to construction timing until future strategic priorities are set. Capital Funding Plan The FY17 capital budget will be funded primarily through gifts, Capital Replacement Charge (CRC), the issuance of $250 million of new debt in FY17 with an additional $100 million of new debt anticipated in FY19, and departmental funding. We are projecting to begin FY17 with $22 million in capital funds. During FY17, additional capital funds totaling $574 million are budgeted to become available primarily through new gifts, CRC, and new debt. The $531 million spending plan described above will be funded by restricted gifts of $43 million, current and prior year CRC of $306 million, new debt of $168 million, and by departmental funding and grants of $14 million. This results in a projected FY17 ending balance of $64 million in capital funds. The remaining bond proceeds would be used by the end of FY18. Please let me know if you have any questions.

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Faculty of Arts &

Sciences

Yale University

School of MedicineProfessional & Arts

SchoolsCentral Campus

Professional

SchoolsAthletics

Administrative

Units

University

Unrestricted

FY17 Budget Target Unit Hierarchy

Arts SchoolsMuseums &

Libraries

Divinity School

School of Forestry and ES

School of Law

School of Management

School of Nursing

School of

Architecture

School of Art

School of Drama

School of Music

Yale College Tuition &

Aid

Yale College Operating

Units

Division of Faculty

Salaries

Graduate School

Other FAS and Academic

Depts

Beinecke Library

Central Library

Peabody Museum

Yale Art Gallery

Yale Center for British

Art

Dining

Facilities/Utilities

ITS

Macmillan Center/Other

Academic Services

Other Administration (Includes

HR, Finance and Business Ops,

New Haven & State Affairs, Sr

Counselor, University General)

President/Provost/Secretary/

General Counsel

West Campus

Yale Health/EHS

Yale Press

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Table A-1Fiscal 2017 Operating Budget

Total University

A B C D E F

$ in millions FY14 Actual FY15 Actual FY16 Budget FY17 BudgetRevenue

Tuition, Room & Board - Gross 541 578 607 635 4.5% 27 Tuition Discount (251) (259) (269) (282) -5.0% (13)

Tuition, Room & Board – Net 291 318 339 352 4.1% 14 Grant & Contract Income 671 674 673 724 7.5% 50 Medical Services Income 700 787 836 881 5.4% 45 Gifts - Current Use 148 156 131 138 5.3% 7 Endowment Income 1,041 1,082 1,154 1,220 5.7% 66 Other Income 265 281 263 273 3.7% 10

Total External Revenue 3,116 3,298 3,395 3,587 5.7% 192

ExpensesFaculty Salaries 730 776 814 856 -5.2% (42) All Other Salaries 729 751 789 827 -4.8% (38) Employee Benefits 458 474 499 550 -10.2% (51)

Total Salaries & Benefits 1,917 2,001 2,102 2,233 -6.2% (131) Fellowships 90 91 102 104 -2.1% (2) Non-Salary Expenses 1,017 1,039 1,104 1,169 -5.9% (65) Interest/CRC/Other Amortization 327 371 354 373 -5.4% (19) Allocation of Central Services 444 459 511 500 2.2% 11 Allocation of Student Health & Other Costs 72 67 61 66 -8.9% (5)

Other Expenses 1,950 2,027 2,132 2,213 -3.8% (80)

Total Expenses - Before Internal Revenue 3,867 4,029 4,235 4,446 -5.0% (212)

Internal Revenue (787) (807) (873) (886) 1.6% 14

Total Expenses - Net of Internal Revenue 3,080 3,222 3,362 3,560 -5.9% (198)

Operating Results 36 76 33 27 (6)

Total Fund Transfers (24) (59) (5) (7) (2)

Net Results - Add to/(Use of) Balances 13 17 28 20 (7)

Better / (Worse) vs FY16 Budget

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Table A-2Fiscal 2017 Operating BudgetCentral Campus (See Page 9)

(Includes FAS, Athletics, Museums, Libraries, Other Administrative Units, University Unrestricted)A B C D E F



Tuition, Room & Board – Net 199 215 224 231 3.2% 7 Grant & Contract Income 132 133 134 127 -4.8% (6) Medical Services Income 33 48 42 44 5.5% 2 Gifts - Current Use 92 99 79 82 3.3% 3 Endowment Income 770 801 854 900 5.5% 47 Other Income 183 197 189 195 3.3% 6



Total Salaries & Benefits 861 875 901 957 -6.2% (56) Fellowships 51 51 56 58 -3.7% (2) Non-Salary Expenses 613 617 668 682 -2.1% (14) Interest/CRC/Other Amortization 240 278 259 270 -4.0% (10) Allocation of Central Services 251 259 303 290 4.3% 13 Allocation of Student Health & Other Costs 49 50 43 45 -4.9% (2)

Other Expenses 1,204 1,256 1,329 1,345 -1.2% (16)




Operating Results 53 94 88 78 (9)

Total Fund Transfers (83) (113) (64) (58) 6

Net Results - Add to/(Use of) Balances (30) (19) 24 21 (3)


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Professional & Arts Schools (See Page 9)

A B C D E F



Tuition, Room & Board – Net 73 82 92 97 5.7% 5 Grant & Contract Income 17 18 16 21 32.7% 5 Medical Services Income 1 1 1 1 -31.0% (0) Gifts - Current Use 33 34 29 33 10.3% 3 Endowment Income 167 175 185 196 6.4% 12 Other Income 23 25 28 30 6.9% 2

Total External Revenue 314 336 350 377 7.7% 27


Total Salaries & Benefits 180 193 209 226 -8.1% (17) Fellowships 8 8 10 11 -10.3% (1) Non-Salary Expenses 64 67 77 87 -13.5% (10) Interest/CRC/Other Amortization 25 31 30 32 -7.4% (2) Allocation of Central Services 57 60 62 63 -0.2% (0) Allocation of Student Health & Other Costs 6 6 6 6 1.2% 0

Other Expenses 160 173 185 199 -7.4% (14)

Total Expenses - Before Internal Revenue 340 365 395 425 -7.7% (31)


Total Expenses - Net of Internal Revenue 339 363 393 423 -7.5% (30)

Operating Results (26) (27) (43) (46) (3)

Total Fund Transfers 27 28 32 32 0

Net Results - Add to/(Use of) Balances 2 0 (11) (13) (2)


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School of Medicine

A B C D E F



Tuition, Room & Board – Net 18 21 23 25 7.1% 2 Grant & Contract Income 522 523 524 575 9.8% 51 Medical Services Income 665 738 793 836 5.4% 43 Gifts - Current Use 24 22 22 23 6.1% 1 Endowment Income 105 106 116 123 6.4% 7 Other Income 60 59 47 48 3.6% 2



Total Salaries & Benefits 877 933 992 1,050 -5.9% (58) Fellowships 31 32 36 35 2.6% 1 Non-Salary Expenses 340 354 360 400 -11.2% (40) Interest/CRC/Other Amortization 62 62 65 71 -10.1% (7) Allocation of Central Services 136 140 146 147 -1.1% (2) Allocation of Student Health & Other Costs 17 11 12 16 -27.7% (3)

Other Expenses 586 599 618 669 -8.2% (51)




Operating Results 10 9 (12) (5) 6

Total Fund Transfers 32 27 26 18 (8)

Net Results - Add to/(Use of) Balances 42 36 15 13 (2)


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Schools and Units (See Page 9)

A B C D E F G H I

$ in millionsSchool of Medicine

Professional Schools

Arts Schools

Faculty of Arts & Sciences Athletics

Museums & Libraries

Administrative Units

University Unrestricted

Total University

RevenueTuition, Room & Board - Gross 53 129 27 383 - 0 42 - 635 Tuition Discount (28) (39) (21) (192) - (0) (2) - (282)

Tuition, Room & Board – Net 25 90 6 191 - 0 40 - 352 Grant & Contract Income 575 21 0 118 - 2 7 - 724 Medical Services Income 836 1 - 0 - - 44 - 881 Gifts - Current Use 23 29 3 9 3 5 24 41 138 Endowment Income 123 143 53 436 12 148 109 195 1,220 Other Income 48 25 4 12 8 5 140 30 273

Total External Revenue 1,630 310 67 766 24 159 365 266 3,587

ExpensesFaculty Salaries 564 85 22 156 - 0 29 - 856 All Other Salaries 248 55 14 67 14 64 367 - 827 Employee Benefits 238 41 10 57 5 27 172 - 550

Total Salaries & Benefits 1,050 180 46 280 18 91 568 - 2,233 Fellowships 35 10 1 51 - 1 7 - 104 Non-Salary Expenses 400 70 17 87 12 85 498 - 1,169 Interest/CRC/Other Amortization 71 20 13 123 15 26 106 - 373 Allocation of Central Services 147 47 15 195 9 18 68 - 500 Allocation of Student Health & Other Costs 16 4 2 29 0 4 11 - 66

Other Expenses 669 150 48 486 36 134 690 - 2,213

Total Expenses - Before Internal Revenue 1,719 331 94 765 54 225 1,258 - 4,446

Internal Revenue (84) (2) (0) (3) (21) (28) (748) - (886)

Total Expenses - Net of Internal Revenue 1,635 329 94 762 33 197 510 - 3,560

Operating Results (5) (19) (27) 3 (9) (37) (144) 266 27

Total Fund Transfers 18 6 27 2 9 25 184 (278) (7)

Net Results - Add to/(Use of) Balances 13 (13) (0) 5 (0) (12) 39 (12) 20

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$ millions

ManagementManagement vs

GAAP View GAAPView Differences View Notes on Management vs GAAP View Differences

Tuition, Room & Board ‐ Gross 635 635 Tuition Discount (282) (3) (a) (285) (a) Loan forgiveness Tuition, Room & Board ‐ Net 352 (3) 350 (b) Operating pledge activity Grants & Contract Income 724 724 (c) Deferred investment income Medical Services 881 881 (d) Long-term liabilities-defined benefit plans

Gifts - Current Use 138 7 (b) 145 (e) Includes: Endowment Income 1,220 1,220 Long-term liabilities-AP and NH Promise (1) Other Income 273 - (c) 273 Energy hedges - Total External Income 3,587 4 3,592 Subtotal (1)

(f) Includes:Expenses Interest rate hedge (44) Faculty Salaries 856 856 Building depreciation in excess of CRC funding 12 All Other Salaries 827 1 (d) 828 Equipment depreciation in excess of funding 4 Employee Benefits 550 51 (d) 601 Software funding in excess of amortization (2) Total Salaries & Benefits 2,233 52 2,285 (30) Fellowships 104 104 (g) Eliminate other allocations against non-salary expenses Non‐Salary Expenses 1,169 (1) (e) 849 (h) Eliminate transfers

- (320) (g) Interest/CRC/Other Amortization 373 (30) (f) 343

Allocations 556 (556) (g) - Total Expenses - before Internal Revenue 4,436 (855) 3,581 Internal Revenue (876) 876 (g) - Total Expenses (Net of Internal Revenue) 3,560 21 3,581 Fund Transfers (7) 7 (h) 0 Total Net Results 20 (10) 11

Table A-6FY 17 Budgeted Operating Results-Management View vs GAAP

Revenue

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INDIRECT COST RECOVERIESLine #

1 Faculty of Arts & Sciences $ 31,316 $ 33,922 $ (2,605) (7.7%)2 School of Medicine 142,640 129,231 13,409 10.4%3 Other Professional Schools 3,941 2,682 1,259 47.0%

4 Other Departments 200 150 50 33.3%

5 Total Indirect Cost Recoveries $ 178,097 $ 165,985 $ 12,113 7.3%

DIRECT EXPENDITURES

6 Faculty of Arts & Sciences $ 88,958 $ 93,952 $ (4,994) (5.3%)7 School of Medicine 432,281 394,276 38,005 9.6%8 Other Professional Schools 17,526 13,495 4,031 29.9%

9 Other Departments 6,669 5,481 1,188 21.7%

10 Total Direct Expenditures $ 545,434 $ 507,204 $ 38,230 7.5%

11 TOTAL GRANTS & CONTRACTS $ 723,531 $ 673,189 $ 50,343 7.5%

Average Indirect Cost Recovery Rate

12 Faculty of Arts & Sciences 35% 36%13 School of Medicine 33% 33%14 Other Professional Schools 22% 20%15 Other Departments 3% 3%

TABLE B - 1FY17 Operating Budget: Grants & Contracts

Yale University($ in thousands)

FY17 Budget FY16 Budget FY17 Budget vs FY16 Budget Better/(Worse)

0.3%

FY17 Budget FY16 Budget FY17 Budget vs FY16 Budget Better/(Worse)

(0.9%)0.2%2.6%

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Line # Centrally-Supported

Self-Supported Total Centrally-

SupportedSelf-

Supported Total Centrally-Supported

Self-Supported Total

Operating Budget1 Current Use Unrestricted Gifts (GA) 47,139 15,498 62,637 45,821 13,436 59,257 1,318 2,062 3,380 2 Current Use Restricted Gifts (Non-GA) 37,825 37,178 75,003 36,559 34,840 71,399 1,266 2,338 3,604 3 Total 84,964 52,677 137,641 82,381 48,276 130,656 2,583 4,401 6,984

Non-Operating Budget*4 Facilities - Renovations Gifts 42,117 10,000 52,117 44,336 - 44,336 (2,219) 10,000 7,781 5 Facilities - New Buildings Gifts 984 - 984 955 8,277 9,232 29 (8,277) (8,248) 6 Endowment Gifts 138,220 27,259 165,479 134,194 44,902 179,096 4,026 (17,643) (13,617) 7 Total 181,321 37,259 218,579 179,485 53,179 232,663 1,836 (15,920) (14,084)

8 Total Contributions 266,285 89,935 356,220 261,865 101,454 363,320 4,419 (11,519) (7,100)

FY17 Budget FY16 Budget FY17 Budget vs. FY16 Budget Better/(Worse)

Table B-2FY17 Budget: Contributions (Gifts)


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TABLE B-3FY17 Budget: FTEs & Salaries


FY16 Budget

FY17 Budget

Increase/(Decrease)

Increase/(Decrease)% FY16 Budget FY17 Budget

Increase/(Decrease)

Increase/(Decrease)%

Faculty

1 Medical School 2,500 2,588 88 3.5% $ 505,403

$ 532,799

$ 27,396 5.4%

2 Professional Schools 335 369 34 10.3% 75,424 82,515 7,092 9.4%

3 Arts Schools 188 191 4 1.9% 21,350 21,710 360 1.7%

4 Faculty of Arts & Sciences 931 934 3 0.3% 136,809 141,013 4,204 3.1%

5 All Other 104 111 7 6.5% 24,766 25,887 1,121 4.5%

6 Total Faculty 4,058 4,193 135 3.3% $ 763,751

$ 803,924

$ 40,173 5.3%

7 Post Docs 1,070 1,123 53 5.0% $ 49,899

$ 51,953

$ 2,054 4.1%

Staff

8 Medical School 3,215 3,369 154 4.8% $ 225,997

$ 239,249

$ 13,252 5.9%

9 Professional Schools 589 619 30 5.2% 45,514 49,223 3,709 8.1%

10 Arts Schools 139 138 (1) (0.7%) 9,751 10,017 267 2.7%

11 Professional & Arts Schools 728 758 29 4.0% 55,265 59,240 3,976 7.2%

12 Faculty of Arts & Sciences 536 552 16 3.0% 37,995 39,835 1,839 4.8%

13 Support Units 951 954 3 0.3% 70,262 73,006 2,745 3.9%

14 Administrative Units 3,893 3,922 29 0.7% 341,929 355,693 13,764 4.0%

15 Central Campus 5,380 5,428 48 0.9% 450,186 468,534 18,348 4.1%

16 Total Staff * 9,323 9,555 232 2.5% $ 731,448

$ 767,024

$ 35,576 4.9%

17 Total Employees * 14,451 14,870 420 2.9% $ 1,545,098

$ 1,622,901

$ 77,802 5.0%

* Includes M&P, C&T, S&M, Security & Police; Excludes Students and Casuals

Note:

FTEs Salaries

Line #

Faculty & Post Doc budget salaries = faculty and post doc salary budget dollars and the FTEs that make up those budget dollars. Staff budget salaries = M&P, C&T and S&M salary budget dollars and the FTEs that make up those budget dollars.

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Authorizations FY17 FY17 FY18 FY19 FY20 FY21 FY17-21

Line # Budget Budget Budget Plan Plan Plan Plan Plan

Central1 Major Projects 337 452 379 228 256 269 290 1,422

2 Programmatic Renovations 20 20 20 20 20 20 20 100

3 Capital Maintenance 20 20 20 20 20 20 20 100

4 Utilities 8 8 8 12 12 8 8 47

5 System & Equipment 25 25 33 25 25 25 25 133

6 Property Acquisitions 3 3 3 3 3 3 3 15

7 Medicine 58 40 43 33 23 22 22 143

8 Total 471 568 506 340 359 367 388 1,960

9 Non Capitalized Costs and Inflation 3 3 3 4 9 12 13 40

10 Facilities Repair and Replacement Fund and Capitalized Interest 16 16 22 19 18 16 15 91

11 Adjusted Total 490 588 531 363 385 395 416 2,091

FY16

Table C-1Approved Capital Budget - Fiscal Year 2017 (FY17)

Total University($ Millions)

Disbursements

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APPENDIX:

FY17 Budget Book Glossary of Terms

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Appendix

YALE UNIVERSITY

FY17 BUDGET BOOK

GLOSSARY OF TERMS Sources of Activity: General Appropriations (GA): General Appropriations revenues and expenses represent unrestricted inflows and outflows to the University. The primary categories of revenue in GA are tuition, room and board, facilities and administrative (F&A) recoveries on sponsored agreements, unrestricted gifts and endowment income and many categories of other income such as athletic and theater ticket sales, parking income and museum shop sales. Non GA: This category includes all other sources groups – Endowment, Sponsored Agreements, Gifts and Special Programs. Endowment: This category records income and expenses supported by income from the University’s endowment. The endowment is a set of permanently restricted gifts from donors and university funds that are invested to earn income to provide permanent support to university activities. Sponsored Agreements: This source of activity represents expenses incurred based on funding awarded by federal and state agencies as well as private foundations and corporations. Included in this category are clinical drug trials in the Medical School. Gifts: The University receives gifts in three categories: endowment, current use and building gifts. Endowment gifts are generally permanently restricted by a donor to fund a specific activity. Current use gifts are usually restricted to a purpose by a donor but are intended to be spent in 12 to 36 months after receipt of the gift. Building gifts are given in anticipation of funding a capital project such as a new building or renovation of a building. These gifts are usually held for long periods of time as fundraising efforts for capital projects often take five or more years. The gifts activity reported in the operating budget are current use gifts. Endowment income distributed on endowment gifts is included in endowment income. Special Programs: This source of activity consists primarily of medical services activities in the Medical School. Direct patient care as well as services provided to Yale-New Haven Hospital and other area hospitals is recorded here. Special Programs also includes start-up costs for research faculty in FAS and the Medical School as well as funding miscellaneous programs that are not appropriately funded in GA.

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Appendix

Revenue Categories: Tuition, Room & Board: These revenue items are the charges to undergraduate and graduate students for education, living and food costs (if they participate in all of these categories). Most graduate students live off campus and do not have board contracts with the Dining Halls. The “term bill”, the combination of these three items for Yale College students, is approved by the Corporation in the spring of each year. Tuition in the professional and self-support schools is determined by the respective deans in consultation with the Provost. Tuition Discount: This reduction to revenue represents scholarships and other financial aid that results in a reduction of the tuition received from students. Grants & Contracts Income: This revenue category includes grants and contracts income for the entire University as well as clinical drug trials in the School of Medicine. The revenue earned in this category is the result of spending “awarded” dollars from the sponsor (federal and state governments, foundations and other donors), and being reimbursed for both direct and indirect expenses related to the research and teaching supported by the award. Medical Services Income: This category is used by the Medical School, the Nursing School and Yale Health to show revenue earned from direct patient care. This category also includes revenue from services provided to Yale-New Haven Hospital and other area hospitals by Medical School faculty. Gifts – Current Use: These are current use gifts of cash contributions and pledges receivable. Gifts of property or other assets for current use are generally sold, subject to donor restrictions, and converted to cash for University use. Contributions are reported net of the 12% indirect cost recovery to offset a portion of the full costs associated with the program funded by the gift. Endowment Income: This category represents the annual distribution from the endowment based on the University’s spending rule. A large portion of the endowment income received each year is unrestricted for University purposes. The costs supported by this income are budgeted and incurred in GA with a corresponding entry from the endowment to transfer the income to GA. Recovered Income is endowment income restricted to a specific purpose, such as professorship support, financial aid support or building costs. The University incurs the costs in GA and “recovers” the endowment income to pay for those costs by transferring the income to GA. Unrestricted and recovered endowment income distribution is reflected as income in GA. Other Income: This revenue category includes interest earned on University funds, income earned on real estate investments and endowment management income to cover the operating costs of the Investments Office. This category also includes ticket sales, journal sales, museum gift shop activity, parking revenue from outside groups, professional

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Appendix

services contract revenue and other miscellaneous revenue not assignable to the other categories. Expense Categories: Faculty Salaries: This expense category represents the costs of ladder and non-ladder faculty. Ladder faculty are faculty on the tenure track such as assistant, associate and full professors. Non-ladder faculty includes lecturers, adjuncts, clinicians and other teaching staff and post-doctoral associates. All Other Salaries: This category represents the salaries and wages for managerial and professional staff, clerical and technical staff, service and maintenance staff, casual employees, other compensation adjustments for staff and student wages. Employee Benefits: This category shows the cost of fringe benefits incurred by the University in support of its employees. Fringe benefits are assessed at the employee level based on the category of employee. Fellowships: This category shows the cost of fellowship and stipends associated with undergraduate, graduate and PhD students. These costs do not offset tuition revenue as they are to cover expenses outside of Yale University such as living expenses or programs expenses for study abroad. Non-Salary Expenses: This broad category of costs includes external utilities, library acquisitions, professional fees, travel, medical services and materials costs (such as food for the Dining Halls), minor building repairs and maintenance, printing and supplies. Interest/CRC/Other Amortization: This category reflects the internal financing of capital projects through amortized “loans”, University debt financing costs and the interest paid to bond-holders as well as funds set aside for capital maintenance known as CRC. As a means of sustainable funding of capital repair and replacement, operating accounts are charged CRC for capital replacement costs (replacement value depreciation). The CRC charge is on average 2.54% of the replacement value of the University’s buildings and is used to fund renovations of existing facilities. Included in this expense line is building amortization that is “recycled” in the operating budget to help pay for renovations of buildings. Allocation of Central Services: This category represents the utilities and building services costs charged to buildings across the University, in addition to the university services costs charged to schools and units for a range of centrally provided administrative and academic support services. Included in building services costs are: custodial services, fire marshal, buildings and grounds, and physical plant costs. Allocation of Student Health & Other Costs: This category shows the total cost allocations across the University. Many units within the University provide services to

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Appendix

other units who are charged overhead for the expenses incurred. The costs for units providing the service are generally realized as Non-Salary Expenses. Internal Revenue: This category shows the total revenue from internally provided services and the expenses charged through the Allocation of Central Services and the Allocation of Student Health & Other Costs. Total Fund Transfers: This represents Transfers and GA Support. The University must maintain separate accounts to assure that specific donor and grantor restrictions are met. The transfer from one account to another is permitted, as long as it is consistent with these restrictions, to fund activities within a department or within the University. The net activity in this line represents funds moving to or from the University’s non-operating funds such as endowment principal, building gifts and investment in plant. GA Support is the amount of University support required for a centrally-supported unit to achieve a zero net results based on the budgeted revenues and expenses approved by the Office of the Provost. Net Results – Add to/(Use of) Balances: This line shows the expected increase or decrease in non-GA fund balances for each unit in the University. Changes in Accounting: The University makes changes in accounting to reflect changes in areas of responsibility and to provide more meaningful information to support decisions. Revenues and/or expenses for a given activity may be reflected in a different planning unit or on a different line in the statement of activities from year to year. In cases where the amounts are significant and it is possible to identify the equivalent activity in the prior years, the prior year amounts have been restated for comparative purposes. It is not possible to restate all of these changes. Questions regarding trends in the data should be directed to the Office of Financial Planning & Analysis for clarification.

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For questions, please contact the Financial Planning and Analysis Department at [email protected].

Documents

Budget Book - Yale University · Budget Book Fiscal Year 2017 For Yale Faculty, Staff, and Students only