University of North Florida
Board of Trustees
Finance and Audit Committee

  • Budget Workshop
  • Meeting
May 19, 2005
University Center at 8:30 a.m.

Minutes

Committee members present

Edythe Abdullah, O’Neal Douglas, Tom Foran, Wanyonyi Kendrick, Kevin Twomey 

Committee members absent

Steve Halverson 

Other trustees present

Judith Solano, Bruce Taylor

 

Chair Twomey called the meeting to order. He said the meeting would be in two parts, business as usual followed by a budget workshop. He asked for a motion to approve the minutes. The motion was offered by Trustee Douglas, seconded by Trustee Kendrick, and approved unanimously.

Housing Rates

Chair Twomey asked Vice President Gonzalez to discuss increases to the housing rates. Dr. Gonzalez said the University was requesting approval of the housing rates for 2006-2007. He indicated the breakdown for the different housing complexes; supplemental charges, which included a new charge for storage; and history of increases in the trustees’ packets. He said this year the University was asking for a 3.8 percent increase.

Chair Twomey asked about the process for discussion with the various constituents and whether there was any disagreement with the increase. Vice President Gonzalez replied that his office had developed a calendar to guide the University through the process. A market analysis had been conducted to make sure that the cost of University housing would be competitive with the local market and with other universities. He had met with student government and reviewed and presented the increases to the Auxiliary Oversight Committee and then to the president for approval prior to bringing the recommendations to the Finance and Audit Committee. Chair Twomey asked if there had been any significant controversy or if Dr. Gonzalez felt there was consensus. Dr. Gonzalez believed there was consensus and Mr. Foran, the new president of Student Government, confirmed that the student body was in agreement with the changes.

 

Trustee Abdullah asked if the changes were covered by financial aid. Dr. Gonzalez said his office worked very closely with both the Financial Aid Office and the Office of Enrollment Services to ensure that such changes were always covered by financial aid; these two offices were at the table from the beginning of deliberations. Trustee Taylor asked how UNF tracked for housing costs when compared to other universities nationally. Dr. Gonzalez assured him that the University’s fees were competitive. President Delaney added that housing at UNF was usually better than housing at other institutions. Mr. Foran agreed.

Trustee Douglas motioned to recommend approval of the changes. Vice Chair Kendrick seconded the motion and the committee approved it unanimously.

Charter and Responsibilities for the Office of Internal Auditing

Dr. Khan said that the committee had offered suggestions about strengthening the charter and responsibilities for the FAC during the last meeting. He went over the suggested changes, highlighted in blue in the revised documents. He noted the change to the name of the office, from Office of the Inspector General to the Office of Internal Auditing, remarking that the new name was more user friendly. Chair Twomey said the change was in line with current business practices. Dr. Khan added that it was also in line with practices at other universities.

 

In terms of mission, Dr. Khan said Internal Auditing was responsible to support the president, vice presidents, and the BOT. He said that for reporting University administration believed it would be better to have the president select the director of Internal Auditing in consultation with or with the approval of the FAC. This practice was also consistent with practices at other universities and helped to assure the independence of the office.

 

Trustee Kendrick asked about some of the processes used to do risk assessment within the University. Dr. Khan said he thought the document captured all the points she made in the previous meeting. She said the most important thing was to keep the president and the BOT through the FAC apprised of any activities that might have a negative impact on University finances. Dr. Khan noted that professional standards were an important requirement and were the essential standards the University had to abide by, adding that the University would have a code of ethics as well.

 

There was some discussion about the need for the committee chair and at least some members to have a financial background in order to serve on the committee. Chair Twomey said he was concerned that if the requirement was defined too strictly it would be impossible to meet. President Delaney agreed that it could be difficult to meet the requirement; companies were able to recruit board members whereas the University board members weree appointed. Trustee Solano recommended using the same language from Vice President Shuman’s document in the FAC responsibilities in order to be consistent. Chair Twomey observed that the document did say “when possible,” which allowed some leeway in application of the requirement. Asking about other universities, Trustee Kendrick wished to know if they had incorporated documents similar to the one outlining the FAC responsibilities. Dr. Khan replied that FSU had adopted a similar document and said he would supply it in response to Ms. Kendrick’s request. Vice President Shuman noted that UNF had not examined practices from other SUS universities in particular, going by what the committee and the board wanted, which was best practices. These were taken from a variety of sources. Chair Twomey said he felt the document was soft enough in its statements of requirements to allow the meeting of the requirements.

 

Remarking that Sarbanes-Oxley suggested periodic updating and training for board members, President Delaney asked that an item to that effect be added for BOT members who were interested in pursuing it. Dr. Khan said he would include it. Chair Twomey mentioned the possibility of providing the training in house.

 

Trustee Abdullah moved to recommend the documents with the changes. Trustee Kendrick seconded the motion and it was approved unanimously by the committee.

Recommendations for Improved Internal Controls

Regarding improved internal controls, Vice President Shuman said that after the last meeting a group from her office developed a set of best practices for non-profits culled from various places including Sarbanes-Oxley, taking what made sense for UNF as a university. She said the state Auditor General’s Office currently audited the financials annually and performed an operational audit every two years. The University had DSO oversight through the DSO auditors, and internal auditing on an ongoing basis. Tax Form 990 was employed and the president signed a management letter relative to management’s responsibility.

 

Chair Twomey said that while top management for his company had been signing management letters forever, the company had begun having letters signed for upper management as well. Ms. Shuman said the University might want to have them from the provost and vice presidents as well. Chair Twomey said he thought that was fine, when someone was asked to sign a management letter, it was only for things the person could reasonably answer for; for example, the provost would not be asked to make a statement about finances.

 

Continuing, Ms. Shuman said the University was in the process of proposing a code of ethics. Trustee Solano asked if the code of ethics would include faculty. Dr. Khan said it would and that the intention was to vet it through faculty. Trustee Solano said she would like to be involved. Ms. Shuman said that was fine and that the code was still in the drafting process and then would go out to all the associations. Trustee Kendrick asked if training or sign-off would be required on an annual basis. Dr. Khan said that had not been decided but could be done. University administration had talked about having a national expert talk or having sign-off every couple of years. Trustee Douglas said this was something the FAC could also do, suggesting that all members be required to attend a training or refresher of some sort every year, perhaps a half-day session. Chair Twomey recommended the refresher/training be provided online.

 

Vice President Shuman said the University was also looking at what would make sense to expand in regard to background checks. She said more work was still needed on conflicts of interest and ethics. Chair Twomey asked if the FAC needed to adopt the improved internal controls. Ms. Shuman replied that it was for information only, to let trustees know where the University was in the process of developing more stringent internal controls. In response to a question from Vice Chair Kendrick, Ms. Shuman said a schedule for retention and destruction of sensitive records was in place, though it was not posted online as the guidelines changed so often. Trustee Kendrick asked about the retention of emails. President Delaney responded that emails only needed to be kept if they contained substantive business, but it was up to the discretion of the person looking at them. Dr. Serwatka added that all emails were backed up, but it was much harder to locate a specific email that way.

Treasurer’s Report

As of April 30, 2005, there was $1.5 million more in investments over cash in the bank. In response to a question from Chair Twomey, she said the interest was allocated based on the amount of cash per fund.

She said her office was projecting about $2.5 million in interest, some of which would flow into E & G. Trustee Douglas asked about the bonds the University had invested in and Ms. Shuman replied that they were variable bonds. She had provided the information to show that the University was receiving returns from investments more than the University was paying in bonds for parking and housing.

Quarterly Budget Report

Regarding the budget report, Vice President Shuman said it looked a little different. She said Trustee Halverson had been asking for projections reflecting where the different units were going to be at the end of the year. She said the units should be at 83 percent of their budgets at the end of April. She noted that the Academic Affairs budget would be at more than 83 percent as the colleges had finished the spring semester and were, in essence, done for the year budgetarily as funding for summer had not yet been allocated. She said the projected amounts would change in the next couple of months because of things like collective bargaining with the faculty union, which would change the reserves. President Delaney added that the University had reserved money in case some of the dollars for that agreement, such as faculty pay raises, were retroactive to the previous fiscal year. He said that the philosophical differences between the union and administration looked deep at this point so the money would probably remain reserved for a little longer. Vice President Shuman said the University did not expect any budgetary issues. Responding to a question from President Delaney, the committee said they liked the format for the report.

Florida Bright Futures Audit

Vice President Shuman said the University did not receive any comments, there were no findings, regarding Florida Bright Futures so no action was required; the report was for informational purposes only.

Expansion of the Fine Arts Center to House the Photo Lab

Before discussing the photo lab, Ms. Shuman noted that the state Auditor General came to UNF every two years for an operational audit. She said the University was currently in the midst of such an audit.

Though nothing material had yet been found, the auditor had mentioned reporting to the BOT. While the board had always received the list of capital outlay projects funded by PECO, CITF, Courtelis, and Auxiliary Funds, the information had not been provided in a consolidated manner. The auditors had indicated that an annual capital outlay budget should be provided to the board. She said a complete outlay budget for 2005-2006 would be provided at the June 6 workshop.

 

Vice Chair Shuman said the photo lab item had been discussed at previous meetings and this item was to keep trustees up to date. The photo lab was currently housed in Building 3 but the Office of Environmental Health and Safety recommended that it be moved as soon as possible. Money had originally been slated for Building 3 but some of it had been moved to the Library project. The amount left was not been enough to do what was necessary at this time. The decision now was that the best alternative was to add the lab to the Fine Arts Center complex as a separate building.

 

Trustee Douglas moved to recommend the building addition and Trustee Kendrick seconded the motion. The recommendation was approved unanimously and the committee’s business was concluded.

Budget Workshop

President Delaney said the PowerPoint presentation would cover a couple different pieces: reallocations and how the University proposed to allocate new moneys from the Legislature in accordance with the strategic plan. Trustee Douglas asked for President Delaney’s overall evaluation and objectives for the proposed budget. President Delaney responded that he was very happy with the budget and thought it would do much to help meet goals for quality faculty and students and for the University’s physical plant. He said that of ten elements of the strategic plan, the University would be able to advance on all of them. In reply to another question from Trustee Douglas, he said he did not foresee glaring weaknesses in the budget.

 

Chair Twomey asked Vice President Shuman to begin the presentation. She said the budget allowed UNF to fund some new initiatives and to continue initiatives from the previous year. The University had moved to have justification of each unit’s base budgets, resulting in reallocations within the institution. Some of the reallocations were from the vacancy pool. Departments were asked to consider what they really needed. As a result, positions were reclassified or eliminated to save money or redirect it toward other goals and other positions were changed/and or moved from one department to another based on student ratios, as in the case of advisors, or needs of the department. A new department, the One Stop Shop Student Services Center, was created under Enrollment Services to better meet student needs, taking staff positions from each unit of that department.


Under Information Technology Services’ budget submission, monies were reallocated to pay for new software licenses, expanded coverage of virus protection systems, licenses for on-demand client software, and from training in one unit to training for two other units with limited training budgets. Forty-five thousand was redirected from the University Center E & G budget to other departments and the President’s Office reduced its budget, reallocating $16,452 of its operating expense funds to support two administrative units: the General Counsel’s office, to support additional operating expenses and improved technology for data storage and retrieval, and the Office of the Internal Auditor.

 

In new resources, E & G for 2004-2005 was over $98 million and annualization of health and retirement benefits came to $514,736, for a total of $98,611,596 in the 2005/2005 E & G allocation. For new allocations, enrollment growth was funded at $4,854,267; a tuition increase of 5% came to $1,239,311; for changes in the in-state/out-of-state mix and 2004-2005 discretionary fees, $288,579 was allocated; and $537,310 was allotted for an adjustment for plant operations and maintenance for the Library expansion. The total for new funding is $6,919,467; therefore the 2005/2006 E & G allocation is $105,531,063. Ms. Shuman noted that the Legislature had authorized a tuition increase of up to 5 percent for in-state undergraduate with tuition flexibility on graduate and out-of-state. The budget was based on only the 5 percent increase, as discussed in previous meetings.

 

Vice President Shuman spoke of the funds held in reserve. Three percent of the budget was held back for possible enrollment shortfall or state call back. Funds were also reserved for employee termination costs, tuition waiver costs, utilities and major equipment, and for possible retroactive increases to faculty salaries upon the successful conclusion of collective bargaining.

 

Monies were allotted for student learning initiatives such as transformational activities including international travel, service learning, and research; maintaining reasonable faculty student ratios by adding thirty-five new faculty positions; and to provide funding for costs associated with the Fine Arts Center for E & G related events such as recitals. In response to question from Trustees Abdullah about funding events at the Fine Arts Center, President Delaney said that student groups felt they couldn’t afford the facility so the line had been created to offset the cost to encourage student access and make sure the facility would not go unused.

 

Ms. Shuman went over the new FTE assignments and new faculty assigned to each college to support the new FTE and keep student to faculty ratios down. Chair Twomey asked for a column showing the percentage of increase for FTE assignments as well as the total amount allotted; he gave the College of Health as an example, stating that it had received the largest increase. Vice President Shuman also spoke of changes to the student to advisor ratio. In addition to two positions that were reallocated, five more advisors were added to even out the student to advisor ratios – particularly for advising for freshmen and sophomores, the Coggin College of Business, Arts and Sciences, and the College of Health.


Regarding flagship programs, President Delaney said each college had nominated possible programs along with the estimated cost and plans for how to establish the programs nationally. President Delaney expected to have decided upon two of the programs within the next few weeks. Vice President Shuman, replying to Trustee Taylor, said that $1, 250,000 of these funds would be recurring, including $1 million allocated from the previous year.

 

In discussing research and scholarship, Ms. Shuman said she was proud to say that the University was fully operational on the Florida LambdaRail. To support it, $150,000 was included in the budget. She said Sponsored Research would contribute 6 percent of the administration overhead fee to help support the LambdaRail. Monies had been put forward for the Environmental Center for new environmental programming, and funding had also been set aside for the nurse anesthetist program, nursing faculty, and for a coordinator for alumni events and stewardship.

 

A number of initiatives had been funded for students, including merit scholarships, increases in financial aid, extended Library hours, a parents’ program coordinator, a disability resource position, expanded wireless access, and implementation of the new One Stop Shop. Initiatives had also been enacted toward the strategic plan goal of quality faculty. These included salary increases, most likely based on merit, above the state provided 3.6 percent, transportation subsidy, and faculty international grants. Funding toward the goal of quality staff included the transportation subsidy and most likely merit-based salary increases above the 3.6 percent expected from the state.

 

Vice President Shuman went over additional funding for the master plan. Four more groundskeepers were to be hired, as well as one custodial worker to help improve the look of the grounds. Monies were also set aside for campus improvements. Renovations were planned for the Robinson Theatre including renovations to allow films to be shown there. Also as part of the master plan, funding was made available for information technology security measures, technology replacement, and two C-tech positions, as well as an increase in utilities.

 

The University was funding a new position in Institutional Advancement and an associate provost to conduct program reviews and assess measures for the strategic plan.

 

Trustee Douglas asked if Vice President Allaire’s office could undertake obtaining funding for specific tasks such as more advisors, etc. Both Vice Chair Kendrick and Trustee Abdullah asked about the quality of advisors and ensuring the qualifications of those chosen. Provost Giordano confirmed that this was of high concern for students, who wanted a nurturing relationship from advisors as well as appropriate advice.

Trustee Foran noted that there had been a great deal of improvement in the two years since his arrival at UNF.

 

Chair Twomey complimented Vice President Shuman on the budget presentation, stating that there had been a dramatic leap forward in the process both this year and the year before. Trustee Abdullah said she was concerned about the lack of students interested in careers in education. She said she would like to discuss ways to involve students as well as attempts to talk with the community about the problem.

President Delaney observed that the issue would not show up in the budget, but said it was a statewide discussion. He said the BOG had asked the individual universities how to address the problem. He noted that universities had no control over the pay scale for teachers, which contributed to the lack of student interest. Trustee Abdullah spoke of the possibility of sending recruiters to high schools or offering grants, etc., to interest students in the high need area.

 

There was some discussion regarding merit versus need based scholarships. President Delaney said he would bring the figures to show where the university was in relation to both types of scholarships.

 

Vice President Shuman presented a schedule of budgets for the auxiliary funds. She explained the need for specific reserves, some of which was earmarked for specific projects. Chair Twomey said he would like to see further explanation of the reserves.

 

The group also talked about the difference between student advising, provided by advisors, and mentoring, which was provided by faculty. Dr. Serwatka passed out the latest version of the strategic plan, stating that the Board would discuss the plan at the June BOT meeting. He asked the committee members to bring their suggestions or comments to that meeting. Vice President Shuman said she wanted to thank all the vice presidents and their staff as well as Ricky Arjune for putting together the information for the presentation. Chair Twomey complimented them on the work and adjourned the meeting.