2007 Reaffirmation Teams
2.11.1 - 2007 Reaffirmation Teams
The institution has a sound financial base and demonstrated financial stability to support the mission of the institution and the scope of its programs and services. The member institution provides the following financial statements: (1) an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a systemwide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate audit (or Standard Review Report) guide; (2) a statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributable to operations for the most recent year; and, (3) an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board. Audit requirements for applicant institutions may be found in the Commission policy entitled "Accreditation Procedures for Applicant Institutions.
The University of Texas at Dallas (UT Dallas) will submit its Standard Review Report to the SACS Commission on Colleges once the Texas State Auditor’s Office has completed its audit and prior to the SACS onsite visit. The following schedule has been established to bring the university into full compliance with this principle: Annual Financial Review (AFR) completed and sent to the University of Texas System for review-October 5, 2007; AFR finalized-November 15, 2007; internal audit work completed-December 14, 2007; draft review report released to UT Dallas-January 18, 2008; and submission of audit and management report to SACS-January 21, 2008. UT Dallas is in compliance with all other aspects of Principle 2.11.1.
UT Dallas has a sound financial base and demonstrated financial stability to support the mission  of the university and the scope of its programs and services.Institutional Audit
The fiscal year 2007 audit requirement is fulfilled by a Standard Review Report performed by the Texas State Auditor’s Office . The fiscal year 2007 Standard Review Report is anticipated to be completed by January, 2008.
The Texas State Auditor’s Office provides audit services to Texas state agencies, including annual audits of state financial statements; as a state agency, UT Dallas is included in those statewide audits . In the spirit of the Sarbanes-Oxley Act, The University of Texas System (UT System) Board of Regents decided to have an independent third party audit  of the system-wide financial statements for fiscal years 2005  and 2006 . The board selected Deloitte & Touche LLP as the external auditor, and the Office of Internal Audits of UT Dallas’ Office of Audit and Compliance  performed the audit work as directed by Deloitte & Touche. The internal audit function is outlined in the audit charter located on the internal audit website . The audit function reports to the president, with additional reporting responsibilities to the director of the UT System Audit Office and to the UT System Audit, Compliance, and Management Review Committee of the Board of Regents. The UT Dallas president chairs the Institutional Audit and Compliance Committee , and the committee meets quarterly to discuss audit, financial, and compliance issues.Financial Position and Reporting
The financial history of UT Dallas demonstrates financial stability. The overall worth of UT Dallas has risen over the past several fiscal years as indicated by the positive trend in the total net assets  and the unrestricted net assets without plant. During fiscal year 2006, the overall increase in the net assets was 12.72%, with the biggest increase in capital assets at 27%, followed by a 4% increase in restricted expendable net assets, 3% increase in restricted non-expendable net assets, and a 1% increase in unrestricted expendable net assets without plant .
The vice president for business affairs designated the associate vice president of finance and controller as the financial reporting officer who is responsible for the integrity of the Annual Financial Report (AFR) and for the establishment of effective internal controls for its preparation. UT Dallas’ AFR’s for fiscal years 2004   , 2005   , and 2006    have been prepared in accordance with Government Accounting Standards Board requirements  and in accordance with the UT System Policy on the Annual Financial Report, UTS142.1 . The AFR is submitted yearly during the month of October to UT System’s Financial Reporting Division of the Office of the Controller, where it is consolidated with the annual financial reports from other UT System institutions . The UT System’s AFR is then consolidated into the State of Texas Comprehensive Annual Financial Report . A statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributable to operations, is also included in the AFR    . As part of the annual financial reporting process, each UT System institution prepares an Analysis of Financial Condition for the reported year   . The Analysis of Financial Condition includes key financial ratios which provide UT Dallas management, the Board of Regents, and UT System administrators information about financial stability of each component institution and provide financial data to support the decision making process and strategic planning initiatives.
UT Dallas’ strong composite financial index (CFI), a four-dimensional measurement of its financial health, demonstrates its ability to “focus resources to compete in future state” . UT Dallas’ operating expense coverage ratios, which measure its ability to cover future operating expenses with available year-end balances, were 2.7, 2.9, and 2.6 months as of the end of 2004, 2005 and 2006 respectively. The ratios are above the UT System’s standard of 2 months. UT Dallas’ annual operating margin ratios were negative during two of the three preceding years due to management’s decision to draw down its available resources for strategic purposes, one of which was to minimize increases to student tuition and fees. More detailed discussion of financial ratios and related documentation is available in the response to Principle 3.10.1 .Tuition Discounting
In compliance with GAAP, UT Dallas discounts its tuition to qualified students using a UT System model that is based on the National Association of College and University Business Officers Advisory Report 2005 and The University of Texas at Austin model .Annual Budget
Impacts on the budget development process include:
- levels of state appropriations,
- changes in tuition and fees,
- enrollment projections,
- institutional financial condition,
- The UT System Board of Regents requirements  ,
- authorizing tuition and fee statutes, and
- priorities defined through the UT Dallas Strategic Plan .
The budget development process begins in the fall of each year. The assistant vice president for student affairs and the associate vice president for budget and resource planning develop preliminary revenue estimates for auxiliary student fees , based on preliminary enrollment estimates provided by the Office of Strategic Planning and Analysis (OSPA) enrollment estimates page  .
The Auxiliary Student Fee Advisory Committee develops recommendations for budget activities funded by the:
- student services fee
- medical services fee
- student activity center fee
- student union fee
During the fall of odd-numbered years, the UT Dallas Tuition and Fee Policy Review Committee convenes, led by the executive vice president and provost (provost), to evaluate and make recommendations for changes to the Consolidated Tuition and Fee Plan. The Recommendations of the UT Dallas Tuition and Fee Policy Review Committee  states, “The foundations of this process include consideration of the University’s strategic goals, analysis of the bedrock financial requirements for maintaining current progress toward those goals, and review of how costs of university operations can be constrained or reduced in order to minimize the required increases in tuition and fees.” Draft proposals for 2008-2010 (FY 2009 and FY 2010) tuition and fee proposals are due to the UT System Office of Academic Affairs no later than November 1, 2007 . UT System principles and guidelines for setting tuition and fee rates (i.e., that the proposals be created through consultation, that the process be open and transparent, that the proposals be comprehensive and aligned with the university’s strategic plan, and that the institution keep the charges as low as possible) steer the process .
As part of the budget development process, early each spring semester the associate vice president for budget and resource planning, with inputs from the president and his executive staff (provost, vice president for student affairs, and vice president for business affairs) and in consultation with the associate vice president for finance, prepares a Budget Financial Planning Model  . The president and executive staff assess the university’s current financial status and review estimated revenues available for the coming year. Revenue estimates (e.g., the Tuition & Fee Revenue Projections Model ) are based on:
- anticipated state appropriations,
- tuition and fee recommendations of the Tuition and Fee Policy Review Committee, and
- estimated nondiscretionary institutional costs such as changes in fringe benefits costs, debt service requirements, utilities, and property insurance costs.
During the spring semester, each budgetary unit develops a budget presentation addressing accomplishments of the previous year and priorities of the coming year with related funding requirements  . Beginning in fiscal year 2007, the university began using a web-based assessment tool, AT6, to document planning activities. Budget requests for FY2008 require each budgetary unit to submit an Annual Report for Institutional Effectiveness and Budgeting .
The president and the executive staff evaluate the priority requests of each budgetary unit, in the context of the strategic goals of the university as outlined in UT Dallas’ Strategic Plan  and annual compacts  . Decisions are made for new initiative funding during the coming budget year .
Following final allocation, the associate vice president for budget and resource planning directs the process required to compile the individual unit budgets, consistent with the allocations identified by the president and his executive staff. The budget information is sent to the UT System Chancellor’s Office   .
The UT System Chancellor’s Office, including the Office of the Executive Vice Chancellor for Academic Affairs and the Office of the Executive Vice Chancellor for Business Affairs, reviews the budget document to ensure that the budget is fiscally responsible and consistent with the UT System goals and priorities. The budget review and approval process includes the following:
- Approval by the UT System Board of Regents: The Fiscal Year 2007 Budget Preparation Policies and Calendar for budget operations ,
- Major Goals/Policy Videoconference: UT Dallas President, assisted by staff, presents budget summary to UT System Administration ,
- Review of the Operating Budget document by account by UT System staff; includes an assessment of reasonableness of revenue and expenditure estimates, as well as evaluation of appropriate use of fund balances, and
- Operating Budget Highlights  and Variance Analysis  reviewed by UT System staff.
The annual operating budget is reviewed and approved by the UT System Board of Regents. The UT System Board of Regents approved the fiscal year 2007 operating budget at the August 9-10, 2006 meeting . The FY 08 budget will be approved at the August 22-23, 2007 Board of Regents meeting.
The annual budget is administered in compliance with a Budget/Human Resources Policy . The budget is reviewed and revised consistent with the direction of the president and executive staff as well as related state and UT System requirements. Budget changes that require approval of the UT System Board of Regents are outlined in the UT System Budget Rules and Procedures . The president has delegated authority for other budget changes that are internally managed through an automated budget system; requested changes require appropriate review and approval through electronic routing.
In an effort to promote transparency and facilitate more informed decisions, a Budget and Finance Committee  was initiated during fiscal year 2007 to provide for a quarterly financial and budget review including but not limited to:
- current financial status,
- key financial performance measures, and
- budget status and projects in need of funding  .
As part of the meetings, information presented is used to set priorities for project funding, determine changes needed in the university’s budget or finance policies, and plan for subsequent fiscal year budgets  .
In February 2007, the university’s budget officer’s title was changed from associate vice president for budget to associate vice president for budget and resource planning, providing further emphasis of the critical link between budget and planning .