Negotiations Recap for May 7, 2012
This recap details the fourth bargaining session held between the UW and the AFT.
UWEO Financial Presentation
UWEO delivered a presentation outlining the financial structure of IELP, organized around questions asked previously by AFT. The presentation detailed the following key topics:
- Budget Numbers
- UWEO explained that information in the UW Financial Accounting System is organized by budget number.
- This system maintains lists of revenues and expenses for each budget number, but does not capture the budget numbers on campus or within UWEO that receive money that is deducted from IELP revenues in the form of fees and overhead.
- Revenue and Expenditure
- UWEO demonstrated how to interpret an IELP Revenue and Expenditure statement, using IELP’s financials for fiscal year 2011 as an example.
- The report showed that IELP brought in nearly $10.6 million in gross revenue, but after expenditures yielded $429,128 in net revenue.
- Revenue Distribution
- UWEO went on to summarize how and where IELP gross revenues are primarily distributed.
- Of IELP’s fiscal year 2011 gross revenue, approximately $4.2 million went to employee salaries. UWEO distinguished between what are referred to as “direct” and “indirect” salaries.
- “Direct” salaries include lecturers and other positions that work only within the IELP program and are paid exclusively by IELP. “Indirect” salaries cover operational support positions such as IT, Human Resources, and administrative positions, which serve IELP as well as other UWEO units.
- UW Central Campus Overhead
- UWEO units such as IELP are charged relatively low overhead rates by the UW:
- 13.28 percent of revenue for on-campus, non-degree programs;
- 5.5 percent of revenue for off-campus, non-degree programs.
- UWEO Overhead
- IELP also pays an overhead charge to UWEO, labeled “Infrastructure” on financial statements. IELP Infrastructure is largely comprised of “indirect” salaries, among other expenses such as the cost of renting building space.
- The total IELP Infrastructure amount is calculated using a time-based analysis, so that the IELP pays for the portion of effort that directly supports IELP.
- Campus Partners
- UWEO programs are true UW programs, and therefore UWEO maintains a longstanding strategy of working collaboratively with campus departments at the UW.
- UWEO identified three IELP programs in which net revenues were returned to campus partners in 2011.
- Load Rates
- The payroll benefit load rate for IELP lecturers is 25.8 percent, meaning that for every dollar paid to lecturers, the UW pays an additional 25.8 cents toward benefits.
- UWEO Risk Opportunity Fund
- Six percent of gross IELP revenue goes toward maintaining an emergency backup fund, valued at $2.9 million for fiscal year 2011, to help protect IELP against unforeseen circumstances that could negatively impact program or staff funding.
- UWEO noted that a loan from this fund can also provide for innovative ventures, if a sound opportunity to enhance IELP’s offerings and programming is identified.
AFT asked if the IELP Risk Opportunity Fund is used to pay for expenses beyond those incurred solely by IELP.
UWEO replied that it is a fund dedicated specifically to IELP. UWEO pointed out that historically risk opportunity money from UWEO had been used to help IELP when it was in need, which was an impetus for creating an IELP-specific fund.
AFT requested clarification on the fluctuation in net IELP revenue between fiscal year 2009, where IELP experienced a net loss of $24,096, and fiscal year 2011, where IELP produced a net gain of $429,128.
UWEO explained that as a portion of the whole, this amount of variation is not irregular. Even the $429,128 in net revenue for fiscal year 2011 represents only a four percent margin over IELP’s break-even point.
This means that all net revenue totals for the past five years stayed within projected ranges, with four out of five being positive.
The next UW/AFT bargaining session is scheduled for May 14.