Board of Visitors Finance Committee Meeting June 2016 Finance - - PowerPoint PPT Presentation

Board of Visitors Finance Committee Meeting June 2016

Finance Committee Agenda

Consent Agenda:

1. Virginia Blood Services Contract 2. Defined Contribution Retirement Plan 3. Revised In-State Undergraduate Tuition, 2016-17 4. Delegation of Authority for Future Property Acquisitions

Action Items:

• 2016-2017 Operating Budget

Reports:

1. Financial Report 2. Executive Vice President‟s Remarks

CONSENT AGENDA ITEMS

Virginia Blood Services Contract

• We are asking the Board to authorize the EVP for

Health Affairs to execute a two-year contract extension with current vendor for blood services and products.

• This contract extension will:
• assure clinical continuity while Clinical Labs team

completes Epic Beaker implementation

• allow Blood Bank and VCU to explore possibility of

entering into joint contract in 2018

• Total estimated annual value will exceed $5 million

4

University Oversight of 403(b) Retirement Plan

The University provides two primary defined contribution retirement plans:

• The Optional Retirement Program (“ORP”)

(funded with employer contributions)

• A 403(b) retirement program (funded with

employee contributions) The University actively administers the ORP but does not provide the same level of oversight to the 403(b)

5

University Oversight of 403(b) Retirement Plan

With oversight from the Finance Committee, the Retirement Administrative Committee (“RAC”) performs the following functions:

• Establishing and maintaining investment

procedures

• Reviewing fund investment performance
• Communicating with plan participants and

plan providers

• Contracting with necessary professionals

6

University Oversight of 403(b) Retirement Plan

• Evolving best practices are resulting in more peer

institutions adopting oversight of 403(b) programs

• Providing oversight of both programs would benefit

participants by:

• Aligning the goals of both plans
• Reducing and linking fund platforms
• Establishing consistent messaging
• Reducing participant confusion
• Mitigating risk from disparate funds

7

Implementation Timeline

• 1. Communication package mailed to homes – August 2016
• 2. On-Grounds presentations – Fall 2016
• 3. Targeted meetings with key faculty/staff groups – Fall 2016
• 4. Increased vendor presence for participants – Fall 206
• 5. New fund menu available – September 2016
• 6. Transition of assets and funds – Spring 2017

8

University Oversight of 403(b) Retirement Plan

• We are asking the Board of Visitors to:
• adopt equal oversight responsibility for the

University-provided defined contribution retirement plans

• delegate oversight responsibility for both

plans to the Finance Committee

9

Class Year Tuition 2016-2017 $ Increase % Increase First Year $13,060 n/a n/a Guaranteed Tuition (Entering Fall 2016) $14,378 n/a n/a Second Year $12,060 $168 1.4% Guaranteed Tuition (Entered Fall 2015) $12,950 n/a n/a Third Year $11,060 $168 1.5% Fourth Year $11,060 $168 1.5%

Revised 2016-2017 In-State Undergraduate Tuition

10

We are asking the Board of Visitors to ratify a change in the 2016-2017 in-state, undergraduate tuition rate, decreased from a 3.0% increase to a 1.5% increase.

% increase Virginia Military Institute 4.0% UVa – Wise 3.1% Christopher Newport 3.0% James Madison 3.0% Mary Washington 3.0% Norfolk State 3.0% Radford 3.0% Virginia State 3.0% George Mason 2.9% Virginia Tech 2.9% Longwood 2.5% Old Dominion 2.5% Virginia Commonwealth 2.5% University of Virginia 1.4% William & Mary 0.0% Academic Year 2016-17

11

Tuition + E&G Fees: In-State Returning Undergraduate Students

Delegation of Authority for Future Property Acquisitions

• We are asking the Board of Visitors to re-enact a

previously delegated authority to the Executive Vice President and Chief Operating Officer to acquire real property on behalf of the University

• In areas adjacent to or in vicinity of the

University

• In consultation with Rector
• Subject to approval of Chair of Finance

Committee

• Permitted by University‟s Management Agreement

with the Commonwealth

12

2016-2017 OPERATING BUDGET

2015-16 Annual Budget 2016-17 Annual Budget Increase $ Increase % Academic Division $ 1,474.9 $ 1,636.3 $ 161.4 10.9% Medical Center 1,424.7 1,521.9 97.2 6.8% UVa-Wise 41.3 43.7 2.4 5.8% Total $ 2,940.9 $ 3,201.9 $ 261.0 8.9%

Total University of Virginia 2016-2017 Operating Budget

(in millions)

14

The proposed 2016-2017 budget is consistent with multi-year operational plan projections.

SECTION TITLE SECTION TITLE ACADEMIC DIVISION

Academic Division Operating Budget Key Highlights

16

• FY 2015-16 results are on budget
• FY 2016-17 operating budget is consistent with

the Multi-Year Financial Plan

• Key drivers in the FY 2016-17 operating budget:

– New State General Funds – Research and philanthropy growing – Planned compensation increases – Organizational Excellence savings – Short-term infrastructure investments driving significant future period savings

Key Budget Elements

Budget Element Previously Approved by/ Reviewed with BOV General Assembly Action Total state appropriations of $152.8 million   Classified staff salary increases of 3%   University Staff salary increases of 3% *  Faculty salary increases of 4.75% *  Tuition, fees, housing, and dining rates * Endowment distribution rate set at 4.60% * Enrollment levels * Organizational Excellence Savings of $20.1 million * Sponsored research growth of 1% (based on known awards) * Sales and services increase of 2.5% * Gift growth of 2.5%; new gifts to endowment of $25 million * OTPS increase of 2.0% * *Consistent with Multi-Year Financial Plan

17

2015-16 Annual Budget 2015-16 Forecast 2016-17 Annual Budget

Increase vs. Forecast

$ % Sources Tuition & Fees $ 505,129 $ 505,129 $ 531,941 $ 26,812 5.3% State Appropriations 144,737 144,737 152,750 8,013 5.5% Externally Sponsored Research 281,156 281,156 306,471 25,315 9.0% Endowment Distribution 173,122 182,850 190,016 7,166 3.9% Expendable Gifts 129,480 139,480 140,142 662 0.5% Sales & Services and Other 244,751 244,751 318,386 73,635 26.8% Total

$1,478,375 $1,498,103 $1,639,706 $ 141,603 9.5%

FY 2016-17 Operating Sources

(in thousands)

18 18 *

* Reflects adjustment in how Medical Center support is recognized in the School

• f Medicine (previously recognized by the University Physicians Group (UPG).

2015-16 Annual Budget 2015-16 Forecast 2016-17 Annual Budget

Increase vs. Forecast

$ % Uses Instruction $ 415,635 $ 420,635 $ 447,611 $ 26,976 6.4% Research & Public Service 295,656 300,656 365,277 64,621 21.5% Academic Support 149,100 149,100 158,992 9,892 6.6% Student Services 46,208 46,208 49,447 3,239 7.0% General Administration 95,433 100,161 101,016 855 0.8% O&M of Physical Plant 110,653 110,653 113,278 2,625 2.4% Financial Aid 106,335 111,335 123,344 12,009 10.8% Auxiliaries 172,383 172,383 184,259 11,876 6.9% Internal Debt Service/Transfers 83,475 83,475 93,062 9,587 11.5% Total $1,474,878 $1,494,606 $1,636,286 $141,680 9.5%

FY 2016-17 Operating Uses

(in thousands)

19

* Reflects adjustment in how Medical Center support is recognized in the School of Medicine (previously recognized by the University Physicians Group (UPG).

*

FY 2015-16 Forecast (Uses) $ 1,494.6 SOM investments (new faculty, IT, Med Ctr support of research (new methodology)) 58.2 Instructional Costs 23.8 Faculty & Staff Compensation Increases (4.75%, 3%) 21.0 Title IX, Clery Act, Safety & Security, and Other 14.7 Auxiliary Services Activity 11.4 Externally-Funded Research Activity 6.4 Scholarships and Fellowships 6.2 FY 2016-17 Budget (Uses) $ 1,636.3

Operating Budget Roll Forward FY 2015-16 to FY 2016-17

(in millions)

20

FY 2015-16 Organizational Excellence (OE) Results

Savings Target: $16.2 million in FY 2015-16

• OE Initiatives: Strategic Sourcing, ResearchUVA, Gift Processing
• Early Retirement Incentive Plan (ERIP)
• University Financial Model promotes a cost-knowledgeable

environment of accountability FY 2015-16 Results:

• $1.1 million strategic sourcing savings
• $5 million research administration time savings with new IT tool
• $11 million ERIP salary and fringe savings
• Over $2 million individual local school and unit improvements
• Streamlined gift administration by 50%

21

FY 2016-17 Organizational Excellence (OE) Planned Initiatives

Savings Target: $20.1M in FY 2016-17

• OE Initiatives: e.g.,TravelUVA, ResearchUVA, HR Transformation
• Early Retirement Incentive Plan
• University Financial Model promotes a cost-knowledgeable

environment FY 2016-17 Planned Results:

• $6.1M: Central services to achieve 1-3% savings
• $12.1M: Reduction in operating supplement to schools due to cost

reductions and self-funding capabilities

• $1.9M: Other institutional savings

22

University Financial Model Budget by School

(in thousands)

Direct Sources Direct Uses Central Service Allocations Central Support All Funds Bottom Line

Architecture $ 16,760 $ 16,610 $ 4,006 $ 4,042 $ 150 Arts & Science 334,223 328,823 80,664 26,775 5,399 Batten 16,764 16,615 2,177 909 149 SCPS 14,742 14,728 1,357 6,548 14 Curry 56,223 55,689 8,866 6,504 535 Darden 87,677 85,678

• 1,998

Engineering 139,826 139,412 27,881 15,622 415 Law 71,909 70,921

• 988

McIntire 40,353 40,353 7,376 875

• Medicine + HSL

367,177 364,663 51,241 41,781 2,513 Nursing 24,906 24,096 4,659 3,125 810 Total $1,170,560 $1,157,588 $188,227 $106,181 $12,971

23

Previously Approved Initiatives Non-Base Budget Investments

(in thousands)

FY15-16 FY15-16 Forecast FY16-17 FY17-18 FY18-19 FY19-20

Infrastructure* $ 18,634 $ 23,364 $ 40,922 $ 40,088 $ 8,188 $ 8,142 One-time Clery and Title IX

• 4,007
• Cornerstone Plan

9,197 9,197 9,076

(identify alternative source)

Pan-University Center & Research Infrastructure 4,000

(deferred to FY17)

4,000 4,000 4,000 4,000 Faculty Hiring/Start-ups 10,500

(deferred to FY17)

13,581 TBD TBD TBD Total $ 42,331 $ 27,371 $ 53,998 $ 44,088 $ 22,177 $ 12,142

24

• Includes IT (Cyber) Security & Access, Managerial Reporting System, Human Resources

(Function) Transformation

SECTION TITLE SECTION TITLE PRATT FUND

FY 2016-17 Pratt Fund Allocation

• In 1976 the University received a bequest from John Lee Pratt, designated

for the School of Medicine and 4 departments in the College of Arts and Sciences – Biology, Chemistry, Physics and Math. Current market value: $130 million.

• Each year the budget includes the allocation from the Pratt Fund for

research and scholarships in Medicine and for faculty salaries, scholarships, and equipment in the College of Arts and Sciences departments.

• The FY17 budget includes $2.1 million for research and $1.3 million for

fellowships in Medicine; and $0.7 million for fellowships, $1.7 million for faculty salaries, and $1.6 million for equipment in the College of Arts and Sciences departments.

26

MEDICAL CENTER

Medical Center Operating Budget Key Highlights

28

• Growth in volume
• 0.3% admissions, 2.9% adjusted discharges
• Continued strategic investment in service

lines and Be Safe

• Investments in infrastructure
• Epic Phase II, population health, patient-friendly

access

• Investments in funds flow

Medical Center Strategic Objectives

• Continuously improve quality to be the safest health system to

provide and receive care – zero harm to providers and patients

• Support for the School of Medicine education mission
• Investment in Electronic Medical Record, Emergency

Department Expansion, Ed Resource Center and Infrastructure

• Maintain market driven and performance salaries for employees
• Grow clinical care, education, and research
• Fund population health
• Maintain financial stability

29

Medical Center Opportunities

• Benefit from partnership strategies
• Shift towards service line management – more aligned

continuum of care and better patient progression, increased quality and patient satisfaction

• Continue to develop standard work and best practices; spread

into administrative functions

• Integrate planning between academic and clinical enterprises
• Enhance analytic capabilities and access to data to support

decision-making and quality improvement efforts

30

Medical Center Benchmarks

31

COLLEGE AT WISE

College at Wise Operating Budget Key Highlights

33

• FY 2015-16 results are on budget
• Consistent with Six Year Plan
• Drivers:

– New State General Funds – New grant for Economic Development – Philanthropy growing – Planned compensation increases

College at Wise FY 2016-17 Operating Budget

34

2015-16 Annual Budget 2016-17 Annual Budget Increase $ Increase %

Tuition & Fees $ 10,918,032 $ 10,713,851 $ (204,181) (1.9%) State Appropriations 16,495,860 18,091,377 1,595,517 9.7% Sponsored Programs 1,544,151 1,902,810 358,658 23.2% Endowment Distribution 2,759,724 3,148,688 388,964 14.1% Expendable Gifts 554,641 796,632 241,991 43.6% Sales & Services and Other 9,034,217 9,002,108 (32,109) (0.4%) Total $ 41,306,625 $ 43,655,466 $ 2,348,841 5.7% Instruction $ 11,992,493 $ 11,542,179 $ (450,314) (3.8%) Research & Public Serv. 1,806,607 2,367,396 560,789 31.0% Academic Support 4,100,017 4,409,502 309,485 7.5% Student Services 1,589,493 1,696,826 107,333 6.8% General Administration 4,360,813 4,486,256 125,443 2.9% O&M of Physical Plant 1,648,070 1,763,624 115,554 7.0% Financial Aid 4,528,299 6,057,270 1,528,971 33.8% Auxiliaries 11,280,833 11,332,413 51,580 0.5% Total $ 41,306,625 $ 43,655,466 $ 2,348,841 5.7% Net Sources in Excess of Uses $ - $ - $ -

College at Wise Strategic Priorities

• Enrollment
• Retention and Graduation
• Federal Mandates
• Outreach
• High Need Degrees: STEM-H
• Summer Programs
• Undergraduate Research

35

SECTION TITLE

INFRASTRUCTURE PROJECT UPDATE

Projec ject t FY 2016-17 7 Invest estmen ent Managerial Reporting 6.7 million Security & Access $8.1 million HR Transformation 21.0 million Various (Title IX, Budget, Procurement,

Planning Studies)

5.1 million TOTAL $40.9 million

Previously Approved Initiatives Infrastructure Investments FY 2016-17

37 37

Managerial Reporting Project FY 2015-16 Progress

• Selected, installed, and configured key software tools
• Captured basic warehouse design and data strategy;

Initial load of data is ~80% complete

• Identified first reporting release: Expenditures. June

release will replace ~90% of existing standard reports

• Hired the Change Management Lead and branded the

reporting tool

• Completed training plan for June roll-out to 600 users;

selected a UBI Community support tool

• External QA review by KPMG indicates the project is

progressing well

38

Managerial Reporting Project

FY 2016-17 and Beyond: Release Planning

39

FY18>>>>> Jul-16 – Jun-17 FY17 Jan-16 – Jun-16 FY16

Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jun-17

Future subjects to be prioritized

Employee Labor and Benefits $$ Student Financial Detail Billing, Collections, Aid Student Academic Detail Enrollment & Degree Information Additional Employee Information Expenditure Details Income Statement , Balance Sheet

Scope consideration / Ufirst

Managerial Reporting Project Budget

40

Security Enhancement Program Update

Notes: Total 3-year net (of FY15 carryforward, other reallocation) one-time costs are $6,423,600 Ongoing costs start in FY16, ramp up quickly, and are ongoing after FY18 Consistent with presentation to BOV in November 2015

• Oper. Gov./Admin

Protection Detection Response Reporting Subtotals Security Enhancement Reallocations TOTAL One-time $392,500 $2,289,000 $793,200 $572,500 $4,047,200 Benefit Projected $65,000 $1,799,000 $6,423,600 Program oversight, school collaboration Pro-active protection w/ some prevention Rapid detection of possible cyberattacks using current threat intelligence FY16 FY17 $655,000 Rapid diagnosis, isolation and remediation Measure program success, transparency and accountability for decentralized units $331,000 $1,150,800 $387,300 $450,900 $2,195,000 FY18 Projected Ongoing Costs Actual & Projected One-Time Costs $1,285,800 $324,800 $375,900 $75,000 $385,000 $2,716,500 $2,374,000 ($861,800)

41

Security Enhancement Program: FY 2015-16 Accomplishments

• Governance:
• Convened and fully-engaged advisory and

collaboration groups

• Recruited and hired Chief Information Security

Officer (CISO), Deputy CISO (SEP Program Manager), SEP Project Managers

• Detection:
• Implemented network intrusion detection system

(IDS) and intrusion prevention system (IPS) in “detection” mode

• Implemented Dell SecureWorks managed security

service (24x7 monitoring)

• Began implementation of SIEM (Security Information

& Event Management), which allows analysis and correlation of malicious activity

• Implemented vulnerability scanning for critical

systems (weekly scans)

• Protection:
• Initiated multi-factor authentication

project with proof-of-concept testing

• Hardened core infrastructure (Microsoft

environment, overall privileged account management with CyberArk)

• Began development of automated risk

assessment system for departmental risk visibility

• Implemented multi-pronged approach to

protect against Distributed Denial of Service (DDOS) attacks

• Recruited and hired 4 staff
• Implemented whitelisting on critical

servers, blacklisting at the network level

• Improved anti-spam, anti-virus, phishing

prevention by stronger global email filtering

42

Security Enhancement Program: FY 2016-17 Planned Activities

• Governance:
• Continue full engagement of advisory and

collaboration groups

• Ramp up professional development for security

staff—central office and schools

• Protection:
• Phased rollout of multi-factor authentication (by

priority)

• Rollout of automated risk assessment system
• Recruit and hire remaining staff
• Implement whitelisting on critical workstations
• Implement intrusion prevention system (IPS) in

prevention mode

• Ramp up enhanced training (including emphasis
• n phishing education)
• Detection:
• Continue to tune Dell SecureWorks managed

security service (24x7 monitoring)

• Finish SIEM implementation, continue to enhance

capabilities

• Continue phased rollout of vulnerability scanning

across the institution (by priority)

• Recruited and hire remaining staff
• Response:
• Recruited and hire remaining staff
• Implement incident response system
• Report:
• Develop metrics to measure ongoing

effectiveness of security enhancement program

43

Transforming Human Resources at UVA

Ufirst is a Project in the Organizational Excellence Portfolio

45

Key Benefits:

• Reduce the amount of time that

faculty and staff spend doing non- value HR-related tasks

• Drive 15-25% reduction in annual

UVA HR related costs through a more efficient operating model

• Create opportunities for

schools/units to reduce their independently funded cost of local HR support over time

• Mitigate HR operational and

compliance risks

• Enable new capabilities and

simplify the user experience through contemporary HR technology

• Shift from reactional support

(managing issues) to proactive support (anticipating and addressing emerging needs)

Enable the UVA mission through an improved HR service experience:

• Exceptional employment experience
• Recruiting, hiring, and onboarding

experience consistent with the reputation

• f the University
• Improved satisfaction through seamless,

consistent, high-quality HR services and experiences

• Real-time reporting, analytics and people

insights to inform decisions

• Proactive support and engagement from HR

business partners

• User friendly systems and the ability to use

your smart devices

Approximately $55M for FY16 – FY19 FY21 UVA Investment Target Breakeven Year Current annual indirect and direct costs of $43M UVA HR Today Target annual indirect and direct costs of $28M-$32M UVA HR Tomorrow $10M-$15M Expected Annual HR Savings 150-165 FTEs Targeted HR Resource Level

+ Reduce central cost and direct service costs within

University units

+ Reduce talent redundancy and fractional HR FTEs

• Approx. 270 FTEs

Curre rrent nt HR Resource Level FY22 Achieve Future State Year

Key Financial Takeaways

Note – All numbers are estimates that will be refined as key decisions are made

46

UVA’s Current HR performance is not cost effective.

(includes Academic Division, Medical Center, and UPG HR)

Performance Measure

Bottom Quartile Third Quartile Second Quartile Top Quartile Change Required

Total University employees per HR FTE

Efficiently deliver quality HR services with

fewer HR FTEs

Total HR cost per UVA employee

Reduce HR delivery costs by

$10M – 15M per year

HR expense as a % of University Revenue

Reduce HR delivery costs by

$10M- $15M per year

HR labor cost as a % of total HR cost

Invest in

technology

and improved

service delivery

64.33% 53.97% 49.50% 1.29% 0.65% 0.26% $1938 $1016 $810 113 139 247

127 $1,294 1.25% 59.26% 76.4 $2,074 2.00% 66.02% = Current State Performance = Future State Target

47

Ufirst HR Transformation Investment Summary

How is the investment spread across multiple fiscal years? Year Investment FY16 $5M FY17 $21M FY18 $24M FY19 $5M Total $55M How is the investment split amongst various cost categories? Type Investment UVA Staff $13M Hard Technology $10.6M Technology Implementation $14.7M Functional Implementation $14.4M Project Infrastructure $1.8M Total $55M

The key drivers of total investment include:

• Timeline (24 month transformation

inclusive of 18 month technical implementation)

• Team structure (mix of dedicated UVA

resources and consultants)

48

Ufirst HR Transformation Breakeven Summary

FY16 FY17 FY18 FY19 FY20 FY21

$30M $25M $20M $15M $10M $5M

• $5M
• $10M
• $15M
• $20M
• $25M
• $30M

$ 5M $5M $21M $24M

Investment Period

$ 3M $ 6M $ 11M $ 16M $ 19M

Pay Back Period and Break Even Point*

* Estimated savings predicated

• n not backfilling

natural attrition in FY17 and FY18 and facilitating role transitions of 10%-15% in FY19, FY20 and FY21.

$9M $20M $36M $55M

(Cumulative figures in blue)

49

FACULTY HIRING AND GENERATIONAL TURNOVER

Faculty Hiring Key Highlights

51

• In 2014, we developed a hiring plan to address the expected generational

turnover due to retirements.

• After three years, our retirements are trending slower than expected and

actual faculty hires (cumulative) for the same period are below projections.

• We expect to hire 83 new faculty members in Academic Year 2015-16. We

expect 32 retirements/resignations.

• 16 of our Academic Year 2015-16 hires are Cluster and TOPS hires which

allow us to hire in strategic areas of growth.

• We are making significant strides in the hiring a diverse pool of tenure and

tenure-track faculty.

• $13.5 million of one-time operational funds is necessary to invest in start-

up packages and strategic hiring (TOPS and Cluster) for Fiscal Year 2016- 17.

• Hiring plans for the coming academic year are still under development as

well as projections on retirements.

Generational Turnover of Faculty

(from November 2014 BOV Meeting)

20 40 60 80 100 120

FY '15 FY '16 FY '17 FY '18 FY '19 FY '20 FY '21 FY 22

RETIREMENT, RESIGNATION, TENURE DENIAL NEW FACULTY HIRES

467

Retirement, Resignation & Tenure Denial

105

New Hires

52

Planned vs. Actual Faculty Net Growth

20 40 60 80 100 FY '15 FY '16 FY '17 FY '18 FY '19 FY '20 FY '21 FY 22

Actual hires Actual Departures Actual Net Cumulative 53

PLANNED NET FACULTY GROWTH (CUMULATIVE) PLANNED HIRES PLANNED DEPARTURES

Faculty Hiring Academic Year 2015-2016

54

New Hires Cluster Hires 10 ToPs Hires 6 Regular Hires 67 Total 83

*Includes women in STEM and men in Nursing, as well as individuals who are racial and/or ethnic minorities in their field and are not included in African American

New Hires African American Hires 10 Other URM* 23 Additional Hires 50 Total 83

What Are Cluster & TOPs Hires?

– A group, or cluster, of hires in an area of societally important scholarship spanning discipline and school boundaries – BoV approved 21 cluster hires per year (FY „16 was year 1 of 5) – Topics proposed by deans & reviewed by panel – Search committees from top faculty in multiple departments – Provost approval ensures diversity – Powerful attractor for top faculty – Individual Hires – TOPs=“Targets of Opportunity” defined broadly – Search committees and deans target candidates of extraordinary value, include diversity and top field of leadership

Both carry five-year walk down salary support from Provost (100,75,50,25,0%)

CLUSTERS

(STRATEGIC)

TOPS

(OPPORTUNISTIC)

School Description FTE Allocated FTE Hired

A&S, SEAS, ARC Resiliency in the Face of Environmental Change 3.0 2.0 EDU, NUR, ARC Design Thinking and Innovation 2.0 0.0 DAR, SEAS, BAT, A&S, COM Cloud-Scale Data Analytics 2.0 1.0 SEAS, SOM Biomedical Data Science 2.0 2.0 A&S, SOM Neuroscience 3.0 1.0 A&S, SOM, EDU Traumatic Brain Injury 1.0

• EDU, A&S, SOM

Autism Spectrum Disorder 1.0

• DAR, A&S, COM

Global Markets 1.0 1.0 EDU, NUR Youth and Social Violence 1.0 1.0 A&S, SEAS Energy Systems & Molecular Modeling 2.0 1.0 BAT, A&S, EDU Education Policy 2.0 1.0 TOTAL 20.0 10.0

Cluster Hiring

Tenured and Tenure-Track Minority Faculty (2013)*

U.Va. - 2016 New Faculty W&M U.Va. VT Penn UNC Mich UCLA African Am. 12.0% 5.3% 3.6% 2.8% 3.4% 6.5% 4.3% 3.3% Asian 15.7% 5.3% 8.5% 11.5% 12.2% 8.6% 14.0% 16.6% Hispanic 6.0% 1.8% 2.1% 3.5% 3.1% 4.0% 4.1% 6.4% Other Minority 1.2% 1.2% 0.7% 0.9% 0.6% 1.0% 1.5% 0.7%

0% 5% 10% 15% 20% 25% 30% 35% 40%

*IPEDS data as of Fall 2013

57

Generational Turnover of Faculty Academic Year 2014-15

New Hires Retirements/ Resignations Full Professor 5 22 Associate Professor 7 10 Assistant Professor 38 18 TOTAL 50 50

58

New Hires College of Arts & Sciences 28 SEAS 14 All Other Undergraduate Schools 8 TOTAL 50 New Hires STEM 18 Other 32 TOTAL 50

The FY2015-16 budget reflects an estimated 50 retirements, resignations or tenure denials and 50 new hires across the undergraduate schools.

New Hires* Retirements/Resignations Professor 6 11 Associate Professor 21 6 Assistant Professor 56 15 Total 83 32

Faculty Hiring and Turnover Academic Year 2015-2016

New Hires College of Arts & Sciences 46 SEAS 11 All other Undergraduate 26 Total 83 New Hires STEM 36 Other 47 Total 83

59

*Includes all undergraduate school hires, as well as 4 strategic hires in Medicine with secondary affiliations in another school; 69 offers accepted, 14 pending.

Generational Turnover of Faculty Academic Year 2014-15

(in 000s) FY15-16 Projected (as of Nov. 2014) FY15-16 Budgeted Projected Total New Faculty: 82 FTE 50 FTE Salaries - Avg. Full & Assoc.: $127,697; Avg. Asst.: $93,398 $8,362 $5,210 Fringe 2,316 1,443 Projected Total New Faculty Compensation $10,678 $6,653 Anticipated Resignations/Tenure Denial/ Retirements: 61 FTE 50 FTE Salaries - All Faculty (Projected $91,532; Revised $109,298) $5,583 $5,356 Fringe $1,547 $1,483 Anticipated Total Savings $7,130 $6,839 Projected Net New Faculty Compensation $3,548 ($186) Start Up Packages: Number of STEM Packages 27 17 Total amount $47,800 $21,100 Impact to FY15-16 Budget (50% of start up packages) $10,500

60

Projected

As of summer 2015

Projected

As of 20 May 2016

New Faculty ty (FTE) E) 92 FTE* 83 FTE** Salarie ries s ($) ($) $17,369 $8,890 Fri ring nge ($) ($) 4,828 2,471 Tot

• tal Comp

mpensa ensati tion n ($) 22,198 98 11, 1,36 361 Resi signa nati tions/R

• ns/Reti

etire reme ment nts s (FTE) E) 60 32 Salary y ($) ($) $5,583 $3,822 Fri ring nge ($) ($) 1,552 1,062 Tot

• tal

7,13 135 4,884 Project cted d Net et New Faculty ty Comp mpens nsation ation 15,063 63 6,477 TOPs and Clust ster r Hire res s Walkd kdown 2,486 Start-up up Pac Packa kages s (STEM EM only) Nu Number er 34 36 Dollar r va value $42,200 $22,190 Impact to FY16-17 Budget (50% of start up packages) $11,095

Faculty Hiring and Turnover Academic Year 2015-2016

Note: All dollar amounts are in the 000s

61

*Includes Cluster and ToPs hires. ** 69 offers accepted, 14 pending.

FINANCIAL REPORT

Financial Report – Third Quarter Highlights

• Academic Division

– 2015-16 research grants (+6.5%) and philanthropic gifts (+16.4%) are tracking ahead of budget – 2015-16 enrollment and tuition collections are on target – Additional 2016-17 state appropriations allow UVA to reduce tuition increase for continuing undergraduates to 1.5% for the 2016-17 academic year – Faculty hiring is on plan and faculty retirements lag projections

• Medical Center: increased patient volumes and rising case mix

index contributed to improved operating margin

• UVIMCO Long-term Pool: performance was down 2.4% for nine

months ending 3/31/16; UVIMCO policy benchmark was down 0.1% for the same period

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Financial Report – Third Quarter Academic Division: Sources and Uses

(in thousands)

Sources, at $1.4B, are ahead of target by $89.3 million:

• $14.3M increase in external research activity
• $16.9M increase in gifts
• $25.7M strategic/gain-sharing distribution from the

Medical Center received earlier than anticipated Uses, at $1.15B, are right on target for the period. Budget Through 3/31/2016 Actuals Through 3/31/2016 Over (Under) Budget As a %

• f

Budget SOURCES OF AVAILABLE FUNDS: State Appropriations 145,000 142,999 (2,001)

• 1.4%

Grants & Contracts, F&A Recoveries 221,000 235,304 14,304 6.5% Endowment Distribution & Fee 186,000 178,510 (7,490)

• 4.0%

Gifts 103,000 119,852 16,852 16.4% Sales, Investment & Other 155,000 210,391 55,391 35.7% Total Sources of Available Funds 1,315,000 $ 1,404,291 $ 89,291 $ 6.8% USES OF AVAILABLE FUNDS: Direct Instruction 321,000 $ 303,650 $ (17,350) $

• 5.4%

Research & Public Service 230,000 248,756 18,756 8.2% Academic Support 116,000 120,467 4,467 3.9% Student Services 35,000 35,205 205 0.6% General Administration 78,000 88,454 10,454 13.4% Operation & Maintenance of Physical Plant 92,000 83,712 (8,288)

• 9.0%

Scholarships, Fellowships, & Other 96,000 100,251 4,251 4.4% Auxiliary Enterprises 132,000 133,108 1,108 0.8% Internal Debt Service/Transfers 47,000 38,051 (8,949)

• 19.0%

Total Uses of Available Funds 1,147,000 $ 1,151,654 $ 4,654 $ 0.4% SOURCES IN EXCESS OF USES 168,000 $ 252,637 $ 84,637 $ 50.4% (in 000s)

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Financial Report – Third Quarter Academic Division: School Metrics

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Financial Report – Third Quarter Medical Center: Key Statistics

For the period versus last year, the Medical Center‟s

• adjusted admissions are up

3.3%

• in-patient days are up 1.4%
• case mix index (CMI) is up 1.4%

The operating margin is $50.2M versus a budget of $37.7M due to increasing patient volumes and a higher case mix index.

ADMISSIONS: Budget Through 3/31/2016 Actual Through 3/31/2016 % Var. Prior Year % Var. Adjusted Admissions 49,196 48,438 (1.5%) 46,896 3.3% ACUTE INPATIENT: Inpatient Days 138,637 141,209 1.9% 139,262 1.4% All Payor CMI Adj. ALOS - MC 2.83 2.89 (2.1%) 2.93 1.4% All Payor CMI - MC 2.04 2.09 2.3% 2.04 2.2% Average Daily Census 505 514 1.8% 508 1.2% OUTPATIENT: Clinic Visits 642,400 657,214 2.3% 626,319 4.9% Emergency Room Visits 61,434 63,542 3.4% 60,359 5.3% SURGICAL CASES: Hospitals 14,137 13,973 (1.2%) 13,931 0.3% Outpatient Surgery Centers 10,796 10,896 0.9% 10,079 8.1% Total 24,933 24,869 (0.3%) 24,010 3.6% OPERATING MARGIN: $37.7M $50.2M 33.2% $47.2M 6.4%

Technical (includes Culpeper) *

* Effective 1.1.16 Culpeper was transferred to Novant/UVAHS JOC. Novant fully consolidates Culpeper while UVAHS accounts for its 40% share under the equity method (in non-operating activities) and stats are no longer tracked as of 1.1.16. Therefore, above stats include Culpeper for the six months ended 12.31.15.

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Financial Report – Third Quarter

UVIMCO Long-term Pool Performance

For the quarter, the Long Term Pool performance (down 1.7%) lagged the policy benchmark return (up 1.8%), primarily in March activity. This is not surprising as the return often lags during sharply rising markets over short periods

• f time.

We remain focused on long-term performance, where over twenty years, the Long Term Pool has returned 11.4% annually,

• utpacing the benchmark

by 480 basis points.

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Financial Report – Third Quarter

UVA and Related Foundations: Cash and Investments

At March 31, 2016 (in 000s) UVIMCO LTP University- held UVIMCO STP Foundation- held Total

UVA: Cash and Cash Equivalents

• $

169,231 $

• $

n/a 169,231 $

UVA: Other ST Investments

• 1,862
• n/a

1,862

UVA: Strategic Investment Fund

1,839,852

• 450,475
• 2,290,327

UVA: Endowment

4,012,323 174,189

• 4,186,512

Related Foundations: Endowment and Investments

1,608,764

• 25,702

203,950 1,838,416

Total

7,460,939 $ 345,282 $ 476,177 $ 203,950 $ 8,486,348 $

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