COSTS AND SOURCES OF FUNDS




Texas A&M University has a total budget of about 654 million dollars for the current academic year (1997-98). Because various sources impose a variety of conditions on the use of these funds, we break down this total into four main budgets. Figures 1 through 4 show these budgets of sources of income for TAMU in the form of pie charts. Some of the money represented is tax money, some comes from tuition and fees, some comes from private business and individuals, and some is from other sources. Each of the charts represents a different kind of activity in the university.

Educational and General (E&G) Budget (Figure 1)



The part of the budget that goes to teaching, University-supported research, and support functions for these activities, is called the Education and General (E&G) Budget (Figure 1). E&G funds are spent on the primary objectives of the institution: instruction, research, and public service. This portion of the budget is supported primarily by state appropriations, by the Available University Fund, and by tuition and lab fees. The general revenue portion of this budget, about 66.8% of this budget's total, is tax money. Parents and students pay the State mandated tuition and lab fees, which account for about 19% of the total E&G budget.

What is the "AUF" in Figures 1 and 2?

"AUF" stands for the Available University Fund. This fund is made up of the income from Texas A&M University's 1/3 share of the Permanent University Fund (PUF). The PUF consists of investments and the saved income from the West Texas lands originally given to the University of Texas by the State of Texas during the nineteenth century and now amounts to several billion dollars. The income from this investment, the AUF, has been shared between Texas A&M University and the University of Texas since 1934.

So that is not tax money, strictly speaking.
Right. Let's go on.


Designated Budget (Figure 2)


The budget funds represented in Figure 2 are generated locally from such sources as field trip fees, computer access fees, printing center charges, etc. These funds are designated by the Board of Regents for specific purposes. These budgets are self-supporting primarily through user fees and sales. In addition, by law the University authorized tuition (UAT) appears in this budget; this tuition is also paid by parents and students. Approximately one-third of the UAT is used to service the debt on University buildings. The rest is used to supplement the E&G budget.

Why do UAT funds appear in the second chart, while other tuition appears in the first chart?

For many years, the General Use Fee (GUF) was used to pay for classroom buildings and laboratories, although more recent increases were designated for faculty salaries and improving the library. In 1997, the State changed this fee into a University Authorized Tuition (UAT) (limited by the State to an amount at most equal to the tuition mandated by the State). This same law requred the universities to list this income in the designated budget. Its uses have not changed.

Auxiliary Enterprises Budget (Figure 3)



The third chart covers facilities and services for students, faculty, staff, and visitors to the campus. Examples are residence halls, food services, athletic department, parking, etc. These enterprises function like businesses and are also self-supporting, primarily through user fees and sales. State appropriated funds are not available to these operations.

Restricted Budget (Figure 4)



Finally, the fourth chart describes those funds available for operating purposes but restricted by donors or other outside agencies as to their specific use. This account is where research grant money goes. These funds are held in local bank accounts, and are self-supporting primarily through gifts, grants, and contracts.

Total Budget (Figure 5)



We have summarized these four budgets in one chart shown in Figure 5. You will notice there that the average student (or the parents of the student) pay about 21% of the budget in tuition, fees, and University Authorized Tuition. More comes from the sale of services such as dormitory housing and food services, but students may opt to use off-campus housing and services. But even including housing and food services, the students and parents only directly pay 34% of the cost of running this university. The rest is covered by the state, the Available University Fund, and other funds.

Even so, the state contribution to the University in the form of general tax revenue is only 41% of the total budget. The state sees its payments to the University as a good investment partly because college educated people earn more than they would without the advanced education, partly because it wants all of its citizens, whatever their economic backgrounds, to have the educational opportunity of a top-quality university, and partly because a highly educated workforce attracts high technology businesses to Texas. An educated populace is essential to the future development of the state, so it makes sense for tax dollars to be used to support the university.

Does it really have to cost so much to teach the students here?

We could teach for less. But what sort of a degree would we be granting then?

What do you mean, "What sort of a degree?" The same sort, of course.

Not at all! You see, your sons and daughters come here for more than just a piece of paper or even the best possible education. They also come to receive the benefit of the reputation of this university. That reputation is largely based on the combination of research carried out here, the fame earned by its faculty for their creative work, and the fame earned later by the people who earn advanced degrees from here. We are world-class, and that fact is noticed when our graduates seek jobs.

How is all of this money distributed to the parts of the University?

The whole budget is available in several volumes at the Reserve Desk of the Sterling C. Evans Library. A summary of the budget can be found by using a web navigator to get to the URL http://www-fiscal.tamu.edu/budget/index.html and the URL http://www-fiscal.tamu.edu/vp/presentations/. In general, funds are given to departments to support their teaching and research activities and to allow them to develop in accordance with the University's strategic plan. Departments are then responsible for using the money appropriately. The University monitors the expenditure of funds, and the University management is assisted in monitoring resources and expenditures by computerized procurement, disbursement and accounting systems. Expenditures are also reported by function to the Legislative Budget Board on the Legislative Appropriation Request. Subsequent reviews are performed by State and Internal Auditors.

Who pays for that huge athletic complex on the south side of the campus? The state?
Recreational Sports activities are supported through user fees in the form of the Recreational Sports fee and Student Service fee. These cover the debt on the recreational sports center, operating costs for the center, and other expenses related to the recreational sports activities on campus.
General Revenues, other E&G revenues, and University Authorized Tuition are not permitted to be used for intercollegiate athletics. It also should be noted that Texas A&M University does not use Student Service Fees to support athletics (unlike many other universities). Intercollegiate Athletics pays for its share of utilities, physical plant, and pro rata share of administrative costs.