Resource Allocation Report

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Resource Allocation Report

• Academy
• First Edition
• November

2
Preface

• The Academys Resource Allocation Report provides
  information describing the allocation of
  resources in relation to the schools mission,
  long range plan, and program goals, providing
  information in three formats general overviews,
  tables, and graphs. This document portrays the
  linkage between the mission, long range plan,
  annual operations and budget in a single
  document, and focuses attention on the broad
  policy and planning issues inherent in the
  allocation of institutional resources.
• The allocation report consists of five major
  components beginning with a general description
  of the school. The second component includes the
  major last year accomplishments, the specific
  directions for the current year, the organization
  of the school and includes profiles of the
  student body and the employee base. Reports on
  the schools actual (last year) and proposed (the
  current year) revenues and expenditures and
  detailed support materials form the body of the
  third major section of the document. Comparisons
  of Academy and other schools in several relevant
  areas of management and budget are included in
  section four. Section five contains evaluative
  material on financial equilibrium.
• As the schools strategic plan and objectives
  emerge, the components of the Resource Allocation
  Report will link the schools mission, long range
  plan, annual operating plans, goals, objectives
  and resource allocations into recognizable units
  on both a micro and macro basis. Since the
  school experiences numerous changes to the
  initial budget during the fiscal year, it is
  possible only at year-end to know exactly how the
  schools resources have been applied. This
  document, coming after the fiscal year-end at
  June 30, allows full disclosure of resource
  allocation.
• The resource document is part of a continuing
  effort to improve the quality of information
  available for use in establishing policies and
  managing the school. To facilitate improvement
  in these materials, the reader is encouraged to
  provide the Business Office with comments and
  suggestions for changes to the document.
• Barbara Egan
• Director of Finance and Operations
• 2003

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Overview of the School

• Mission
• Institutional Description
• Long Range Plan
• Facilities Planning Report

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Mission

• The mission of Academy is to provide a diverse
  and motivated group of young people the best
  possible education for lifelong learning, service
  to their community, and preparation for an
  ethical, productive and joyful life in a complex
  and changing world. While fulfilling this
  primary mission, the School will provide service
  in the field of education.

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Institutional Description

• The Academy is a coeducational, college
  preparatory day school for students in
  kindergarten through grade 12. The School
  currently serves 864 students throughout the
  Minneapolis and St. Paul metropolitan area.
  Academy was created in 1969 by the merger of two
  independent schools St. Paul Academy, founded
  for boys in 1900, and Summit School, founded for
  girls in 1917.
• Wonderful Academy was modeled after British prep
  schools. Concerned about the exodus of students
  to boarding schools in the East, SPAs founders
  sought to create an academically rigorous
  institution that would prepare students for
  entrance to the most selective colleges and
  universities in the country. John DeQuedville
  Briggs, a Harvard graduate and son of Harvards
  dean of students, served as headmaster of the
  academy from 1914-1950. A decisive and outspoken
  leader, Briggs gained a national reputation for
  the School, attracting an outstanding faculty,
  setting high academic standards and providing a
  disciplined environment for boys. Under Briggs
  leadership, the School moved from its original
  location on Dale and Portland to a newly built
  country day school campus on Randolph Avenue in
  1917. The Academy campus now serves as the Middle
  and Upper school. Until the mid-1960s, the School
  required military training.
• Country Day School was founded in 1917 by a group
  of parents who sought to provide their girls with
  a college-preparatory education equal to that
  which was available for boys. This was a radical
  notion at the time?women did not yet have the
  right to vote, and many young women were sent to
  finishing schools to prepare them to become the
  distinguished wives of important men. Sarah
  Converse, Summit Schools first Headmistress, was
  a Vassar graduate from Atlanta. Under her
  leadership, Summit School offered a strong
  academic program, an active student government,
  student service programs and interscholastic
  athletics. Miss Converse hired an exceptional
  faculty and developed a curriculum that prepared
  young women for admission to the nations finest
  colleges. The Summit School campus, built in
  1924, now serves as home to grades K-6.

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Long Range Plan

• Students
• Create a student body of motivated young people
  who are diverse in racial, ethnic and cultural
  heritage as well as in learning styles and
  strengths, in order to prepare all students for
  effective lives in a global society.
• Provide a program of financial aid that ensures
  the Schools ability to serve the areas most
  motivated students regardless of their financial
  circumstances.
• Program
• Provide a strong liberal arts education, by
  maintaining a balance of academics, arts and
  athletics in order to develop the finest
  intellectual and personal attributes of students.
• Reaffirm the Schools insistence on high academic
  standards. Prepare students for lifelong
  learning, including success in demanding college
  and university programs.
• Increase interdisciplinary, experiential and
  service learning opportunities, which encourage
  students to see the connections among disciplines
  and between themselves and their world.
• Integrate information technology into all levels
  of the curriculum to enhance problem-solving,
  communication and learning skills.
• Expand international studies and programs to
  prepare students for leadership in a global
  society.
• Establish partnerships with neighboring
  institutions to maximize the Schools and the
  communitys educational resources.
• Review the Schools facilities master plan and
  recommend construction and renovation of
  facilities to support Long-range Plan initiatives
  and to fulfill long-standing needs.
• Enrich and promote Summer and Extended Programs.

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Facilities Planning Report

• The Academy intends to construct a Middle School
  building at the Randolph Campus as a first step
  towards realizing its recently completed Campus
  Plan Studies. The Campus Plan is based on a
  significant review and articulation of the
  schools mission, curriculum, and pedagogy, that
  has been on-going since 1994. For further
  information, please refer to the Campus Plan
  Studies, 1996.
• The Middle School facility will be the home to
  grades 6, 7, and 8. It will include flexible
  instructional space suitable for
  interdisciplinary team teaching. It will support
  independent scheduling and staffing for English,
  history, mathematics, science, and foreign
  language. Other programs and services, such as
  physical education, fine arts, library and dining
  will be shared with the Upper School.
• In addition to the Middle School, the Campus Plan
  anticipates new construction for Upper School
  science and mathematics, a Library Information
  Center, performing arts space, and an expansion
  of indoor athletic facilities.
• As new space is provided and other space is
  vacated, extensive renovations are planned to
  provide Upper School classrooms that function as
  technology-ready learning laboratories,
  department and student commons, student gathering
  and social spaces, student services and central
  administration offices.

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Stewardship and Financial Equilibrium

• The stewardship role of a trustee is the
  preservation of the schools net assets, passed
  in trust from generation to generation, to be
  used in the achievement of the schools
  educational mission.
• Components of Financial Equilibrium
• Current Revenues should equal current expense.
• Rate of growth in revenues should equal or exceed
  the rate of growth of expense.
• Value of the endowment should be either preserved
  or increased.
• Value of the physical plant should be either
  preserved or increased.

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Operations

• Employee and Student Information

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Employee Profile
11
Faculty Profile
Yrs of Exp
12
History of Enrollment
13
Finance

• Big Picture for last year
• Budget for the current year
• Revenue Detail
• Expense Detail

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Budget Summary

• This section provides an overview of the schools
  last year budgeted and actual financial
  allocations. Detailed budget information is
  provided in supporting reports. The budget
  balances revenues and expenditures. The budget
  for last year was based on 867 students. This
  represented a student body of approximately the
  same size as the previous year. The current year
  budget includes a tuition increase of
  approximately 6. Lower school tuition increased
  slightly more than 6 in order to include all
  required field trip fees into the base tuition.
• Revenues and expenditures are represented in the
  following areas educational operations,
  investment management (including endowment),
  plant, and fund raising (both annual and
  capital). These four areas represent the four
  businesses of the school. These are now
  considered manage asset groups rather than the
  older fund accounting format. While managed
  asset groups (MAGs) are similar to the older
  funds, the accounting for the groups is more
  fluid and in compliance with recent changes to
  generally accepted accounting practices (GAAP)
  for not-for-profit organizations.

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last year (actuals) the current year (budget)
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Revenue and Expense Overview
Operating Revenue
Operating Expense
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Detail for Educational Operations
18
Educational Operations
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Revenue Detail

• The school receives revenue from limited sources.
  The most significant stream of revenue (50) is
  generated through tuition and fees. Fund
  raising produces a second stream of revenue for
  operations. This year, renewable gifts, (Annual
  Fund) totaled in excess of 750,000. A third
  stream of revenue is generated by the schools
  investments, principally an endowment. The
  endowment Net Total Return was 2,943,697 and 16
  of all revenues. Of this Net Total Return,
  1,095,484 was actually used for operations. The
  balance has been reinvested for future growth.
• The following revenues table and graph provide
  further detail and information about revenue
  sources. Restricted revenues, either gifts or
  endowment, are funds which are limited to a
  specific use by the contributing individual or
  foundation. Unrestricted revenues are those
  funds which the institution is free to allocate
  as it deems appropriate. Board designated funds
  are considered unrestricted for accounting
  purposes. The revenues reflected in the
  following tables and graphs not only recognized
  cash revenue, but also recognize pledges as
  provided in the new accounting guidelines.

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Detail for Educational Operations
21
Detail for Investments
22
Detail for Plant
23
Expense Detail

• The school utilizes revenue to support a variety
  of activities and programs. The Academys
  expenditure summaries and detail schedules
  provide the actual figures for last year, a rough
  comparison to expenditure levels for 1995-96, and
  projected allocations for the current year. The
  expenditure information provided in the following
  displays focuses attention of the four major
  functions educational operations, investment
  management, plant, and fund raising. These
  functional displays provide useful information on
  the productivity of each area. This clarity
  simplifies the task of evaluating the schools
  performance against the goals of financial
  equilibrium and stewardship.
• Educational Operations first pays for all of
  its expenses, then secondarily pays for all of
  the expenses for the plant which are not covered
  by income generated in that asset group. Plant
  expense falls into two categories operations
  and maintenance (OM) and capital (CPR). As
  support for plant grows in the endowment, the
  burden on educational operations will lessen.
  The financial equilibrium standard applied to
  educational operations is to balance revenues and
  expenses on an annual basis and on a multi-year
  basis.
• The assets in the investment group are invested
  by an Investment sub-committee of the Finance
  Committee of the Board of Trustees and their
  actions are reviewed by the Finance Committee and
  the Board itself. Educational Operations
  utilized 7.8 of a 3 year market value to
  support the programs of the school. Some of the
  endowment revenue is restricted, some
  unrestricted. The investment management group
  also pays for all of the costs associated with
  its activities. The financial equilibrium
  standard is that total value of the asset must be
  either preserved or increased each year and on a
  multi-year basis.
• The plant asset generates a small revenue stream
  which is applied to its costs. Educational
  operations transfers the needed resources to
  support this asset management group. The
  financial equilibrium standard for the plant is
  to maintain the value of the asset from year to
  year including depreciation.
• Fund raising (capital development) stands alone
  and shows the most dramatic change from previous
  budget formats. However, this display allows
  trustees to clearly see the productivity of this
  unit. The fund raising function does not depend
  on tuition support for its existence. Not only
  does fund raising generate enough revenue to
  cover its expenses, it then contributes to the
  other asset groups. The last year financials
  show the second year (the quiet period) expenses
  of a capital campaign. The revenues generated in
  last year, exceeded expectations significantly
  and make the period stand out as the finest fund
  raising period in the schools history.
• The expense tables provide both the larger view
  and the minute detail and clearly demonstrate the
  extremely good financial health of the
  institution.

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Expense Detail - Divisions
25
Departments (US/MS)
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Expense Detail - Athletics
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Expense Detail - Plant
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Fund Raising Detail
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Comparisons and History
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Tuition Comparison
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Cost per Student Comparison
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Per Student Cost Comparisons
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Endowment per Student Comparison
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Investment Utilization Trends
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Fund Raising Trend
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Cost to Raise 1
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Evaluation

• Financial Equilibrium

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Financial Equilibrium - Educational Operations

• Standard
• Current revenues should equal current expense,
  using constant s.
• Calculation
• Beginning net assets (from statement of
  activities) (213,339)
• Inflated by fiscal CPI-U (Cambridge Associates)
  2.8 5,973
• Inflated assets (216,312)
• Ending Net Assets (from statement of
  activities) (203,119)
• Real Increase in Net Assets 13,193
• Education Operations dependence on Gifts
  4.0
• Standard (Met or Not Met) - Standard met,
  however, decreasing the dependence on annual
  giving may be worth considering.

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Financial Equilibrium - Investments

• Standard
• Value of investments should be either preserved
  or increased, using constant s.
• Calculation
• Beginning net assets, (from Schedule 1)
  15,110,556
• Inflated by fiscal CPI-U (2.8) 423,096
• Inflated assets 15,533,652
• Ending Net Assets (from statement of
  activities) 18,136,951
• Real Increase in Net Assets 2,603,299
• Most desirable case (less contributions
  applied) 1,178,182
• Earned Increase (Decrease) in Net Assets
  1,425,117
• Standard Met or Not Met - Standard met.

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Financial Equilibrium- Plant

• Standard
• Value of plant should be either preserved or
  increased, using constant s.
• Calculation
• Beginning net assets, (from statement of
  activities) 9,779,941
• Inflated by fiscal CPI-U (2.8) 273,838
• Inflated assets 10,053,779
• Ending Net Assets (from schedule 1)
  9,845,440
• Real Increase in Net Assets ( 208,339)
• Most desirable case (less contributions
  applied) 591,526
• Earned Increase (Decrease) in Net Assets (
  799,865)
• Standard Met or Not Met - Standard not met.