Month/Year Posted:
September, 1996
Policy Number:
VPAA 96-01
This administrative memorandum presents: (1) a set of principles to guide the budget process in Academic Affairs;(2) a calendar that shows the major events associated with budgeting;(3) a list of budget categories that will be used in making presentations before ARAC and in tracking allocation/expendituredata; (4) a definition of a base budget; and (5) a protocolthat the Provost, the deans, and directorswill use in presentingrequests for base budgets.
SECTION 1: BUDGET PRINCIPLES
The budget allocation process is based upon assumptionsthat are subjectto change given the effects of various internal and external factors.This document may be revised periodically to reflect these changes.
External Factors (CSU and State of California) That Must Be Considered
(1)The number of studentsthat the CSU will be expected to admit, to educate,and to graduate will increase. Humboldt State Universitywill be asked to do its part in meeting these targets.
(2)Higher education will not see a restorationof its former funding levels. General fund allocations to the CSU will increase only slightlyabove present levels. Modestincreases in the general fund and expected increases in student tuition and fees will be consumedby inflation,pay raises, bond payments,and infrastructure costs.
(3)Grants, contracts,and gifts will increase. However,almost all of these funds will come to the campusesfor restricteduses and will not provide significant augmentationsto the routine costs of runningthe academic programs. Additionally, grants may oftenrequire matching resources that may lead to shiftingof resources
(4)Accountability will become increasingly important,especially in terms of serving a budgeted number of students, of time to graduation, and of the success of the graduates of our academic programin meeting the needs of the people of the state.
(6) Not all public institutions may survive.Those that lack a distinctive mission and character or those too narrow in focus will be especially vulnerable.
(7) There will be academic program changes. Cost factors and studentinterest will force us to consider pedagogical adjustments.Some existingprograms will be merged with others and some will be eliminated as new programs are approved
(8)The CSU will adopt a budget methodology that is basically quantitative in its approach. Major categories of the CSU’s budgets to the campuses have been identified.They are Sustaining, Enrollment Adjustments, and Special Initiatives.While not as formulaicas the "Orange Book," the number of studentson a campus will continueto be a major factor in determiningits budget, along with perhaps student-to-facultyratio, other student-to-unitratios, and differences in programcosts. Campuses will have a great deal of flexibilityin how they budget internally
(7)The allocation procedures must be open to inspectionand be explainable. (9)While the number of studentsserved must be a primary factor in determiningthe allocation of resources to a college, itis not the only criterionused. We recognizethat some programs have higher non-personnel operating costs than others. Programs also differ widely in their modes of instruction(lecture, laboratory,studio instruction etc.), the level (lower division, upper division,graduate) of studentstaking classes in the program,and the balance of permanent and temporary faculty. Some programsmay also be consideredessential to the university. (11) Allocations should be made to colleges or to other major academic units,as opposed to departmentsor programs. (13)Funds for dealing with emergency situations, unanticipated enrollment demands, campus-wide commitmentsand special initiativesshould be held centrally in the Provost Office. (15) As funds and priorities permit, unit budgets will be adjusted upward or downwardto reflect changes in enrollment distribution. This may be viewed as the second component of a unit's budget (Enrollment Adjustment). (16) Remaining funds should go to a third budget component,money requested and approved for special initiatives withinor among units.
Attributesof the HSU Allocation System
(1) Our own system of allocating academic resources must be based upon a thorough understandingof the resource generation methodologyused by the CSU.
(2) We should be willing to use our own alternative allocation procedures in order to best meet our academic and campus needs.
(3) Our internal allocation proceduresshould be consistentwith what we say about our institution in the university mission statementand in our recruiting strategiesfor faculty, staff, and students. They should include provisions for rewarding behavior that would improveupon the institution'sacademic mission.
(4) As in the past, the universitywill not be able to maintain all of its programs at an equal level of excellence. Our allocation system accepts the inevitability, even the desirability, of maintaining some academic programs at a higher level of quality than others. Such determinationsare linked to the philosophy and prioritiesthat appear in the university's mission statement,in its long range planning documents,and in decisions made as a result of the periodic curriculum /resource reviewsof approved programs.
(5) Some programs, including high demand programs,may be held at a level of minimum program support;others will be allowedto grow.
(6) Some academic departments and programs may be merged with one another. Others may be eliminated. However, layoff of faculty and staff cannot be viewed as an immediate source of additional funds to solve a budget problem. Long term planningthat involves program discontinuation, followed by retraining and reassignment of permanent employees is an acceptablebudget strategy.
(8)The methodology should rest upon a series of features,many of which are numerically describedand are subject to verificationand correction.
(10)Because faculty salaries consume the major portion of the Academic Affairsbudget, special attention must be focused on the method of assigning faculty positions. We should adapt the "C-classification Standards" developed almost three decades ago by the CSU to meet our own campus needs or replace them entirely with new mode and level criteria of our own design. Rather than perpetuate the historic linkage of particular modes of instruction with certain approved disciplines, we encourage a much more flexible approach to assigning C-classifications - one that places ore emphasis on how teaching/learning strategies are actually carried out in the classroom. We also urge that more attention be devoted to consistent and uniform application of whatever criteria may be developed in addressing mode and level classification.
(12) The allocation process should not cause dramatic annual changes in the resources available to a unit.A college or other major administrative unit should not ordinarily experience more than a 2% decrease in its budget from one year to the next.
(14)The majorityof the Academic Affairs General Fund budget is allocated in supportof sustaining operations.The base budget provides for the primary maintenance of our current programs and units. The determinationof the basic support provided to each of our approved programs and these functions begins with recommendations made by the unit itself as part of the Program Review process.These recommendationsare evaluated and modified,as deemed necessary, over the course of the entire review.The process culminates with a recommendationto the Provost regarding appropriate resource supportfor the program.
The base budget is subject to other adjustments (up or down). Including:
• Changes in the level of support provided by the Governor's Budget
• Shifts in student demand
• Costs of implementing modificationsin university priorities
• Costs of implementing modificationsinOAA priorities
• Costs of implementingspecial initiatives
• Cost changes
SECTION 2: BUDGET CALENDAR SEP During first budget planning meeting for next academic year, Director of Academic Resources presents to ARAC overviewof previous year’s allocations and expenditures
The budget calendar represents a complete budgetary cycle that spans a twelveor thirteen month period. The cycle begins with the Director of Academic Resources presenting an overviewof the previousacademic year 's allocations and expenditures in September of the currentacademic year and it terminates with the Provost's approval of the budget in August or September of the following academic year.
SEP Deans, Librarian, and Directors present to ARAC base budget requests for next academic year
OCT Provost reports on prior year and current year budgets to Senate Executive Committee, or Senate as appropriate,and discusses plans for next academic year’s budget
JAN Mid-yearreview by ARAC of current academic year expenditures
JAN Dean of Admissions & Records presents to ARAC preliminary enrollmentforecast for next Academic year
FEB Director of Academic Resources adjusts base budget requests for next academic year, where appropriate,to reflect enrollment projections
FEB Director of Academic Resources presents to ARAC preliminary OAA budget for next academic Year
FEB Provost,with advice from ARAC, approves preliminary budget for next academic year (base budget + enrollment adjustments, where appropriate) for major administrative units
MAR Deans, Librarian, and Directorspresent to ARAC special initiativesrequests for next academic year
MAY Dean of Admissions and Records presents to ARAC revised enrollment forecast for next academic year
MAY Provost,with advice from ARAC, approves preliminarybudget for next academic year (base budget +enrollment adjustments +special initiatives)tor major administrative units
AUG/ SEP University President, after receiving recommendations from the URPBC and consulting with Executive Committee,approves OAA’s budget for currentacademic year
AUG/SEP Provost,after appropriate consultation,approves final OAA budget for current academic year.
SECTION 4: DEFINITION OF BASE BUDGET
A unit's base budget is the funding needed to provide essential services for its currently approved program (size and functions).If there were no changes in the number of clients to be served, no required changes in the functionsto be carried out, no inflation,and no compensation increases, then the base budget would remain at the current level for the indefinite future. In the real world, the number of students, faculty, and staff does change; functionsare added and deleted; inflationcan be a significant factor; salaries do increase; equipmentdoes have to be repaired and replaced. The base budget for a unit changes accordingly.
As an interim procedure, we will employ the allocation standards that were developed in Academic Affairsseveral years ago to project base budgets for the major administrativeunits within Academic Affairs.These algorithmswere based upon and reflect the philosophy of the CSU Budget Formulas and Standards Manual, affectionately known as "The Orange Book." The Provost'sOffice will make these projectionsavailable to the ARAC membershipin advance of the base budget presentations that will be made by the Deans and Directors.These projectionswill permit the ARAC members to see if there are significant differences between what is being requested in a particular budget category and what our previouslyapproved allocationstandards would have broughtto the unit.
The base budget concept excludes consideration of special initiatives.An opportunitywill be provided to entertainrequests tor new initiatives. Because of the uncertainties of changes in compensation (wages, salaries, fringe benefits,etc.), presentationsshould exclude these adjustments.Once they have been determined,a unit’s personnel budget will be modified.
SECTION 5: PROTOCOL FOR PRESENTATIONS
The Provost,College Deans, UniversityLibrarian, Staff Deans, and the Director of Computing and Telecommunicationswill make the presentationsbefore ARAC. The requests from other directors(CICD, the Marine Laboratory,etc.) will be made by their supervisors.Those who will make presentationswill be expected to submit a written summary of their remarks prior to the ARAC meetings scheduled for the presentations themselves. All of the writtensummaries will be due on the same day so that committeemembers will have an opportunityto see all of the informationat once and to make whatever comparisons and analyses they feel appropriate.To assist in those efforts,the Provost will make available to the ARAC members the preliminary allocations of personneland operating expense budgets that each major unit would have received under our currently approved allocation procedures. After the oral presentations, ARAC members will be able to ask questions,seek clarifications, and offer commentary and suggestions.
Endorsed in conceptby ARAC: 19 December 1995
Discussionand amendments by ARAC: 24 January 1996
Revisions by ARAC Budget Subcommittee:31 JANUARY 1996
Reviewed by Academic Senate: 02 April 1996
Revisions by ARAC Budget Subcommittee:30 August 1996
Approvedby Provost:01 September 1996
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