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HSU Policies

VPAA 96-01 BUDGET PRINCIPLES, CALENDAR, CATEGORIES, AND PROTOCOL FOR ANNUAL UNIT PRESENTATIONS

Applies To:
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Month/Year Posted: 
09-1996
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.
 

(5)Technological developments will  bring  about  major  changes  in  the  way  that  students  and faculty will  interact.This will impact the budget allocation process.

 
 
(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

 

 

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.
 

 (7)The allocation procedures must be open to inspectionand be explainable.

 
 (8)The  methodology  should  rest  upon  a series  of  features,many  of  which  are  numerically describedand are subject  to verificationand correction.
 

(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.

 
 (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.

(11) Allocations should  be  made  to  colleges  or  to  other  major  academic  units,as  opposed  to departmentsor programs.

 
(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.
 

(13)Funds for dealing with emergency situations, unanticipated enrollment demands, campus-wide commitmentsand special initiativesshould be held centrally in the Provost Office. 

 
(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
 

(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.

 SECTION 2: BUDGET CALENDAR
 
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     During first budget planning meeting for next academic year, Director of Academic Resources presents to ARAC overviewof previous year’s allocations and expenditures

 
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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