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 the Joint Council and in tracking allocation/expenditure data; (4) a definition of a base budget; and (5) a protocol that the Provost, the Deans, and Directors will use in presenting requests for base budgets.
SECTION 1: BUDGET PRINCIPLES
The budget allocation process is based upon assumptions that are subject to 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 students that the CSU will be expected to admit, to educate, and to graduate will increase. Humboldt State University will be asked to do its part in meeting these targets.
(2) Higher education will not see a restoration of its former funding levels. General fund allocations to the CSU will increase only slightly above present levels. Modest increases in the general fund and expected increases in student tuition and fees will be consumed by 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 campuses for restricted uses and will not provide significant augmentations to the routine costs of running the academic programs. Additionally, grants may often require matching resources that may lead to shifting of 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 the academic program in 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 student interest will force the consideration of pedagogical adjustments. Some existing programs 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 as: Sustaining, Enrollment Adjustments, and Special Initiatives. While not as formulaic as the "Orange Book," the number of students on a campus will continue to be a major factor in determining its budget, along with perhaps student‑to‑faculty ratio, other student‑to‑unit ratios, and differences in program costs. Campuses will have a great deal of flexibility in how they budget internally.
Attributes of the HSU Allocation System
(1) The system of allocating academic resources must be based upon a thorough understanding of the resource generation methodology used by the CSU.
(2) Alternative allocation procedures that best meet the academic and campus needs should be utilized.
(3) Internal allocation procedures should be consistent with what is said about the institution in the university mission statement and in the recruiting strategies for faculty, staff, and students. They should include provisions for rewarding behavior that would improve upon the institution's academic mission.
(4) As in the past, the university will not be able to maintain all of its programs at an equal level of excellence. The allocation system accepts the inevitability, even the desirability, of maintaining some academic programs at a higher level of quality than others. Such determinations are linked to the philosophy and priorities that 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 reviews of approved programs.
(5) Some programs, including high demand programs, may be held at a level of minimum program support; others will be allowed to 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 planning that involves program discontinuation, followed by retraining and reassignment of permanent employees is an acceptable budget strategy.
(7) The allocation procedures must be open to inspection and be explainable.
(8) The methodology should rest upon a series of features, many of which are numerically described and are subject to verification and correction.
(9) While the number of students served must be a primary factor in determining the allocation of resources to a college, it is not the only criterion used. It is recognized that 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 students taking classes in the program, and the balance of permanent and temporary faculty. Some programs may also be considered essential to the university.
(10) Because faculty salaries consume the major portion of the Academic Affairs budget, special attention must be focused on the method of assigning faculty positions. The "C‑classification Standards" developed almost three decades ago by the CSU should be adapted to meet the campus needs or replaced entirely with new mode and level criteria designed by this campus. A much more flexible approach to assigning C-classifications should be encouraged -- one that places more emphasis on how teaching/learning strategies are actually carried out in the classroom. It is urged 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 departments or 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 commitments and special initiatives should be held centrally in the Provost Office.
(14) The majority of the Academic Affairs General Fund budget is allocated in support of sustaining operations. The base budget provides for the primary maintenance of current programs and units. The determination of the basic support provided to each of the approved programs and these functions begins with recommendations made by the unit itself as part of the Program Review process. These recommendations are evaluated and modified, as deemed necessary, over the course of the entire review. The process culminates with a recommendation to the Provost regarding appropriate resource support for 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 modifications in university priorities
• costs of implementing modifications in OAA priorities
• costs of implementing special initiatives
• cost changes
(15) As funds and priorities permit, unit budgets will be adjusted upward or downward to 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 within or among units.
SECTION 2: BUDGET CALENDAR
The budget calendar represents a complete budgetary cycle that spans a twelve or thirteen month period. The cycle begins with the Director of Academic Resources and Planning presenting an overview of the previous academic year's allocations and expenditures in September of the current academic 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 and Planning presents to the Joint Council overview of previous year's allocations and expenditures
SEP Deans, Librarian, and Directors present to the Joint Council 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‑year review by the Joint Council of current academic year expenditures
JAN Dean of Enrollment Management presents to the Joint Council preliminary enrollment forecast for next academic year
FEB Director of Academic Resources and Planning presents to the Joint Council preliminary OAA budget for next academic year
FEB Director of Academic Resources and Planning adjusts base budget requests for next academic year, where appropriate, to reflect enrollment projections
FEB Provost, with advice from the Joint Council, approves preliminary budget for next academic year (base budget + enrollment adjustments, where appropriate) for major administrative units
MAR Deans, Librarian, and Directors present to the Joint Council special initiatives requests for next academic year
MAY Dean of Enrollment Management presents to the Joint Council revised enrollment forecast for next academic year
MAY Provost, with advice from the Joint Council, approves preliminary budget for next academic year (base budget + enrollment adjustments + special initiatives) for major administrative units
AUG University President, after receiving recommendations from the URPBC and consulting with Executive Committee, approves the OAA budget for current academic year
AUG/ Provost, after appropriate consultation, approves final OAA budget for current academic year
SECTION 3: BUDGET CATEGORIES
The budget categories used by the Office for Academic Affairs, along with their associated Financial Reporting System subcodes, are listed in the "Provost's Budget Request Package." The list is subject to periodic revision.
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 functions to 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; functions are added and deleted; inflation can be a significant factor; salaries do increase; equipment does have to be repaired and replaced. The base budget for a unit changes accordingly.
To assist in the analysis of base budget requests, the Vice President's Office will provide the Budget Committee and the Joint Council with a three year history of expenditures in major budget categories (e. g., personnel, operating expenses, and equipment) for the administrative units within Academic Affairs; a summary of relevant portions of the Governor's budget for units that have discrete allocations; a projection of Full Time Equivalent Students and Full Time Equivalent Faculty for the coming year; and any additional information that either group may find useful in its deliberations.
The base budget concept excludes consideration of special initiatives. An opportunity will be provided to entertain requests for new initiatives.
Because of the uncertainties of changes in compensation (wages, salaries, fringe benefits, etc.,), presentations should 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, University Librarian, Staff Deans, and the Director of Computing and Telecommunications will make the presentations before the Joint Council. The requests from other directors (CICD, the Marine Laboratory, etc.) will be made by their supervisors. Those who will make presentations will be expected to submit a written summary of their remarks prior to the Joint Council meetings scheduled for the presentations themselves. All of the written summaries will be due on the same day so that committee members will have an opportunity to see all of the information at once and to make whatever comparisons and analyses is deemed appropriate. To assist in those efforts, the Provost will make available to the Joint Council members the preliminary allocations of personnel and operating expense budgets that each major unit would have received under our currently approved allocation procedures. After the oral presentations, the Joint Council members will be able to ask questions, seek clarifications, and offer commentary and suggestions.
Endorsed in concept by ARAC: 19 December 1995
Discussion and 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
Revisions by the OAA Budget Committee: 03 December 1997
Revisions recommended by the OAA Budget Committee: 10 December 1997
Revised and recommended by Joint Council: 17 December 1997
Reviewed and recommended by the Senate Executive Committee: 20 January 1998