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PM 97-01 University Budget Development Process

M E M O R A N D U M



To: Campus Community
Date: December 16, 1997
PM 97-01
From: Robert C. Detweiler, President
Subject: University Budget Development Process

In consultation with the Academic Senate, I am approving the following change in University policy, effective immediately.

BUDGET DEVELOPMENT PROCESS

I.    Objectives

The objectives of the University budget process are:

1. Wide participation and collaboration in the allocation of financial resources using a bottom-up approach.

2. Provision of a link between strategic planning and resource allocation

3. Accountability of resource allocation and expenditures by responsibility centers

4. Reassessment of all budget methodology and baseline budgets

Operational Assumptions

The operational assumptions of the CSUDH budget process are:

1. Full disclosure of data and comparability of accounts and reporting

2. Quarterly reporting of financial status

3. Public hearings

4. Staff support provided by Financial Assessment and Advisory Team (FAAT)

5. Education of the campus community with respect to sound budgeting practices

6. Standardized formats of all documents to ensure comparability across the University

7. Prudent reserves

8. Summaries of all analyses and recommendations from previous reviews forwarded to the University Budget Committee

9. Unit budget committees serve in advisory role to the University Budget Committee

II. Budget Process

The University budget system is a nine step process tied loosely to the State of California fiscal year. These steps are:

1. Update of UniversityÕs Strategic Plan

Prior to May 1, the Executive Vice President will conduct an update of the UniversityÕs strategic plan and establish prioritized annual goals, for the fiscal year beginning 14 months hence.

2. Assessment of previous year-end reporting to campus

Prior to October 1, the UniversityÕs Financial Assessment and Advisory Team will report to the campus the prior yearÕs budget allocations and actual expenditures. This will be done for the campus as a whole, by divisional vice president, and by department. Each divisional vice president will conduct a budget performance review of each responsibility center, including qualitative and quantitative variance analysis.

3. Establishment of preliminary and tactical goals and plans

Subsequent to step 2, above, each vice president will establish in consultation with appropriate division managers, the prioritized tactical plans and goals of the division.

4. Call for standardized action plans from responsibility centers

Divisional vice presidents will call for standardized action plans from responsibility centers. The Academic Affairs process shall be in accordance with Academic Senate resolution 97-04.

5. Development and review of action plans within divisions

Action plans will be developed and reviewed within divisions. Finalized action plans must be forwarded to the University Budget Committee.

6. Budget hearings

The University Budget Committee conducts budget hearings with each divisional vice president.

7. Evaluation of revenue and fixed expenditure estimates

The Chief Fiscal Officer will provide an estimate of projected revenue from all sources and fixed expenditures to the University Budget Committee prior to April 15.

8. Tentative budget decisions on programs, action plans, and budgets

University Budget Committee provides recommended budget to the President. President presents tentative budget allocations prior to May 15.

9. Any additional allocations made throughout the fiscal year.

All allocations throughout the year must be made based upon recommendations of the University Budget Committee.

III . University Budget Committee

Charge

The charge of the University Budget Committee is oversight of the UniversityÕs fiscal resources. This includes:

1. Review action plans submitted by divisions and make recommendations to the President with respect to the allocation of resources.

2. Make recommendations to the President with respect to the augmentation and/or reduction of all fiscal resources.

3. Make recommendations to the President with respect to all discretionary and supplementary allocations.

Composition

The committee will include fourteen (14) members, the composition of which is the following:

Financial Assessment and Advisory Team members are ex-officio nonvoting members of the University Budget Committee. Clerical support will be provided by the Business and Finance Office.

Appointments

Faculty appointments to the University Budget Committee shall be made by elections within each College and School, and the at-large member shall be elected by the Academic Senate.

Student appointments to the University Budget Committee will be made by the Student Senate of the ASI through a process to be determined.

Staff appointments to the University Budget Committee will be made via an election.

Membership eligibility

Faculty and staff must have full time permanent appointments. Student representatives must be enrolled and in good standing for the entire academic year.

Terms of Office

Faculty and staff are appointed for staggered two-year terms with a maximum of two consecutive terms. Students are appointed for one-year terms.

Voting

Approval of committee recommendations requires a two-thirds vote of the members present. Voting may only take place with a quorum present.

Chair

The chair of the University Budget Committee shall be selected by the President. The chair will be responsible for calling all meetings, ensuring openness of the of the hearings, and facilitating discussions. The Chair is also responsible for all official communication between the committee and the campus community.

IV. Baseline Budgets

The University Budget Committee (UBC) will recommend to the President a set of plans it believes best meets the priorities of the coming year. To establish a pool of funds for the UBC in this effort, it is recommended that vice-presidential baseline budgets be defined as continuing budgets amounting to ninety-eight percent (98%) of the prior yearÕs baseline allocation. This will create a two percent (2%) pool as a starting point to the deliberations of the UBC. Responsibility centers may seek reinstatement of the two percent (2%) through the action plans should that remain a high priority in meeting the institutionÕs annual goals.

All existing baseline budgets need to be reviewed and reassessed with respect to their congruence with CSUDH goals and objectives. This should be completed prior to January 1, 2000.

V. Reserves

Prudent reserves must be budgeted in an effort to respond to contingencies and emergencies throughout the year. It is important that such a contingency be identified during the budget process to allow for those situations that are difficult to predict including, but not limited to, enrollment shortfalls, economic downturn, deferred maintenance and special repairs, and other unexpected events.

The university will normally budget at least one percent (1%) of the State appropriation and one percent (1%) of anticipated fee revenue to achieve this goal. This guideline is applicable only when such monies are available.

These funds should remain unallocated at least until the Fall enrollment is evaluated, and preferably until a mid-year assessment is completed and reviewed by the UniversityÕs Financial Assessment and Advisory Team. In addition, the option of carrying over reserves from year-to-year should be considered.

VI. Sunset

This interim policy is to be effective no longer than June 30, 2000. The President, in consultation with the Academic Senate, shall determine a permanent budget process to June 30, 2000.

The term responsibility centers is used in this document to identify those areas that will be required to prepare plans, assessments, and identification of resource budgets to meet established goals.