Formation Document

Memo to: President Wharton
From: Campus Budget Committee Formation Committee
Re: Recommendation for formation of the Campus Budget Committee

At the request of the College Planning Committee and as required by Goal XII of the Campus Strategic Plan, the CBC Formation Committee has been organized. The charge of this committee is to develop a formal plan for the formation of a Campus Budget Committee as well as provide a process for college-wide adoption of the philosophy of Value-Centered Budgeting as defined in Attachment 1.

Our committee was made up of the following members:

  1. Four members of the Faculty Budget & Resources Committee
  2. A faculty representative from the University Planning Committee
  3. A student representative elected by the Student Senate
  4. The Vice President for Academic Affairs
  5. The Associate Dean of Student Affairs
  6. The Director of Administrative Services
  7. The University Controller
  8. The Assistant to the VPAA
  9. The Budget Coordinator
  10. The Director of Finance

This committee met several times between November 2000 and January 2001. Based on these meetings, we unanimously agreed to recommend that you appoint a permanent Campus Budget Committee We understand and agree that the CBC reports directly to you as President of the College and the primary role of the committee is to recommend to you in a timely manner the college-wide biennial budget. Details of our recommendation are as follows:

CBC Vision

Within the parameters of the Campus Strategic Plan, the CBC process will provide for a participatory budget process that will represent the values of Plymouth State University, bring an understanding of financial and budget issues to the campus community, and improve the allocation and management of the institution’s resources. This process will require of everyone the values of openness, honesty and clarity as well as provide regular communication with the entire campus community.

CBC Mission

The CBC is empowered to recommend the biennial budget to the President. Using the Campus Strategic Plan, campus constituents, along with administrative representatives, will develop a value-centered short- and long-term financial plan for the entire institution. In addition, it is the committee’s responsibility to develop recommendations that will maximize the use of available resources within the framework of the goals and objectives of the Strategic Plan.

Committee membership and Terms

We recommend that the committee be made up of 18 members of the campus community representing all constituencies. These include:

  1. All five members of the Faculty Budget & Resources Committee who are elected to staggered terms by the faculty
  2. A faculty representative from the University Planning Committee
  3. A PAT and OS representative appointed by their respective constituent group
  4. Two student representatives elected to two-year staggered terms by the Student Senate
  5. The Vice President for Academic Affairs
  6. The Dean of Students
  7. The Director of Institutional Research (when this position is funded and filled)
  8. The Director of Administrative Services
  9. The University Controller – non-voting
  10. The Assistant to the VPAA – non-voting
  11. The Budget Coordinator – non-voting

  12. The Director of Finance

Committee leadership and Organization

  1. The Committee Chair will be selected by the committee on a biennial basis and serve as chair through the end of the biennial budget process. Any full-time benefited employee serving on the committee is eligible to serve as chair.
  2. An executive committee will be created each biennium. This subcommittee will include the Chair of the CBC, the Director of Finance and one other member of the CBC elected by the committee as a whole. The function of the executive committee is to meet on the alternate weeks when the CBC does not meet and develop the agenda and presentations for the larger committee.
  3. The Office of the Director of Finance will serve as the convener of the CBC and will also be responsible for delivery of timely and understandable information and data.
  4. The representative of the University Planning Committee is responsible for maintaining clear and open lines of communication between the two committees.
  5. The President will from time to time join the CBC for discussions of a broad range of issues including the Strategic Plan, the Board of Trustees, compensation, and other issues requiring direction, support and understanding.
  6. Representatives of the USNH system office and members of the Board of Trustees will occasionally be invited to join the committee to discuss important issues of financial planning.

Operating Principals and Assumptions

  1. The budget is the primary responsibility of the President. Final approval, therefore, must come from the President’s office.
  2. Participants in the CBC shall adopt a college-wide perspective. For this process to be successful, we need to have a qualified consensus on campus-wide decisions.
  3. The committee will disseminate information to the university community on a regular basis.

Long Range Goals

The efforts of the CBC will be directed toward:

  1. Insuring that the planning and budget processes are linked.
  2. Creating a long-term financial plan for PSU that emphasizes our collective stewardship responsibility and long-term financial health
  3. Developing budget policy and procedures that will allow for better planning, maximizing the use of available resources and provide opportunities to reward departments and individuals for successfully supporting the goals of the Campus Strategic Plan.

Short-Term Work Plan

Improve the campus-wide understanding of and participation in the budget process through:

  1. The development of an understanding of the budget process and the budget drivers through the use of strategic indicators.
  2. The development of a value-centered budget process and system that will include the design and development of an academic and administrative strategic planning process at the departmental level.
  3. A review of the Strategic Plan that creates a list of those items included in the Strategic Plan that are supported by the budget and those that need to be developed and supported through budget reallocation. This will require that the Strategic Plan be converted into financial terms. It will also require that the Strategic Plan be prioritized through a realistic set of criteria.
  4. A review of enrollment trends and the preparation of a five-year enrollment forecast.
  5. The development of a set of strategic indicators using PSU Balance Sheet data such as cash, accounts receivable, debt, equity and investment in plant.
  6. The development of a five-year budget model based on enrollment measures, productivity measures and other budget drivers such as salaries, benefits, utilities maintenance and deferred maintenance, and other overhead.
  7. A review of the actual staffing patterns within the institution to insure that they are representative of the values of the entire institution.
  8. A review of the actual staffing of the institution compared with comparator and competitor institutions to insure that our staffing allocations are consistent within higher education.
  9. The development of a system of measures through a series of approaches for all areas of the university such as a contribution margin model.
  10. An annual review of auxiliary funds, including rates and recommendation of fees.
  11. A review of the capital budget development process.
  12. The development of a three-year plan for R&R funding, and development of a process for project priorities from R&R funds.
  13. The development of a set of clear, easy-to-understand tools for reporting the budget development process as well as providing ongoing information to the Student Government, Faculty, PAT and OS constituency groups.
  14. The development of a recommendation for establishing contingency reserves and deferred maintenance reserves.
  15. Other analysis as it is developed and recommended by the committee or others.

Budget Cycle

The CBC will be responsible for creating a biennial budget in accordance with the timeline and process required by USNH, the Governor’s office and the Legislature. It is important that the work of the committee be completed in a timely manner that allows the President to deliver the appropriate materials and recommendations to the USNH Board of Trustees. A budget cycle needs to be developed to insure that this process stays on track. The budget for the off years will be created by the budget office with the review and approval of the committee and the President. The following is an outline of the typical biennial budget process. We have used the FY2004 & 5 budget cycle because that will be the first full biennial budget prepared by the CBC. A transitional timeline will be necessary for the years leading up to this period.

1.   May 2002 – CBC meets to review the budget for FY2003 and the parameters for the FY2004 & 05 budget.

  1. September – December 2002 – The CBC develops budget scenarios using the Campus Strategic Plan, the FY2004 & 05 budget parameters and the departmental strategic plans presented by the PA’s.

  2. November 2002 – The CBC begins working with auxiliary operations for the construction of initial budgets for FY2004. The primary goal is to develop auxiliary rate increase recommendations.
  3. Early December 2002 – The CBC presents a draft budget at an open forum for review and discussion. Enrollment forecasts, mandatory fee discussions and any recommendations for the reallocation of funds will be discussed.
  4. Mid-December 2002 – The CBC meets with the President to discuss status of the budget development process.
  5. January – February 2003 – The CBC continues to meet to refine the budget proposal.
  6. February 2003 – The CBC holds an all-campus budget meeting focusing on the goals and objectives for the FY 2004 &05 budgets and their budget impact.
  7. February 2003 – The CBC takes the room & board rates plus mandatory fees to the Student Senate for their endorsement.
  8. Early March 2003 – the CBC delivers a final budget to President Wharton for discussion and approval.
  9. March 2003 – The Finance Committee of the BOT meets with student leaders and campus administration to approve fees for FY2004.
  10. May 2003 – The Finance Committee of the BOT meets to approve the final budget parameters. This includes final enrollment projections and other drivers of revenue and expenses.
  11. June 2003 – If the Legislature and the Governor have finished the State budget, the final tuition rates and budgets will be approved at the June meeting. This process often overlaps into July.
  12. September – December 2003 – The CBC will continue to work with the Campus Strategic Plan, and departmental strategic plans. In addition, the committee will work on developing reporting tools, resource allocation methods, and budget policy and procedures. This mid-cycle year will be a time for analysis, planning and discussion.
  13. Early December 2003 – Auxiliary fund budget and rates will be reviewed by the CBC for FY 2005.
  14. Mid-December 2003 – The CBC meets with the President to discuss status of the budget development process.
  15. January – February 2004 – The CBC meets to review the FY 2005 budget proposal.
  16. February 2004 – The CBC will hold an all-campus budget meeting focusing on a review of budget success and failures and to kick off the departmental strategic planning process.
  17. February 2004 – The CBC takes the room & board rates plus mandatory fees to the Student Senate for their endorsement.
  18. Early March 2004 – the Director of Finance delivers a final budget to President Wharton for discussion and approval.
  19. Spring 2004 – the CBC and CPC will begin the process of departmental strategic plans and the development of recommendations for inflationary and programmatic or critical needs.