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Budget Planning Memo & Instructions

OFFICE OF ACADEMIC AFFAIRS
March 3, 2006

To: Members of the Council of Academic Deans Plus

From: Roy Koch, Provost

Re: Process for establishing the 2006-07 academic year budget deadline March 24

Overview of the 2006-07 budget process
It is well understood that we are facing a budget shortfall for the 2006-07 academic year. The process that we have discussed and outlined below is designed to address that shortfall in as rational and transparent a manner as possible. Our best estimates at this time suggest we need to find budget savings of approximately $6M. We have already begun to address this shortfall through the evaluation of various approaches for revenue enhancement. This estimate is a combination of the expected shortfall after considering revenue enhancement, the expectation that we need to do some strategic reinvestment in response to our rapid growth over the past few years, and some modest investment in our current initiatives. Thus some of the budget saving will be reinvested.

Identifying budget savings is, unfortunately, something we have had to do frequently in the past several years. We believe that this and future budget planning processes need to be done in an open fashion and that proposals on potential budget reductions and investments and their impact on the institution are best prepared at the academic and administrative unit level. So we are asking members of the Council of Academic Deans Plus to prepare a list of potential budget reductions, in priority order, totaling approximately 6 percent of the base budget of that unit. (We will provide the amount of the reduction, and the base on which it was calculated, to you in the next week along with some other details to help you complete the spreadsheets attachd.) The rationale for this is that we will not assume, a priori, the reductions will be across-the-board. Also this approach allows for differential reductions and the possibility of selected investments while still meeting the target.

This is a process that we intend to refine and use subsequently to make strategic decisions with year-to-year consistency. n subsequent years, we will begin this annual process in January, having collected the data for the faculty activity reports in the Fall quarter. The information gathered each year through this process will enable us to be better positioned to respond to budget issues. An additional advantage of this activity will be a consistent set of information on the accomplishments of each unit that can be used to respond to the frequent (but randomly timed) requests for such information by OUS, the legislature and similar organizations.

Timeline
We propose that the major information-gathering phase of this process will occur over approximately the next month. The proposed timeline is as follows:

Date Activity

March 7 Final date for submission of electronic faculty activity reports.
March 10 Compilation of data from the faculty activity reports and other sources provided to the Council of Academic Deans Plus.
March 24 CADS Plus members provide a budget proposal to OAA that includes a summary and analysis of the academic units based in large part on data for the past 3 years and a prioritized list of potential budget reductions totaling 6% of the base budget.

Budget decision principles
We propose that the decisions regarding the allocation of funds at all levels be based on a consistent set of principles:

  • Budget reductions must be ongoing and therefore can not be accomplished though the use of fund balances
  • Consideration in allocation of funding and in the determination of any budget reductions will be given to historic equity in funding based on performance.
  • Across-the-board reductions are not advisable given the impacts of past reductions, particularly in some of the support services units of the institution where funding has not followed the increase in enrollment
  • All programs and support units will be evaluated in terms of four key elements: contributions to the mission of the University, program quality, program productivity and program cost.
  • It remains important to invest in the University's strategic program priorities and in the support infrastructure required for those programs.
  • Budget decisions should position us strategically for both the short- and long-term.

Budget Planning Templates
We are attaching a budget planning documents in the form of three templates:

Again, it is our intent that the allocation of funding be accomplished in a transparent, rational and consistent manner. To this end, we propose that academic units prepare a summary and analysis of their activities over the past three years based on the four broad categories indicated in Part 1 of the report template below. You are welcome to share the Part 1 template with units for their use in providing you information but only your template, providing overall summary comments, should come forward. It is our assumption that the information you provide as entries in Part 1 will form the basis of, and support, the reductions proposed by CADS Plus members (in Part 2) as well as the final budget allocation decisions made at the University level. In anticipation of modest extra budget savings derived from the 6 percent reduction level, Part 3 can be used to propose budget investments.

Please email the completed budget planning templates to Sharon Buhlinger at buhlingers@pdx.edu by 5 p.m. on March 24.