New Department Chair Orientation August 15, 2014 BUDGET 101 New Department Chair Orientation August 15, 2014 Diane S. Stephens, Associate Vice President Department of Academic Resources and Planning California State University, Northridge

Today’s Agenda Introductions California and CSU Budget Process CSUN Budget Fund Accounting Overview Budgeting in Academic Affairs Best Practices for Managing Budgets Discussion Throughout! Today’s slides: http://www.csun.edu/academic-resources-planning/budget-presentations

California and CSU Budget Process

State and CSU State and CSU focus on incremental budgeting – changes to base budget CSU Board of Trustees presents support budget request to Department of Finance & Governor (November - December) Governor submits budget request to legislature by January 10th May revise of State & CSU budget to reflect April tax receipts Legislature approves state budget by June 15 for Governor sign off & July 1 implementation—sometimes! http://www.calstate.edu/budget/2005_06BudIndex/SupportBdgt_Book2/Budget_2.pdf

The CSU/California Budget Process

State and CSU http://www.calstate.edu/budget/fybudget/2013-2014/documentation/budget-cycle-chart.shtml

The CSU/California Budget Process July – September for campus/CSU support budget development October – November: BOT support budget review/submit to Department of Finance January 10th – Governor releases budget January – May: Lobbying for CSU May Revise for State & CSU August FIRMS budget submission for CSU (jump off to start cycle again)

CSUN Budget

CSUN appropriation and tuition trends (in millions)

CSUN Tuition Fee Revenue and Support Appropriation Shift

Total Campus Operating Revenue - $500 Million

Our Campus Partners Self-supporting Enterprise entities include: Tseng College of Extended Learning ($36M revenue) Housing ($21M) Parking ($9M) Health Facilities ($200K) Incorporated Auxiliary entities—501(c)(3) include: The University Corporation ($35M) University Student Union ($10M) Associated Students, Inc ($7.6M) North Campus ($.5M) & Foundation ($8M)

Campus Lottery Funding The campus receives about $2.2 million per year in Lottery funding which is distributed to both Academic and Student Affairs

General Fund Operating Revenue- $353 Million

CSUN Student Fees State Appropriation $ 141,659,296 40% Tuition Fee $ 174,396,000 Non-Resident Fees $ 18,900,000 Doctoral and Business Grad Fees $ 2,698,412 Tuition Fee Revenue $ 195,994,412 56% Other Student Fees Application Fee $ 1,500,000 Campus Quality Fee $ 7,829,300 Health Services Fee $ 4,250,550 Augmented Health Fees $ 1,193,000 Misc Student Fees $ 570,000 Total Other Student Fees $ 15,342,850 4% Total Operating Fund Revenue $ 352,996,558

Budget Planning Challenges CSU and State Directives for Enrollment Commitment to Access Impact from Other CSU Campus’ Enrollment Practices

Budget Considerations Enrollment growth Faculty positions Staff support Operating expenses and equipment Deferred Maintenance Capital Planning Technological Changes & Upgrades Faculty Attrition Retirement and Benefits

CSUN General Fund Budget Planning CSUN budget preparation (multi-year based on Governor’s four year commitment) Forecast tuition fee revenues by incorporating enrollment targets Estimate mandatory and centrally managed fund increases Budget request process tied to strategic initiatives University Budget Planning Group (UPBG) and Executive review and discussions

Current Planning Environment? University Budget News Website: http://www.csun.edu/campusbudgetnews

Fund Accounting Overview

Typical Funds in Academic Departments Fees in Trust/General Fund (appropriations, allocations, and fee revenue) – 48501 State Trust Fund (includes ExL MOU revenues, IRA, etc.) – 496XX, 44XXX,etc. Lottery Funds – technically State Trust…but…!

Typical Funds in Academic Departments Auxiliary Funds (separate 501(c)(3) entities) Corporation Foundation Others (not held in departments) Campus Quality Fee Course materials Technology Student support

General Fund Reminder Two major funding groups in the General Fund: Base budget funding One-time funding Carry-forward balances

Budgeting in Academic Affairs

CSUN Policy on Fiscal Responsibility Ensure that: Expenditures don’t exceed available resources Funds expended for intended purposes in appropriate time period Use internal controls to protect from misuse Correctly classify receipts and expenditures Comply with campus policies http://www.csun.edu/sites/default/files/300-45.pdf

The Decentralized Model Principles Communication and Disclosure ERC Recommendation College Budget Model Clarity of Business Practices Facilitate Sharing of Information and Open Communication Balanced Budgets Meet FTES Targets Continuity/Consistency of Practices Defensible Systems (audit readiness) Accountability

ERC Recommendation - 1999 Open budget reporting and consultation process Resources and allocations for all departments, centers, and programs Contingency funds Maintain Communicate to department chairs

What CAN We Control? Focus on savings: Part-time faculty budgets (often controlled by Deans’ offices) Operating expenses—we can ALL do our part Bulk purchasing (take advantage of scale economies) Defer expenses Eliminate unnecessary expenses (efficiency) Share costs with others (“Let’s make a deal!”)

Determination of College Budgets Prior year base budget Budget adjustments (attrition, new hires, FTES increase funding, planned reductions) Salary increases Non-General Fund resources Lottery budget Extended Learning partnerships Grants and contracts

College Budget Workbook Budget summary—all funds General Fund budget allocations (departments) Department General Fund operating expenses Salary worksheet Part-time faculty budget model Supplemental income from leaves and transfers

Salary Worksheet Why It’s Important to Track Salary Costs: Academic Affairs—Salaries make up about 88% of General Fund Expenditures Eight Colleges: Salaries make up 92% of General Fund expenditures overall Salaries range from 85% to 96% of General Fund expenditures among the eight colleges Salary costs fluctuate—A LOT!

Department Budgeting Part-time faculty costs Supplemental income from leaves and transfers (if applicable—may be an offset for college allocation of PTF to departments) Instructional support salaries (TA, GA, SA) Operating expenses Supplies and services Equipment Travel/professional development Contingency

BEST PRACTICES Generating and Using the Right Information

Best Practices Effective scheduling SOC worksheet Monthly reconciliation Line item budgeting at departmental level External funding Contingency planning “Wish list”

Effective Scheduling Effective use of physical, fiscal, and human resources Effectively deploy tenured and tenure-track faculty in order to maximize enrollments using “fixed costs” Minimize part-time faculty and other short-term salary costs--limit “variable” costs and reassigned time Monitor/eliminate “low enrolled” sections Space utilization with University growth

Schedule of Classes (SOC) Worksheet Schedule of Classes Worksheet Both a PLANNING and REPORTING tool for Department Chairs Combines data from multiple systems Combines in worksheet that allows for: Scenario-building (“What If…?”) Determining cost of planned schedule Analyze use of resources to achieve FTES target and support program priorities Modeling new program costs Users at multiple levels

SOC Worksheet

SOC Worksheet = Planning + Priorities

Monthly Reconciliation PeopleSoft Tools nVision® Management Reports General Ledger (GL) Inquiry Panels Timely review of expenditures Reconciliation training University Financial Assistants (UFA)

Line Item Budgeting at Departmental Level Ability to track expenditures against budget by category using existing tools (PeopleSoft) with minimal effort Comparison of original plan versus actual at fiscal year- end Resources: http://www.csun.edu/sites/default/files/sf-coa- guide.pdf (See Chart of Accounts Reference Guide) Most colleges and areas have a reference guide for most commonly used chartfield strings

External Funding Grant and contracts Tracking and processing reimbursed time in timely manner Emphasis on growing external funding as State support declines

Best Practices Contingency planning “Wish list”

Discussion and Questions

Contact Information Diane Stephens diane.stephens@csun.edu Ext. 5929 For a copy of this presentation: http://www.csun.edu/academic-resources-planning/budget-presentations