1. Faculty Senate, March 9, 2017 University Budget Update Joan King, AVP and Chief University Budget Officer

2. Budget Activities, 5/2016 to the present
Message from President-Elect Schulz May 31, 2016
Budget review template developed, reviewed with AFOs
7/15/16
Budget review template presented to University Council 8/8/16
Budget review template presented to the Deans
8/10/16
Budget process update to BoR
9/15/16

3. Budget Activities, 5/2016 to the present
Budget reviews held for all areas
Sept , 2016
Senior leadership presented with results of Sept. reviews
Dec. 7, 2016
Finance/Budget update to the BoR
Jan. 26, 2017
Budget hearings for all areas Jan. 30 – Feb 10, 2017
Continuing budget work with regard to current and future year projections

4. What’s been happening? May 31, 2016
WSU Budget (President-Elect Schulz message in May)
Over the past 2 months, I have had the opportunity to review the WSU budget with key members of the senior leadership team. In short, we have been spending more money annually over the past couple of years than has been brought in, which is simply not sustainable. As a University we are spending down central reserves at a significant rate and will need to make some adjustments as to how we budget future building projects and new University initiatives. In order to address these issues we are taking some immediate steps:
First, we will be re-instituting a formalized budget development process for the University. It has been a number of years since a formalized process has been used internally at WSU, and in meeting with our key institutional financial officers we all agree that it is time to bring an improved budgeting process in place.
Second, we can no longer build new buildings without a comprehensive funding plan in place, and we cannot rely on University reserves to “make up” for funds that haven’t been clearly identified. This will require us to be very strategic in our capital projects, and we will involve the WSU fundraising team much earlier in capital project development. Since we have a 10-year plan for capital projects, we need to integrate anticipated state support with private philanthropy more effectively. The bottom line for the future: if we don’t have all funds accounted for, we can’t break ground and start building new projects.
Third, we cannot bring items to the Board of Regents for approval on anything without a robust financial analysis accompanying our proposals. I will insist on this internally, which may mean it takes a bit longer to have fully developed proposals and initiatives.
Fourth, we are continuing discussions with WSU Athletics on ways to reduce our annual deficit. I am working closely with Director of Athletics Bill Moos and his staff to develop a plan that ensures we are balancing revenues and expenses while also ensuring we continue to compete for Pac-12 championships. I will present more details on this to the campus community in the early fall.
Ultimately, we will have some financial challenges over the next couple of years and I will work to ensure that University leadership is bringing forth reasonable solutions that continue our positive momentum but are fiscally responsible.

5. What’s been happening? June, 2016
Joan King and Matt Skinner reviewed historical financial data with the Board of Regents.
These data reflected the President’s message:
Our revenue has increased in the last 5 years but our expenses have increased by a greater amount;
The number of students has increase and so has the number of employees;
Our core area carry forward has dropped in the last 5 years;
We have invested in many capital projects, increasing our debt load

6. What’s been happening? September budget reviews
Budget reviews showed projected expenditures for FY17 compared to current year allocations, for each area of the University. This format excluded carry forward, to focus only on the projected current year revenue versus expenses.
Many areas had planned to use some/all of their carry forward funds, meaning that their current year expenditures would be greater than their current year allocations.
In addition to the plans of the areas, the University was billed for its portion of the Moore versus HCA lawsuit. This $6.6 M cost was allocated to all areas of the University.
Based on the projections from all areas plus the M v HCA costs, it was necessary to move some projected costs from the general fund to other funds.
All areas that had projected expenses greater than projected revenues are doing recovery plans.
Recovery plans include cost reductions as well as revenue increases.

7. What’s been happening? January/February budget hearings
Revised FY17 projections were presented by all areas, showing improvement from Sept. projections. This is due to:
More months of actual data, replacing projections;
Slowing of expenditures from Sept 2016 to Jan/Feb 2017;
Better projections of revenue/allocations and expenditures for the rest of the fiscal year.
Continued focus on controlling expenses while pursuing revenue enhancements.
Continued focus on central area commitments (Security intrusion residual costs, for example) with regard to funding plans.

8. What’s been happening? Since the budget hearings
Areas continue to implement their recovery plans.
The University is working toward a ‘longer view’ with regard to revenue and expenditures projections, including FY18, Fy19 and FY20.
Revenue enhancements are progressing, for example: Waiver program modifications, adding 200 new UG students, the INTO direct admit and matriculation program.
Modeling, projecting, forecasting expenditures and revenues.
Working together with Deans, Chancellors, VPs and the President.

9. Thanks for the opportunity to talk with you today.