Budgeting at a large public university with nearly $300 million in expenditures and several separate sources of revenue is a massive and complicated project. We are beginning our journey to reset the budget and entirely change the University’s budget model; a Herculean undertaking. This year, our Division of Finance and Business Affairs initiated this effort by establishing new base expenditure budgets. Now, for the first time in many years, each college and unit has an established base budget that will help us move forward in a more strategic direction.
For the last two decades, our University has not employed a holistic approach to budgeting all funding sources and actual spending needs. Historically, a number of units had little or no operating expense budgets and relied on long-term vacant positions to fund operating expenses, which created confusion over actual budget needs. The finance team is now attempting to address this situation, and will continue to work collaboratively across campus to identify a sustainable model for the future.
Resetting expense budgets is the first step towards addressing issues with our financial structure. This is intended to provide a stable foundation on which we can build our new model. Starting three weeks ago, these new expenditure budgets were distributed to deans, vice presidents, and University Business Officers. The Budget Office, including UBOs, in conjunction with unit heads, developed these budgets based upon actual expenditures over the last three years. Presently, all budgets support current service and activity levels, and fund all current positions and regular hiring actions. With expenditure budgets now set, UBOs are working to fill indexes and communicate budget details with all college departments and administrative units. This is expected to be completed no later than the end of November.
As it turned out, this reset process was more complex than anticipated, took longer than expected, and was complicated by a leadership vacancy in our Budget Office. In addition, while our team was diligently working, their overall process was not as openly communicated as it should have been. I take responsibility for this, and extend a sincere apology for the impact this had on our campus.
To begin to address this, our Finance and Business Affairs team presented to the Leadership Council, Faculty Senate, and at a faculty forum last week. We want to continue those communication efforts by hosting a campus-wide forum for all staff, faculty, and students this Friday, November 8, from 1:00 to 3:00 p.m. in the Wood River Room of the Pond Student Union Building. We will broadcast this forum to Idaho Falls (CHE 310), Meridian (679), and Twin Falls (134). Expect to see regular email updates and open forums in the future as our new budget model is continually refined through a more collaborative process.
Our goal for this multistep, multiyear process is to build a sustainable budget model that provides transparency, accountability, and incentives for innovation. We did not get where we are with the budget overnight, and it will take time and effort to get it right. The goal of this undertaking will be a new budget model that will provide information for the University to make informed, transparent and strategic investment decisions for our future.
Although our current expenditure budgets reflect a structural deficit of at least $6 million, our University’s reserves are such that we are financially covered for this period. We plan to rely on some of these reserves over the next few years as the budget model is reset and a more sustainable model is in place. We have discussed this plan with the State Board of Education, and they are supportive of this approach. It is my belief that we will grow ourselves out of this position, as we continue our focus on recruitment and retention of our students as our primary mission.
I have every confidence that this update to our budget will set the University on proper financial footing to move forward, and the eventual outcome will undoubtedly make us a stronger institution. Thank you for all that you do to support Idaho State. Your patience and trust are also appreciated as we move forward in this important endeavor.
Kevin D. Satterlee
Idaho State University