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Budget Instructions for FY 05-06
t is time once again to begin planning for the upcoming year.  One of the tools we use to help us plan for our expenditures is the annual budget for both operations and capital.  The budgeting process involves administrators and faculty alike, and ultimately the budget is approved by the Board of Directors at their April meeting.

This letter is intended for all budget managers, and it details the budget process for the upcoming year.  Each budget manager is responsible for submitting a 12-month budget request for the departments that he or she oversees.

The budget requests should be completed by using a series of excel spreadsheets which you will receive as email attachments.  To assist you in determining your operating needs for the next year you will receive, through campus mail, monthly spending detail for the prior two years and the current year.  Please see below detailed steps for completing your budget request for the 2005 – 2006 fiscal year.   Do not hesitate to let me know if you have any questions on this process, or if you need any additional information.
 

Step 1   Review prior spending and budgets 

Review your departmental spending for the current and past two years.  Determine if this level of spending is expected for next year, or if there were unusual circumstances that have occurred.  If you know the cost for a particular area will go up or down, please adjust your numbers accordingly.

In most cases, you should plan for your non-salary expenses to remain very similar to the current year budget amounts. If you are planning more than a 3 % increase for any one line item, please provide a narrative on the third tab of the excel budget workbook explaining in detail, the reason for the increase.

If you are proposing something significantly different than current year spending, a business case should be provided.

(See below for Business Case.)

Step 2  Determine next year’s request for operating expenses, provide detail

Enter, by month, your requested budget amounts in the first tab of the excel workbook. You will notice two areas on the spreadsheet; Discretionary and Non-discretionary. Only the Discretionary area will need to be completed by you, so please leave the salary and benefit lines blank.  Salaries will be budgeted with the advice and consent of the Area Vice Presidents and Human Resources.

Also, do not enter requests for capital items on this spreadsheet.  A capital item is typically a physical item that would generally be utilized longer than one year, and cost over $2,000 (however, we do consider personal computers to be capital as well).  It could also be a major repair that extends the life of a physical item.  Some examples of capital purchases are:  computers, equipment, furniture, software, carpeting, etc.  For capital requests, please see Step 3, below.

Use the account numbers that have been provided for you on the spreadsheet.  Many of the account numbers that we used three years ago have been terminated.  If you think you need an account number that is not on the spreadsheet, please contact Kim Beaner to make sure it is a valid number before adding it to your spreadsheet. Let the spreadsheet do the math for you.  Do not type anything in the colored Total cells.

Provide detail for projected expenditures for all non-recurring and non-routine line items on Tab 2 of the workbook.  For example, if you are requesting funds for Travel, or Staff Training, specifically list the planned activities and estimated cost of the various components -          Trip for X in November:

                        Airfare  $500
                        Lodging  $300

Another example would be Special Events.

Tab 2 in the workbook should be used to help you compile the most accurate budget numbers as possible.
Requests with inadequate detail will be identified as low priority funding requests that may not be funded.

Step 3  Capital Requests

Tab 4 in the spreadsheet should be used for any capital requests.  Please complete the form as indicated, providing a description of the requested item, estimated cost, time frame it is desired, other departments that may be affected, and the reason it is needed.  Also, provide any possible alternatives.  For example, another action that could be taken or item that could be used for a certain time period if funding is not available in the upcoming year. 

Once your requests have been submitted to me, I will enlist the help of Bill Bartell for IT requests and Rod Voeller for facility requests.  They will lend their expertise as to the pricing and feasibility where necessary, and present them in a combined format to the Cabinet for consideration.

Please remember, if you believe you have any capital needs for next fiscal year, you must go through this process.  If a capital item does not get approved in this manner, it will not be placed on the budget, and spending may not be approved until a future year, or may not be approved at all.

Step 4  Submit requests

Forward the completed spreadsheets to me via email no later than February 28, 2005. Kim and I will compile the information and present it to the Cabinet by the middle of March.  The Cabinet will compare the requests to the initial targets.  At this time the Area Vice Presidents may schedule meetings with the budget managers to discuss the requests. Throughout this process the Cabinet will be in consultation with the Budget Taskforce. Our goal is to finalize the budget by April 1 for approval at the April Board meeting.

Business Case

As stated above in Step 1, if your request is significantly different than this current year, a business case should be prepared and presented along with the request.  The business case should be a brief narrative (1 page) that includes the following things:

        -  How the University benefits by either:
          o      
Expanding the mission – explain how
          o      
Improving effectiveness in process – explain how
          o      
Increasing efficiency – explain how
        -         What are possible consequences of not spending the money
        -         What are the risks to the plan – what could go wrong
        -         What possible revenues could be generated, or what existing spending
              could be cut to fund this request
        -         What alternative plans have been considered
        -          Timing of revenue and expenditures
 

Again, if you have any questions on the budgeting process, please do not hesitate to ask.

Amy Warwick