Budgeting

Introduction

Every chair and program director is responsible for the accurate, timely, and cost-effective management of his or her unit's budget and resources in accordance with Federal, State, and University policies and procedures.  The budgeting process requires that chairs be able to accurately forecast their departments' annual budget needs, taking into account enrollment goals, faculty salaries, service and supply costs, graduate student support expenses, grant income, fund transfers, and other, sometimes unknown, factors.  It is also necessary that chairs manage their budgets so that they do not end the fiscal year in debt.    

Here are some facts about budgeting:

• Budget planning usually begins in February or March of the year before.
• Although the State of Oregon operates on a two year budget, Portland State University operates on an annual budget.
• The fiscal year is from July 1 to June 30 of the following year.
• The budget year is determined by the year in which the budget ends.  For instance, the 2006-2007 budget is referred to as the 07 budget.
• All departmental and program budgets must be balanced at the end of the fiscal year.
• Chairs have considerable autonomy in budgeting and expending their units' funds within the limits established by the University and the Dean's Office.  However, budgetary decisions that require a change in the department's basic allocation, including faculty salaries and major equipment purchases, must have the prior approval of the Dean's Office. 
• Chairs should work closely with the CLAS Fiscal Officer.

CLAS Department Budget Spreadsheet

The CLAS departmental spreadsheet is the basic budget document showing department resources, income, and expenses (see attached budget of a fictitious department, Budget Form).  Across the top of the spreadsheet are the budget categories -- faculty salaries, OPE, student expenses, etc. -- and along the side are individuals or items from which the budget receives its money or on which the resources are spent. 

CLAS Department Budget Spreadsheet Items:

Resources:

The first section of the departmental budget form lists the various income or resources available to the department during the budget year.  Some of these resources come from the university base budget, some from CLAS, some from other units in the university, and some from the faculty-generated activities.  The following are the basic income or resource categories:

• Base Budget:  The first section of the budget document is the department's base budget.  The base budget is the part of the budget that is in the University's recurring budget, that is, the part of your budget that is fixed and paid for by the university.  (To see your base budget for any year, you can go to the FADM Budget website (http://www.bud.pdx.edu-- click on Budget Exhibits, then click on the year you want to look at, and then go to Summary by Program).  The base budget usually includes the tenure-track faculty, the chair's salary, maybe office support staff, and services and supplies.  The base budget of the sample CLAS Department Budget Spreadsheet linked above is $691,192, and consists of unclassified salary, classified salary, student pay, GTA Salary, OPE, services and supplies, and half of the chair's salary.
  
• Other Fund Sources:  The Other Fund Sources are resources that are expected to come into the department during the year.  These can include many sources: money from grants or contracts for course buy-outs, budget transfers to your department from University Studies, or other income.
  
• CLAS Funds:  This is money transferred to the department from the Dean's reserve fund, which is misleadingly called the Access Fund.  This fund consists of resources the Dean's office receives from OAA or other sources to supplement the base budget, so that departments can accomplish those tasks that the base budget and the other funds do not cover.  The access funds are generally allocated for covering extra course sections to meet enrollment goals, but also may be given to cover other departmental expenses.  The amount a department receives from the Dean's reserve is determined each year by discussions with the Dean's Office, and depends on the department's goals and needs and the availability of funds. 

Expenses:

The second section of the budget lists the departmental expenses.  Expenses include the following items:

• Base Budget Expenses:  These are the expense items that are in the base budget.  They usually include your tenured faculty, any office support staff included in the base budget, the chair's salary, and services and supplies.  Some departments have additional base budget items, such as lab support and student stipends.  The amount of base budget expenses should usually be the same as the base budget resources.
• Non-Base Expenses:  These are those expenses that you expect to incur that are not covered by the base budget.  They include most of your fixed-term faculty, TA and RA stipends and tuitions waivers, and any additional expenses.

Budget Planning:

Budget preparation and planning for the academic year begins in the winter of the year prior, usually in February.  To begin building their departmental budgets, departments are given an enrollment goal for the coming year and asked to plan their course offerings so as to reach that goal. 

Estimating Instructional Expenses:  Since the largest expense in most departments is the teaching of courses, the first step in the the budget planning process is for each department to project the courses it will offer in the following year to meet its enrollment goal.  This is done using a grid (see example of course planning grid). On the departmental Course Planning Grid, each department lists which faculty will teach which courses for each term of the following year, how many students enrolled in these courses in the past and how many will enroll in the following year, whether TAs are to be used for the course, who will pay for the courses (i.e. will the course be covered in the base budget or will other funds pay for the course).  This information helps the department and the College determine how much money the department will need to meet its enrollment goal.

Other Expenses:  To plan for the following year's budget, chairs must also be able to estimate expenses.  This requires knowing who may be going on leave or sabbatical, how many adjuncts will be needed to cover the sections projected in the grid, any expected increases in services and supplies, how many TAs or RAs are required, etc.  Some issues, such as changes in faculty salaries and OPE (Other Personnel Expenses) may effect your departmental budget, but these issues are mostly out of our control.

Additional Income:  At the budget planning stage, departments also need to estimate additional income.  This can come from grants and contracts that will bring money into the department, fund transfers from other units, and income from other sources

Projected Request from Dean's Reserve:  Once you have calculated how many courses you need to offer, how much your base budget is, how much additional revenue you expect, and how many additional expenses you expect, you should know how much you need from the Dean's reserve fund.  It is important to note that the Dean's fund does not even come close to meeting all of the requests from departments for help.  Therefore, you should always understand that there will some amount of negotiating between you and the Dean regarding your budget.  There is simply not enough money for each department to have what it wants.

Budget Managements

Once a budget has been established for the department, it is important that the department stay within that budget.  If adjustments to the budget become necessary during the year (for instance, because of the loss of expected income or the need for additional sections), the chair should work closely with the CLAS budget officer to restructure the budget.

Unclassified Salaries: 

In most departments or programs, the greatest expense is faculty salaries.  Faculty salary rates are determined through collective bargaining or by salary ranges established by the Finance and Administration Office, and are largely out of the hands of department chairs.  Here are some things to know about managing the salaries of the departmental faculty.

Tenure-Track Faculty:  The salaries of the tenure-track faculty are generally determined by collective bargaining.  The only time chairs are able to play a role in the salary levels of tenure track faculty is during the hiring process, or on those rare occasions when money is available for salary increases.  Once a tenure-track faculty member's salary has been established, any changes to the base rate occur through collective bargaining or through promotion.  For the salary ranges of tenure-track faculty, see Article 30, Sections 2 of the Collective Bargaining Agreement.  Tenure-track faculty teach on a 24 credit-hour basis.  That means they receive 16.78 percent of their faculty base pay for each four-credit course taught.

Fixed-Term faculty:  The salaries of the fixed-term faculty are also determined by the Collective Bargaining Agreement (see Article 30, sections 3 and 4).  Instructors teach on a 36 credit-hour basis.  That is, they receive 11.12 % if their salary base for each four-credit course taught.

Adjunct Faculty: The adjunct faculty are represented by the American Federation of Teachers Union.  Article 12 of the PSU-AFT Collective Bargaining Agreement describes the salary minimums that are to be used for adjunct teaching and research faculty.  The salaries listed are on a full-time basis: adjunct faculty teach on a 45 credit-hour basis.  This means that they receive .09 % of their salary base for each four-credit course taught.

Graduate Student Stipends and Tuition Remissions:  Departments with graduate programs may also have the support of graduate students in their budgets.  These positions, usually labeled Graduate Assistantships, or GAs, are usually for teaching assistants (TAs), or for graduate research assistants (GRAs), and the students usually receive both a stipend and a tuition remission.  The budget for these positions can come from several sources: grants or contracts, base budgets, or from the Dean's Reserve.  Tuition remissions, if not funded through grants or contracts, are paid for with funds that come from the Office of Graduate Studies to CLAS.  Since the amount the College receives from the Office of Graduate Studies is dependent on how many GAs were given tuition remission the previous year, it is important that department use the money given to them for tuition remission on tuition remissions.

The salary rates, or stipends, for each year are listed on the FADM website (see Graduate Assistant Stipends).  These stipend amounts are given at both the fulltime 9-month rate and the fulltime 12-month rate.  However, GAs must be appointed for at least a 0.15 FTE, and for no more than .49 FTE.   

Purchasing and Contracting:

Purchasing and contracting procedures are discussed in Section III.  This is an area where departments can easily get into trouble, so it is strongly suggested that chairs read the purchasing and contracting webpage of the Business Office.  In addition, since these procedures and policies change from time to time, chairs are encourage to attend the Administration Briefings sponsored quarterly by OAA. 

Travel:

The Univerisity provides funding for travel to conferences and professional meetings for faculty with .50 FTE appointments or higher.  The Faculty Development Committee awards these grants, but the Committee only meets once a term, so applications for travel funding must be submitted several months in advance.  Information on travel funding for faculty, including application procedures and deadlines, can be found on the Research Administration website.

Banner

It is important to keep track of your department's budget during the year.  In general, you should know where and when money is being spent and how it is coming in.  The Dean's Office strongly recommends that you keep good books on expenses and income, and not rely on the university bookkeeping system.  It is useful, however, to be able to go online to check your departmental budget.  You can look at your budget on the Banner FIS system, or through GQL.  Both systems are reporting the same information.  However, you should be warned that, for the uninitiated, the Banner system is difficult to navigate and difficult to understand.  It requires that you know specific account, organizational, and expense codes.  In addition, debits or credits to your budget sometimes occur long after these transactions take place, so what you see on Banner may look nothing like what your current budget actually is.

For those still not discouraged, there are a number of workshops on how to use Banner FIS and GQL.  See the OIT Website for times and locatons.

Financial Regulations and Financial Irregularity Policy

ORSs and OARs carry the force of law. In addition to this legal framework, OUS has developed its own Internal Management Directives (IMDs) detailing universal policies governing its operations. Portland State University also has developed its own IMDs governing its operations.

In addition, PSU has contractual obligations regarding personnel issues in the arenas of collective bargaining (AAUP contract, AFT contract, OPEU contract). Its faculty also has its own governance structure, as set forth in the Faculty Constitution. As such, actions taken by PSU employees must conform with applicable contractual obligations as well as PSU's legal and regulatory framework.

It is particularly important that department chairs understand the section of the PSU Internal Management Directives that deal with financial irregularities (Section 1.500 of the IMDs).  It is very important that unit chairs read and be aware of the financial irregularity policy, since several departments gotten into difficulty because of these specific policies.  The policies include both definitions of financial irregularities and rules on reporting financial irregularities or suspected irregularities.  It also includes a provision that protects "whistle-blowers." 

Financial irregularities include any intentional misstatements or omissions of information related to financial transactions that are detrimental to the interests of the campuses or system. These may include violations of relevant Federal, State, OUS or campus laws, rules, and procedures. These acts include, but are not limited to, embezzlement, fraud, and forgery or falsification of reports, documents, or computer files to misappropriate assets. "Suspected Financial Irregularity" is a reasonable belief or actual knowledge that a financial irregularity is occurring or has occurred.
"Responsible Unit" is a recognized functional or budgetary unit within the organizational structure of the institution.  If you know of or suspect any financial irregularity, you should contact the Dean's Office immediately.

Below is the a table that summarizes the financial irregularity policy.