Financial planning guidelines are being distributed this week to all university budget managers at the outset of a process intended to reallocate at least $1 million a year over the next five years to the general fund balance, the university's operating reserve fund.
Another goal is to reallocate up to $3 million in annually recurring funds to the instructional budget in Academic Affairs. Other funds also could be reallocated in keeping with university priorities.
The reallocation process is to be complete by early March, in time to be reflected in the university's 1995-96 budget recommendations to the Board of Trustees and the Legislature.
Each budgetary unit in the university is being asked to describe how it would make use of funding increases of 5 percent and 15 percent—and how it would absorb budget reductions of 5 percent and 15 percent, based on actual expenditures in 1993-94 of general, auxiliary and designated funds. Restricted funds, which are not considered subject to reallocation, will be excluded from the review.
Each unit's recommendations for prioritizing possible budget adjustments will be passed on via deans and directors to the appropriate vice president, who will be responsible for devising prioritized division-wide lists of possible enhancements and reductions, each totaling 5 percent or 15 percent of the division's 1993-94 expenditures.
The University Budget Committee is scheduled to review each division's prioritized lists and use them as the basis for recommending 1995-96 budget reallocations. The Budget Committee, chaired by the president, includes each of the vice presidents and the athletic director. The university comptroller and treasurer and the director of institutional research provide staff support.
A primary objective of the new financial planning procedure is to pump up the university's general fund balance, which currently stands at about $4.3 million, or about half of the 30-day operating reserve specified by state law.
The general fund balance has dropped from $10.6 million in 1990 as a result of a combination of state budget cuts absorbed by the general fund, decreases in tuition revenue and investment income, and transfers to cover unbudgeted expenditures, said Leah Norman, acting vice president for business affairs.
At the same time, surveys suggest that the university's instructional budget is receiving a smaller share of the overall university budget than is the norm at peer institutions.
The process beginning in earnest this week, following extensive discussions last fall by the Budget Committee, aims to rectify both problems.
This World Wide Web version of MSU Memo was modified and updated by Chris Brown.
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Last modified: Friday, 14-Jun-2002 15:58:59 CDT.
URL: http://msuinfo.ur.msstate.edu/msu_memo/1995/1-12-95/budget.htm
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