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Policy and Procedure ManualChapter 330, Financial Management and Services Responsible Department: Office
of Resource Management and Planning This section describes the UC Davis operating budget process, adopted during the 1999-2001 budget cycles. For more detailed information, including historical context and rationale behind the process, refer to the comprehensive Operating Budget Process document on the Office of Planning & Budget web site: http://www.ormp.ucdavis.edu/budget/brm/obp/index.html II. Overview of the Budget Process A. Aligning resources with campus objectives The operating budget is the primary instrument for aligning resources available for ongoing annual operations with campus and unit goals and objectives. The UCD budget process allocates limited State growth funds to the campus's highest priorities, allocates non-State funds to their greatest strategic advantage, and provides strategically important programs with resources to ensure success. The process also reflects the unique characteristics and values of the campus, including interdisciplinary collaboration and collegiality. B. Principles Based on the requirements and objectives noted above, the following principles guide the process: fairness, openness, clarity, understandability, stability, consideration of performance, focus on priorities, and balance between centralization and decentralization of responsibility and authority. C. Characteristics of the process The fundamental characteristics of the budget process are determined by the principles and objectives stated above. 1. The process applies only to allocations from the Provost & Executive Vice Chancellor (P&EVC) to deans and vice chancellors. The process does not constrain the discretion of the deans or vice chancellors to establish processes for allocation of their discretionary resources to their departments or programs. 2. The process is primarily incremental in nature. The process accepts a unit's prior-year budget as the base to which incremental funding is added for general support or specific purposes. 3. The process assumes that reallocation of existing funds within units is necessary to achieve success. Successful innovations that advance campus priorities will rely to a significant extent on financial partnerships among deans, vice chancellors, and the P&EVC through a redirection of their existing base budget resources. 4. The process takes an "all funds" approach to resource allocation. In assessing the resource needs of units or programs, the P&EVC will take into account all resources available to a unit for the accomplishment of its missions and goals. D. Components of the process The budget process has annual, biennial, and major program/budget review components that apply to all deans and vice chancellors. 1. Annual component All units receive base budget adjustments for salary range and merit increases funded by the State and Universitywide student fees through established merit evaluation and payroll processes. Resources permitting, the P&EVC allocates to the deans faculty FTE positions and resources for academic support, and provides vice chancellors and the Dean of Graduate Studies incremental allocations of a block grant nature to recognize the increased demands for service and support imposed by growth in academic programs. Other special budget allocations may occur as funds are available, for example, instructional technology, instructional equipment replacement. For core-funded units, the P&EVC will also consider the effects of cost increases related to occupancy of space that is not State-supported and other extraordinary increases in non-salary costs of operation that exceed the rate of inflation. 2. Biennial component Every other year, resources permitting, each dean and vice chancellor may propose modest program-specific budget augmentations for program enhancements. These proposals are evaluated and funded by the P&EVC in consultation with appropriate groups. Successful program enhancements must be extraordinary in nature. 3. Major program review component Every five to six years, deans and vice chancellors will conduct major programmatic and budget reviews of their major departments or divisions. Upon completion of these reviews, deans and vice chancellors will consult with the P&EVC concerning strategies for improvement of the units reviewed, including the resource implications of these strategies. E. General criteria for distribution of available campus funds among major resource pools The P&EVC, following appropriate consultation, will determine each year how incremental resources available to the campus will be allocated (1) among academic, administrative, and student services priorities, and (2) between annual and biennial process components. Three criteria will guide this distribution: 1. General campuswide priorities and goals as expressed through academic and strategic planning processes. 2. Specific goals and parameters for growth and improvement established by units in their most recent academic plans and major program reviews. 3. Specific information about performance and workload reported annually. III. Budget Process for Colleges, Schools, and Divisions Note: Refer to the comprehensive Operating Budget Process document for additional details and examples. A. Annual process 1. Faculty FTE allocation a. General campus. The P&EVC may make incremental changes in a general campus college's, school's, or division's number of faculty FTE and corresponding changes in budgeted faculty salaries and benefits, based on the available resources and the target number of faculty FTE positions stated in the academic plan approved for the college, school, or division. The policy requiring return of faculty positions vacated by retirement (UCD directive 97-101) remains in place. b. Health sciences. The number of faculty FTE for health sciences schools will continue to be determined by enrollment targets established through a separate Universitywide budget process. c. All colleges, schools, and divisions. Deans will have flexibility to allocate growth and replacement positions among departments consistent with their approved academic plan. A postaudit review by the P&EVC, with the advice of the FTE Allocation Workgroup, will periodically assess the outcome of recent recruitments, including an evaluation of contributions by new faculty members to the units' research and instructional workload goals. 2. Academic support allocation The P&EVC will allocate available academic support funds (that is, all expenses of academic units other than faculty and teaching assistant salaries and benefits) to the deans. a. Academic support allocations to the general campus colleges and divisions The P&EVC will distribute 70 percent of funds available for academic support to the deans through a formula that recognizes growth in faculty activity and provides an incentive to increase instruction and research activities. The P&EVC will distribute the remaining 30 percent of funds available for academic support to the deans to address the high cost of instruction in certain disciplines, other exceptional needs, or exceptional performance. The following details the formula for allocating 70 percent of the academic support funds.
Note: Special circumstances. Adjustments in the formula may need to be made to ensure that the growth calculations are fair, for example, in cases where a program moves from one college or division to another, or to ensure consistency from year to year. b. Academic support--Allocations for general campus professional schools and the health sciences Academic support allocation methodologies for general campus professional schools will be developed at a later time. Academic support for the health sciences is fixed on a faculty FTE basis according to formulae established by the UC Office of the President. 3. Other annual allocations Other annual allocations to colleges, schools, and divisions will include, as resources permit: a. Salary and benefit adjustments consistent with University policy. b. Temporary instructional resources. c. Funds for high-cost faculty start-ups, such as facilities renovations and major laboratory equipment, as determined by the existing cost-sharing formula. d. Various allocations for special purposes, such as State special allocations for instructional technology, instructional equipment, and teacher education. B. Biennial process Each dean may propose program enhancements every other year to address new opportunities or significant changes in the nature of work. The P&EVC, in consultation with a Budget Advisory Committee, will review the proposals. A successful program enhancement proposal will: 1. Address high campuswide priorities as well as college, school, division priorities. 2. Support a new program that is an integral and specific part of the unit's approved academic plan or augment an existing program as necessary to ensure the success of the plan. 3. Match the requested campus allocation with: (1) a commitment of the unit's existing core funds (including allocations from the annual budget process), (2) commitment of future resources that can reasonably be expected on the basis of growth, and/or (3) extramural funding. C. Major program review process Every five to six years, deans will conduct major programmatic and budget reviews of the major divisions and departments within their respective organizations. The P&EVC will work with the deans and the Academic Senate to define the nature of these major programmatic and budget reviews and, whenever possible, to coordinate them with the existing program review processes of the Senate. These reviews should include assessment of the department's performance in research, undergraduate and graduate education, service, and outreach. Based on the review for each academic unit, the P&EVC and the dean will determine the steps necessary to maintain or improve the unit's performance over the next five years, including potential base budget adjustments. IV. Budget Process for Administrative and Student Services Units Note: Refer to the comprehensive Operating Budget Process document for additional details and examples. For the purposes of the budget process, administrative (including academic support services) and student services units include the following (at the vice chancellor or dean level): Office of Administration, Offices of the Chancellor/Provost, Graduate Studies, Office of Research, Student Affairs, and University Relations. A. Annual process 1. Resources permitting, the P&EVC will provide incremental block grant allocations to the vice chancellors/dean to recognize the increased demands for service and support imposed on administrative and student services units by growth in academic programs. The P&EVC will determine the amount to be allocated for these purposes by considering specific information about changes in performance and workload reported annually. For core-funded units, the P&EVC will also consider the effects of cost increases related to occupancy of space that is not State-supported and other extraordinary increases in non-salary costs of operation that exceed the rate of inflation. 2. In the past, the UC Office of the President has made special designated or restricted allocations for specific purposes, such as development administration, deferred maintenance, library support, operation and maintenance of plant, and student outreach. The campus will continue to distribute any available designated or restricted allocations of this nature to the appropriate units. B. Biennial process 1. Each vice chancellor/unit head of an administrative or student services unit may propose modest program enhancements to address new opportunities or significant changes in the nature of work. The P&EVC will review the proposals and evaluate them with advice from the Council of Deans. A successful proposal will: a. Address high campuswide priorities as well as the vice chancellor's or dean's highest priorities, as expressed in the proposing unit's most recent major program reviews. b. Support (1) an initiative that directly advances the teaching, research, or public service activities of the campus through the initiation of new programs that have a campuswide focus; (2) a program change that increases the efficiency or effectiveness of the infrastructure that indirectly supports the campus's teaching, research, and public service activities; or (3) a program change or new program to ensure that the campus will successfully meet major new regulatory mandates. c. Require an infusion of resources that cannot be achieved through a combination of (1) allocations from the annual budget process, (2) redirection of existing core funds, and (3) extramural funding. C. Major program review process On a five- to six-year cycle, the vice chancellors/dean will conduct a major programmatic and budget review of each major division and department within their respective organizations using the Administrative Unit Review framework (UC Davis Policy & Procedure Manual Section 200-30). Based on the review for the administrative or student services unit, the P&EVC and the vice chancellor/dean will determine the steps necessary to maintain or improve the unit's performance over the next five years, including potential base budget adjustments. Questions regarding the operating budget process should be directed to the Planning and Budget Office, (530) 752-5318. Copyright © 2006 The Regents of the
University of California, Davis Campus. All Rights Reserved. |
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