Budget update: July 29, 2020
July 29, 2020
— by Dan White, chancellor
In all that is going on, with the start of the semester, changing COVID-19 conditions
and transitions in system leadership, there remains a focus on the budget. We continue
to put thought into the actions that need to happen at ÓÐÁϺÐ×ÓÊÓƵ and across the system to
meet the drop in state resources. My Core Cabinet and I will be holding a budget strategy
meeting to line out a process for putting together the FY22 budget. But for now, a
big thank-you to everyone for the final closeout of FY20. ÓÐÁϺÐ×ÓÊÓƵ finished the fiscal
year with nearly a 3% unreserved fund balance (UFB) on unrestricted funds (Fund 1).
That is in line with our guidance from Statewide, which is to be between 2% and 4%.
For people not normally engaged in budget discussions, UFB is an important number.
ÓÐÁϺÐ×ÓÊÓƵ manages approximately $400 million each year in total budget from state, federal,
and interagency and unit transfers. We are required to manage this to end the year
with a remainder that is 2%-4% of our unrestricted operating budget. That is no small
task and takes the effort of many. ÓÐÁϺÐ×ÓÊÓƵ has normally managed UFB on the low end of
the range acceptable to the Board of Regents because a large balance at the end of
the year suggests to some that we could do with less, or that we have missed opportunities
to invest in key initiatives over the course of the year. Because of changing financial
conditions, we are now targeting 4% UFB on the maximum end of the range, allowing
for greater flexibility to meet future needs. All units are encouraged to target the
maximum level of UFB by the end of FY22.
This year the BOR and UA president asked each university to review tuition in the
context of our budget and to propose a new tuition rate if change is warranted. Your
vice chancellors and the Tuition and Fee Committee have been looking at a consolidated
tuition and fee structure since the spring of this year. The ÓÐÁϺÐ×ÓÊÓƵ consolidated fee
was put into effect for fall, and a price sensitivity analysis is underway that will
inform ÓÐÁϺÐ×ÓÊÓƵ’s tuition proposal for the next academic year. The consolidated fee simplifies
our student bill and makes it easier for both our prospective students and our current
students to comprehend the total cost of attendance and financial aid they are receiving.
There will be more to share in this area and opportunities for student and employee
input as tuition plans take shape.
This fall we will begin the second half of our expedited program review requested
by the Board of Regents. During fall 2019 and spring 2020, we reviewed half of our
programs, and this fall we will look at the other half. , this review allows for an expedited, exceptional program review process tailored
to ÓÐÁϺÐ×ÓÊÓƵ’s particular financial circumstances. The expedited review will focus on department
and program enrollments, cost effectiveness, academic quality, and centrality to ÓÐÁϺÐ×ÓÊÓƵ’s mission. Some of the dates and time periods are changed to allow for additional feedback
but the process will look very similar. I will be sending a separate communication
about the expedited program review on Friday, July 31.
FY22 also brings the third and final year of the governor’s compact agreement of $70
million in total budget reductions systemwide. Budget reductions have shifted many
things on campus, which haven’t been easy. FY22 planning assumptions are being refined
at the UA level. Informed by the Core budget strategy session next week, I will release
guidance in mid- August for deans and directors to begin FY22 budget planning, with
a deadline of mid-September. ÓÐÁϺÐ×ÓÊÓƵ’s plans for meeting the FY22 budget will be discussed
at the November Board of Regents meeting.
Thank you to everyone for your continued efforts and work as we seek new and innovative
ways of conducting business and managing reduced budgets.
Thank you for choosing ÓÐÁϺÐ×ÓÊÓƵ.