Section 4D: University Budget Development

University Budget Development

At Boise State University

Overview

The operating budget at Boise State University is the result of processes external and internal to the university. The external process that drives budget development is the Idaho state budget process. As an institution of Idaho state government, Boise State University is inextricably linked to the state budget cycle. Internal processes must be coordinated to adjust and align unit budgets and also to allocate new resources among competing university needs.

Preparation

On the state level, the budget preparation process for the university’s operating budget begins twelve to fourteen months prior to the time it will be implemented. Annual Budget and Planning preparations generally begin six to nine months prior to this deadline.

Guidelines

Budget guidelines are prepared by the State Board of Education and coordinated with the Governor’s Division of Financial Management, the Legislative Budget Office and the Financial Vice Presidents of Idaho’s college and universities.

Budget Categories

In preparing budget requests, there are two broadly defined categories of increases that are considered. The first category is Maintenance of Current Operations (MCO), which is intended to sustain existing programs by providing funds to offset inflation. The second category is Requests Above Maintenance of Current Operations, often referred to as Enhancement Requests, which are anticipated costs of new programs, expanded services or non-recurring projects.

Maintenance of Current Operations (Mco)

Funds for Maintenance of Current Operations are funds needed to continue existing levels of services. MCO funding is usually determined by applying a percentage increase that is associated with inflation for a category of expense. The MCO increase to maintain competitive salaries is referred to as Change in Employee Compensation (CEC). Other MCO funding may be provided for fringe benefit cost increases (primarily health care insurance costs), utility cost increases, increases in insurance premiums, library acquisitions, equipment and general operating costs. Also included in the category are funds for Enrollment Workload Adjustment (EWA). The Enrollment Workload Adjustment is intended to provide additional funding to offset the costs of growth.

Requests Above Maintenance of Current Operations

The Requests Above Maintenance of Current Operations (previously called ‘Enhancements’ and recently renamed ‘Line Items) are prepared by the Vice Presidents, based on budget request information from their respective Deans and department heads. Their recommendation is sent to the President. When the president has reviewed the recommendations and approved the final budget request, it is then submitted to the State Board of Education.

State Board Budget Approvals

The State Board of Education reviews the budget requests of the college and universities at its August or September meeting. After the Board reviews and approves the requests, they are submitted to the Division of Financial Management and the Legislative Budget Office so that they may prepare the Governor’s Budget Recommendation and the Legislative Budget Analysis. The Governor presents his budget recommendations to the Legislature when it convenes in January. The legislative session generally runs until the end of March. The college and universities appropriation is very large, and so it is often one of the last to be approved. One lump sum for the college and universities is appropriated to the State Board of Education. The Legislature may recommend that some of the funds be allocated for specific needs or special programs, or it may impose restrictions on the use of the funds.

Board Allocations

The allocation of funds to each institution has historically been decided at the March or April meeting. The basis for the allocation depends on whether any restrictions or recommendations have been placed on the funding approved by the Legislature, such as salary guidelines, specific program allocations, etc. The Board may also target specific allocations or impose additional restrictions.

Implementing the Operating Budget

When the allocation for Boise State University has been approved, the university’s Vice Presidents make recommendations to the President for allocations of any new or additional resources. Continuity of the requests is maintained through the Annual Budget and Planning process that links budgets with strategic initiatives. After the President’s approval, the Budget Office calculates and assembles departmental budgets. Upon completing this exercise, the entire document is submitted to the State Board for final approval at the June meeting. The budget goes into effect on July 1 – the start of the fiscal year.

For more information please contact

Ken Kline, Associate Vice President, Office of Budget and Planning, at (208) 426-1344 or kennethkline@boisestate.edu

Irene Pedraza, Director of Budget Administration, at (208) 426-1277 or irenepedraza@boisestate.edu