About Budgeting at SSU:

In reality, Budgeting at SSU may be conceived usefully as a composite of four distinct but congruent processes, as follows:

First: Base Funds. A base operationg budget is annually distributed to each organizational unit. It is automatically rolled forward by the Budget Authority (implemented by the Budget Officer) based on the prior year’s budget for the unit. For convenience, we label this the unit’s “Base Budget.”

The base budget is enhanced automatically (or shrunken, in some cases) by any increase representing blanket merit raise funding authorized by the President or any overall budget reduction as required by the University, the University system, or the Governor’s Office. In recent years the base budget amount rolled forward at SSU has typically included an automatic 3-5% annual increase over the prior year.

The base budget of a unit is expected to cover all normal, on-going assigned functional tasks of the unit (detailed in the Strategic Planner) together with personnel salaries and fringe benefits for individuals in permanent positions previously allocated to the unit.

Ideally, when the annual Base Budget is allocated to a unit, the unit leader in turn allocates it in the Strategic Planner pro-rata across the various functional tasks of the unit so that it becomes clear to all readers approximately what resources each of its several functional task actually absorb. Usually this unit-level allocation process will be somewhat subjective and general—reflecting the relative % of a units’ budget absorbed by each task across a year—in the judgment of the unit’s staff.

Second: Planning Funds. The University’s “Budget Authority” (President and Vice Presidents together with any additional personnel who may be consulted from time to time) may identify a “Planning Budget” annually containing specified funds available from any identified source (as determined by the budget authority). Planning budget funds could be collected by special initiatives from the BOR or collected as hold-backs from the University’s general fund. [Some institutions actually use a rule-of-thumb whereby 5-10% of the institution’s operating budget is withheld annually from automatic roll-forward distribution to operating units and is, instead, deposited into a Planning Fund and made available for the intentional support of new planned initiatives.] For convenience, we label this portion of the budget (however determined) the University’s “Planning Budget.”

Unlike the base budget, the planning budget is not annually rolled forward automatically by formula to organizational units. Instead, the planning budget is distributed item-by-item to support immediate planning objectives for which additional resources have been requested by unit heads and supported by their supervisors. Decisions about which immediate objectives to fund are made by the budget authority based on its view of the relative importance and centrality of each planned objective to the university’s overall well-being and needs. Typically, the budget authority of an organization would rank order all planned objectives requiring new resources and begin to fund from the top down: the most important objectives receiving priority funding; the least important objectives having their funding postponed until subsequent budget cycles or alternative sources of support are identified. Rank ordering is typically based upon a set of objective criteria adopted in advance and disseminated by the budget authority. Disseminating these criteria widely by the institution’s leadership is important because the criteria can be used to guide and channel subsequent planning development by all units in the most desired directions.

In cases where an immediate planning objective requires no new dedicated funds beyond the normal base budget of the unit in which the objective is to be undertaken, the objective may be pursued independent of specific budget allocation. In other cases where an immediate planning objective requires additional enabling funds, it is clear that the approved objective is not under development until such time as the appropriate funds have been allocated from some source.

Third: Reallocated Funds. Besides base budget and planning budget funds, it may be possible to identify and capture available reallocation funds from within the university. Base budget funds already allocated to a unit could be requisitioned by proper authority from one function and unit and reallocated to a new planning objective within the same or a different unit.

For example, a unit head could have available base budget allocated to his/her unit for a funded staff position from which an incumbent retires mid-year. Rather than seek an immediate replacement, it might be possible to redeploy those resources temporarily within the unit to another function—say, new equipment acquisition.

Alternatively, a unit head could conceivably negotiate with his/her supervisor who might possibly redeploy other funds under his/her current authority from some other function or unit to the requesting unit’s use. The operating assumption here is that within the normal hierarchy of the university, any unit head would have ultimate responsibility and authority for disposition of all funds allocated to units reporting to him/her and could, therefore, redeploy funds that in his/her judgment are more urgently needed by another unit or alternate function under his/her supervision.

Fourth: Targeted Grants & Contracts. Beyond the three internal budget sources detailed above, there are always alternative external sources of funding for which staff may apply to specific external agencies. When and if granted by a specific external agency, the received funds will be targeted for a specific purpose (i.e.: goal and objective) and the funds must be allocated to the applicant’s organizational unit to serve those particular ends—independent of internal general fund distribution. Typically such grant and contract funds arrive with associated comprehensive reporting and compliance requirements that are overseen by the University’s compliance officer in addition to the principal investigator to whom the funds have been granted. Title III funds are an example of this type of funding. Once granted, these special purpose targeted funds cannot be appropriated for other university functions or objectives without the explicit formal agreement of the granting authority. Normally, either they must be employed for the purpose granted or else returned to the granting authority.