budget reduction strategies higher education

There are usually a lot of good ideas within any budget unit, and finding a way to harness those ideas to develop a coherent plan for the unit is invaluable. • Budget reductions should have minimal impact on student success including recruitment/access, retention, persistence, transfer ease, and timely completion of degree. Once you know the institutional strategy ask for suggestions from your colleagues on how to implement it. This section describes issues influencing an institution's choice of approach and discusses various strategies commonly employed by institutions in considering and implementing budget reductions. What is gained and what is lost through any restructuring move? If such approaches are discussed then a careful analysis needs to be made of whether the additional revenue is enough to offset the costs of collecting the new fee. Is that a good strategic strategy for the institution to take? Strong legal advice is needed, and the institution needs to have straightforward conversations with union representatives when termination is possible. There are many possibilities. The budget reduction plans are due to the Legislative Budget Board and the governor's office by June 15. Budgeting in Higher Education examines the budget process as faced by colleges and universities in what is an increasingly complex educational environment. When all else fails a unit budget manager must be prepared to make difficult decisions, including termination of employees. Failure to follow the provisions of the contract for termination involves potential for lawsuits and work stoppages. . Establishing and implementing new processes and procedures and examining all aspects of the financial management of the institution is another way to approach restructuring. Colleges and universities are under constant. 3 Tips for Increasing Law Firm Profitability Fortunately, energy cost reduction is another area where technology can help pinpoint inefficiencies in both usage and spending. A careful strategy for dealing with the situation is critical and must involve senior academic administrators, department chairs, and faculty governance groups. © Copyright 2020. . In addition, some institutions choose to bring in expense reduction consultants to find additional savings on print and copy expenses. When faced with such circumstances it is critical that the administrator and budget manager get advice from human resources and sometimes from institutional legal counsel. Do the institutional policies (accounting, wage scales, and personnel policies) cause costs to be higher than if the service was contracted? Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 [www.josseybass.com] Copyright (c) 2011 by John Wiley & Sons, Inc. All rights reserved. Although it might seem like a minor issue, print and copy costs can snowball into a major expense. And while some colleges and universities struggle to stay on top of their finances, managing a budget for a higher education … 8. A budget freeze is not really a budget reduction, but it may be perceived as one by faculty and staff members in the trenches. The best we can do is u… Wise unit budget managers and administrators are prepared for such requests by assuring that they have good evaluative data on the effectiveness of such programs and activities. Additional complications occur in termination if the individuals involved are protected by tenure. Underlying assumptions for choosing a specific strategy must be tested so that decision makers are assured that they are making the best possible choice. Whatever form budget reduction takes at their institution, there are a number of strategies that unit administrators and budget managers can adopt that meets the institutional goal while dealing with faculty, staff, and students in the most humane way possible. Vendors and service providers place bids online and purchasing staff can manage the entire process via an easy to use dashboard. Examined the perceptions of academic administrators and student affairs administrators as related to budget reduction priorities and successful downsizing strategies at institutions of higher education. The money recaptured from such cuts is used to offset financial problems within the institution or as a tool to avoid deficit spending in the current fiscal year. There may be individuals, for instance, that would welcome a ten-month appointment as opposed to a twelve-month appointment. 3. As part of considering where targeted reductions are to take place, units are asked to justify their expenditures on specific programs and activities such as symposia, retreats, and training. In addition, staff colleagues may have suggestions that will not save a great deal of money but are symbolic of their commitment to help confront the issue. All institutional budget managers should be prepared to provide the data needed to make decisions and should do so in an honest and straightforward manner. This is not a set of circumstances where a manager can act alone. Evaluate any strategy … Even if you do not yet fully know what is going on, let staff and faculty members in the unit know that. Earlier in this volume a suggestion was made to build a contingency fund into the budget for each administrative or program unit. • UW will continue to place the … One of the most useful ways to aid colleagues in a time of uncertainty is to provide clear information to them as rapidly as possible. Documenting the circumstances necessitating reductions, the process employed in addressing that necessity, and the outcomes of that process can be as simple as a thorough set of notes in an electronic or paper file, but having that information handy could prove invaluable at some point in the future. The elimination of programs is never an easy decision but it may be the prudent decision for an institution to make. See, for example, Steven W. Hemelt and Dave E. Marcotte, “The Impact of Tuition Increases on Enrollment at Public Colleges and Universities,” Educational Evaluation and Policy Analysis, September 2011; Donald E. Heller, “Student Price Response in Higher Education: An Update to Leslie and Brinkman,” Journal of Higher Education… Under a performance–based budgeting model, an entity such as a university or a state government sets expectations, then makes budgeting decisions based on performance relative to those benchmarks. There may be others who would like to reduce their status from full time to three-quarters time. One of the government’s biggest budget proposals for the education sector is an investment in a new sports complex at the University of Malta. Financial exigency is a special case for an institution when reductions involve tenured personnel. The budget reduction for NSHE totaled $160 million for the two … Organizational restructuring can be a very painful and difficult process. This option should be carefully discussed with decision makers prior to soliciting information from potential vendors. Battered by the coronavirus and the related drop in state revenues, Gov. An important step in managing budget reductions at the unit level is to identify and reduce financial commitments to nonessential items. Although that is a rational approach to the situation, unfortunately, most often budget managers must respond very quickly to an institutional fiscal problem. ... agencies and higher education institutions to cut their budgets by 5% for the 2020 … Can the quality of service be maintained or improved? When budget reductions occur, morale is a key issue to confront. Such actions can include providing short-term sabbaticals for faculty, leaves with partial pay, furloughs, early retirement packages and leaves without pay, reduction in the number of hours worked, tenure buyouts, and severance packages. Goldstein (2005) urges institutions to routinely plan for budget reductions. Attracting students to your college or university is an expensive, time-consuming endeavor. Outsourcing or hiring contract services for certain functions may be a means to reduce expenses. Whatever form budget reduction takes at their institution, there are a number of strategies that unit administrators and budget managers can adopt that meets the institutional goal while dealing with … Dear Students, Faculty and Staff: A few weeks ago I updated the campus community on the college’s financial planning. Managing under difficult circumstances, such as during budget reductions, becomes even more complicated if the manager is not seen as consistent in his or her dealings. • Budget reductions should have minimal impact on student success including recruitment/access, retention, persistence, transfer ease, and timely completion of degree. • UW will continue to place the … Four Strategies for Controlling Cost in Higher Education. Think creatively with colleagues within the office and the office across the hall. A freeze is often used as an interim step while institutional decision makers are attempting to determine the best course of action for the institution. The resulting impact of the across-the-board strategy is that the reductions are felt differentially within the institution and programs critical to the mission of the institution are not protected. We may be entering a new year, but for many organizations, budgeting is a constant concern year-round. Are actual dollars going to be generated that can then be reallocated? Is the service to be outsourced part of the strategic vision of the institution? Toleration for risk will have a great influence on the budget reduction strategy chosen by the institution. In times of budget reductions (which by definition are times of uncertainty), information will constantly change. It is also equitable, in one sense, since all budget units within the institution are treated alike. At the beginning of every budget planning period, the previous year’s budget for … This process allows … © Stanford University, Stanford, California 94305. 0 0 . Such funds can be the first tapped to respond to a financial emergency at the institutional level. It is from Chapter seven, Managing Budget Fluctuations: Institutional Approaches to Budget Reductions, in the book, Budgets and Financial Management in Higher Education, by Margaret J. Barr and George S. McClellan. Consideration might be given to charging for services that were formerly free or adding a service fee to transactions. Reprinted with permission. Dickeson cautions that it may be necessary to phase in the program elimination until such issues can be satisfactorily resolved (Dickeson, 2010, p. 134). Don't Be Afraid to Make Difficult Decisions. 5. It is particularly difficult to make a termination decision when a union contract is in place. When required budget cuts occur your managerial options become more limited. If you currently use an. Non-profit managers can’t do much to affect the financial health of the foundations that grant them money or individuals who support them through donations. The Nevada System of Higher Education's (NSHE) budget reduction proposal through the fiscal year 2021 totals nearly 20%. When such events are considered a number of critical questions must be considered. While I love the feeling of getting the highest impact for the lowest cost, there really is a time to invest higher … The posting below looks at a range of institutional approaches to budget reductions, something of considerable interest to faculty, staff, and students as well as top administrators. Not every idea will work for all institutions. Obviously the decision to outsource should not be entered into lightly. The personal integrity of the budget manager is one of the few \"coins of the realm\" that a manager possesses under such circumstances. The university’s executive leadership team will take a 10 percent salary reduction… If a decision is made to eliminate an academic program careful attention should be paid to the students currently in the program and an assessment made of what is necessary to help them complete their degree aspirations. Although education is a state subject, the job of the Centre is to set an example for all states, so that they spend more on education. Voluntary reductions only occur as a solution when everyone understands the gravity of the situation. However, there are common forms of budget reduction employed by colleges and universities. 4. Letting someone go is never easy, but it is much more difficult when it is caused by forces and situations outside of the control of the employee or the manager. Is it necessary for all departmental computers to be replaced in one fiscal year or will replacing only some suffice? Priorities change as do interests of students in majors and degrees. 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