PRP 2220 - Planning and Resource Allocation Process
Issued by: Sharon K. Meyer, Vice President for Administration and Finance
Effective: 2001-2002 Budget Year
NOTES: Re-written to replace original PRP 2220. Endorsed by the Forum 3/9/01
Bloomsburg University has merged University planning documents to create the Operational Plan. The Operational Plan provides the framework for activity over three years.
The Operational Plan defines goals and objectives that apply to various units within the institution. It defines primary and secondary responsibility for the coordination of development of action plans that will help us accomplish goals and objectives. The Operational Plan is the framework for the Planning and Resource Allocation Process.
The Bloomsburg University Budget Sub-committee developed the planning and resource allocation process. The charge to this committee, issued by the President, provided basic principles that have guided its development:
- Financial resources must be administered with prudence and integrity
- The Budget process must be open
- Planning must drive resource allocation
- All E and G funds must support the University's mission
- All non-E and G operations should be self-supporting
- Financial management should be decentralized to managers who are then held accountable
- Incentives should be developed to encourage good management of resources
- Base budgets are subject to modification based on performance outcomes
- Capital projects and equipment should be budgeted annually
The Budget Sub-committee addressed these principles and developed processes that allow us to accomplish our objectives. The Planning and Resource Allocation Process will be reviewed annually to address continuous improvement.
Planning and Resource Allocation Model
The model illustrated on Appendix A provides for the appropriate review at each level of authority within the institution. Planning begins at the department level with each department being fully aware of key performance indicators for their respective departments. Key performance indicators will reflect both qualitative and quantitative data. In academic departments, the same indicators will be used across all programs as defined on the Planning and Resource Allocation Model. Planning will drive the resource allocation process. Decision making will be decentralized to allow administrators to manage their respective units. However, the Operational Plan will drive the planning process. The model will provide for accountability and will be supported through incentive programs.
There are a number of different processes that may be used in defining plans. The following describes each of those processes.
Action plans are the primary documents of the Planning and Resource Allocation Model.
Action plans are generated within departments. Action plans must be directly linked to the Operational Plan. Action plans define what an operating unit is going to do to achieve the Operational Plan goals for the coming year. Action plans may or may not require additional resources. The purpose of action plans is to plan. Action plans are not a wish list.
The action plan form allows departments to state the action, identify accountability, identify time frames, identify additional resources required, if any, suggest sources of funding and finally, to define the assessment plan related to the action. The action plan flows through the defined structure based on reporting responsibilities. At each level of review, the responsible individual should determine if the proposed action can be done with existing resources or will require additional resources.
Action plans are prioritized by each Vice President for their respective divisions. Funding of action plans, for those that require additional funding, will be determined by the President and will be announced annually when the budget is prepared.
Action plans should be prepared when the action would substantially address one of the goals or objectives defined in the Operational Plan. It would be impossible to define every situation that might require or not require an action plan. The process in which we are engaged is planning. Action plans will be folded into the Operational Plan to report to the State System, Middle States Accreditation, and others of what we are doing to achieve our goals and objectives. Action plans also allow us the mechanism to breakdown responsibility and define accountability.
The Budget Sub-committee recognized that new academic programs were required to have additional review outside the normal action planning process. A process called "New Initiative Planning and Budget Process" is explained below.
The request for additional resources tied to action plans will receive priority consideration. The new Planning and Resource Allocation Model is designed to link planning and resource allocation. If a request is not tied to the successful completion of a goal or objective, it is not likely to be funded.
New initiatives within academic departments require review above and beyond that described above. The flow chart, Appendix B demonstrates the appropriate review at each level.
Immediate Response Initiative
Occasions may arise where it is necessary to respond to a request from the System in a very short time period. This process provides the parameters of how this response could be coordinated.
Resource Allocation Process
Estimating Sources of Funds - The budget office will prepare a projected source of funds report that reflects adjustments to appropriation, tuition, fee and miscellaneous income. The projections will be based upon approved enrollment projections, assumptions for increase in both appropriation and tuition, and projections for other sources of income based on historical trends.
Adjusted Base Budget
For FY 2001-2002 the beginning base budget will be equal to the beginning base budget as of July 1, 2000. Base budget will include salaries, benefits, operating and capital.
Base budget may be adjusted for the following type of actions:
- Eliminated complements
- Frozen complements
- One-time funding
- Errors and Omissions
- Cost Efficiencies
- Contracted and/or projected salary benefit increases
- Mandated Increases in debt services
- Errors and Omissions
- Projected increases in utilities
All other adjustments must be presented on an action plan and go through the planning and resource allocation process.
Determining Available Funds
The adjusted base budget will be subtracted from the total available sources of funds to determine available resources to address funding requests submitted on action plans. The review at the VP and Presidential level will include examining opportunities for funding through external sources and/or reallocation of existing resources. Some action plans may lend themselves to grant opportunities. Other may be funding through some type of collaborative agreement through other funding agencies within the institution or externally.
Prioritizing and Identifying Funding for Action Plans
Action plans should be prioritized at each level of review. This enables the VP and or President to focus their review only on action plans that provide for the highest chance of achievement of goals and objectives. The University will never have sufficient resources to fund all worthy action plans. Action plans from all divisions will be reviewed and prioritized creating an intuitional list of priorities. The action plans that require additional resources will be funded from the available funds or reallocation of existing funds.
Determining the Projected Budget
All E and G funded action plans will be added to the adjusted base budget. The result will be the projected budget for the subsequent year. The budget will contain contingencies that provide flexibility should the assumptions used in projecting revenue not come to be.
The final budget will be produced as an Executive Summary after final approval of both appropriation and tuition rates. The Executive Summary will be widely distributed and be available in the Library.
Capital Equipment Budgeting Process
Academic Enhancement Fee
The Academic Enhancement fee is the primary source of funding for equipment funding for academic programs and technology infrastructure. Given this is a student fee the allocation of the fee is negotiated between the President and the Students.
E and G Equipment Funds
A certain portion of E and G funds has been designated to be spent on capital equipment. This amount is distributed to each of the Vice Presidents and the President. The allocation of these funds is based upon a review process within each division.
Performance Incentive Funding - The program is intended to provide substantial tangible rewards to departments that aggressively address the Bloomsburg University goals. The total amount of money designated to support this program will be determined each year, during the budget process.
The incentive funds will be available to units based on the proportions of E and G funds received by each of the following divisions. The allocation will be reviewed at the end of each year.
- 70% Academic Affairs
- 15% Administration and Finance
- 8% Student Life
- 2% Marketing and Communications
- 3% Development and Alumni Affairs
- 2% Social Equity
A determination of the amount of money available will be made during the spring budget process for the coming year. The President will hold all funds during the following year until June, when certification is received that the vice President of Director if the units above have achieved the goals as agreed upon with the President for the year under consideration. Vice Presidents and Directors may determine the allocation and distribution of the funds within the units reporting to them. If divisions do not achieve their goals, their allocations will be rolled to the incentive pool for the following year.
Unexpected Carry Forward Program - This is a self-funding program. The University is willing to share any cost savings that can be realized with cost centers including salary savings. Colleges, departments and/or divisions will be able to carry forward 25% of all savings generated from existing budgets from E and G accounts. Upon certification of budget balance at the end of the fiscal year, 25% of the remaining balance will be transferred to a Designated (D) account. Funds will be allowed to accumulate from year to year in the D account.
Use of Incentive Funds - Departments may use the incentive funds that they earn through either of the above programs for program support, student support (student wages or graduate assistantships), temporary positions, matching funds on grants or contracts, equipment purchases and/or professional development activities. Funds will accumulate from year to year and will not be recovered for institutional use. Incentive funds may not be used to create full-time, line-item complements, salary increases or scholarships.