The 2004-05 school year is not yet over, but school administrators are already trying to put together the university’s budget for the 2005-2006 academic year, even though state legislators have not yet allocated funds for the 23 CSU campuses.

“We’re beginning to operate more like a business,” said Harold Hellenbrand, CSUN provost.

In trying to put together the budget for CSUN, administrators must deal with the absence of funding for increasing costs for technology and staff, “frozen salaries” for faculty and staff, and the time span between the governor’s proposed budget and the legislature’s approved budget, Hellenbrand said.

The budget for the campus, which will be allocated from the CSU system, is based on last year’s budget, including either cuts or increases, Hellenbrand said.

The planning for next year’s budget began in October 2004 and may be finalized by May, but the set budget will not be released until late August or September, Hellenbrand said.

Hellenbrand said there are always adjustments to be made in the prepared budget plan when CSUN receives the set budget.

In the case of a short notice reduction, CSUN was able to fall back on a monetary reserve in previous years, but that reserve is either minimal or non-existent at this point due to the severity of past budget cuts.

“We’ve been walking on a tight rope,” Hellenbrand said. “We try to keep a small revenue for Academic Affairs, but (it has) been eaten away.”

Planning of the campus budget is done by consultations among the president, Administration and Finance, Academic Affairs, Student Affairs, and the various divisions in the university, Hellenbrand said.

“We make a presentation each year to the president and the University Budget Planning Committee to see how it should be allocated,” Hellenbrand said.

The number of students enrolled, and operating costs within the universities, such as insurance, are taken into consideration when building the CSU’s budget, Hellenbrand said.

Although some colleges within the university may have a growth in enrollment, colleges with lower enrollment numbers can still obtain large amounts of funding, Hellenbrand said. But colleges that are underenrolled will probably have their budgets decreased, Hellenbrand said.

That money will then be transferred to the colleges that are over-enrolled. If under-enrollment occurs in certain colleges over a period of a few years, those changes in the funding will become permanent.

Budget planning on the university level must start prior to receiving a finalized budget in order to meet the mandatory needs of the university and make the necessary adjustments later, said Mohammad Qayoumi, vice president and CFO of Administration and Finance.

The difficulty of making adjustments in the budget plan varies each year, based on the economic state of California.

Every campus in the CSU sends a report to the CSU Chancellor’s Office and the Department of Finance and works with them to set enrollment targets for the CSU, which will help set the budget, Qayoumi said.

The enrollment is negotiated with the CSU depending on the budget history for the universities and the demographics of the college-bound population within the universities, Qayoumi said.

One of the challenges of budget planning has to do with not knowing what kinds of changes to expect in the budget, Qayoumi said.

Clara Potes-Fellow, spokesperson for the CSU Chancellor’s Office, said the budget proposal is presented to the Board of Trustees and then to California’s Department of Finance. The governor then presents his proposed budget, which goes through legislation for discussion and debate. The Legislative Analyst’s office makes the final analysis and recommendations. Then the governor receives a set budget. By that time, the governor has more of a precise understanding of the state’s finances and tax collections. It is presented to the governor by the end of June for his signature of approval.

Potes-Fellow said the number of students and programs are taken into consideration for the budget, as well as utilities, insurance, workers’ compensation. The budget does not include any other academic activities.

“The budget considers the basic operation and academic needs,” Potes-Fellow said.

The funding is never enough, but the CSU has to make a budget request that is realistic to the state of California, she said.

“What we present reflects the need of (the) CSU,” Potes-Fellow said. “The CSU makes a request but the legislature decides what we get.”

Individual universities in the CSU system do not make a budget request. They discuss their needs with the budget office, Potes-Fellowsaid.

The planning of the budget request begins in July and is finalized on June 30th of the following year.

What CSUN has done in the past is allocate funds to Academic Affairs to allow them to support the increase in enrollment, but the budget is determined through the university process, within each division. The divisions determine what needs exist, said Ronald Clouse, director of university Budget Planning and Management.

“We have a decentralized budget model,” Clouse said. “We do not have a formula on this campus.”

Once CSUN receives the set budget from the Chancellor’s Office, they can decide to come up with necessary alternatives of how to allocate the funds within divisions in the university, and about what may need to be added or cut.

“There is no formula to approach this,” said Clouse. “(It is a) prototype plan.”

He said they know exactly how to allocate the funds once they know what the set budget is.

“We can’t finalize until we know what our budget is (and) what the impact of that is on us,” said Clouse. “Then there may be some adjustments.”

The time it takes to plan a budget depends on how many changes are to be made.

“There are no absolutes,” said Clouse. “You don’t know what changes (will be made).”

The figure on fulltime equivalent students is the primary driver in the budget planning decision. If the enrollment number is increased, then the budget will increase as well.

Diane Stephens, director of Academic Resources and Planning, said the CSU system allocates funding from the budget to the individual campuses.

The development of the budget plan for CSUN is based on previous budgets, which represent the activities that colleges engage in, and is adjusted according to the enrollment of incoming students, Stephens said.

Stephens said there have been adjustments made because of the state budget crisis.

“At CSUN, our budgeting is an incremental budgetary system,” Stephens said.

Each of the major divisions of the institution and within academic affairs, all of the colleges and units start with their existing base budget, she said. It is then adjusted for changes in enrollment, especially for the years where there was a budget reduction crisis, Stephens said.

There was a $10.7 million budget reduction for academic affairs, for the 2004-2005 and 2005-2006 terms, Stephens said.

In planning the budget, each of the areas in academic affairs submits a plan for the 2005-2006 reductions prepared by the individual colleges and divisions.

Budget planning in Academic Affairs is an “open process,” said Stephens, where all of the deans work together cooperatively.

Stephens said from the divisional level, they look at balancing the enrollment growth across the colleges in the university. In 2005-2006, there will not be a reduction in the budget associated with underenrollment.

Each of the colleges determines their enrollment targets for the individual departments. They work with the dean to develop each college budget.

According to Stephens, Academic Affairs has established budget planning principles on which they operate. First they are to fund faculty, which is related to the number of enrollment so that students will be
served. Then they want to provide funds for operating expenses that are associated with growth in enrollment.

“I think managing in uncertainty is always challenging,” said Stephens. “CSUN has enjoyed a lot of years of growth and those years of budget decline have been challenging for everyone in budget planning.”