The Internal Funding Process
THE FUNDING PROCESS
This planning process will implement a new methodology for funds allocation. The methodology to be utilized by Pace University for the development of the 19XX-XX budget will include the following features:
Funding Allocation Features (See Section 4):
- Academic/administrative areas that generate revenues will receive those revenues from operations (such as food service, vending, book stores, residence halls, etc.).
- A portion of revenues will be split for Revenue Sharing Programs, Alternative Pricing Programs, Venture Capital Programs, and related activities. Indirect costs from grants, net revenues from economic development activities, and net revenues from other sources/activities will be split 75% academic/administrative area / 25% general university. The net calculation will include all costs for overhead. Balances can be carried over from year to year.
- A lump sum amount (base budget funding) of general fund dollars will be made to each academic/administrative area for general support (for full time faculty, staffing, maintenance, utilities, non-personnel expenses, equipment, space allocated costs, etc.) to supplement the aforementioned revenues. This amount will be based upon the current allocations of resources during the early implementation years. During later years it will be based upon the academic program plans and the administrative plans, and specific program cost outcome models. Over time, this amount will take into account: a) a staffing model standard and a ratio of FT faculty to PT faculty standard/target; b) enrollments and target class sizes; c) plant age & equipment age; d) plant size; e) programs offered and special programs. The total amount of this allocation will vary from year to year based upon total revenues available and changes in the above-mentioned factors.
- Academic/administrative base budget funding will be adjusted by a "workload to marginal cost factor." This cost factor will be estimated at the beginning of the planning period and then adjusted for actual workload indicators. It represents a dynamic budget adjustment based upon workload indicators to recognize the marginal cost components. The best example is a marginal cost adjustment factor for credit hour enrollment. A fixed dollar amount per credit will be multiplied times the change estimated in enrollments at the beginning of the planning period (for budget planning purposes). That same calculation will then be made at the time that the actual enrollments are known (semester count date). Thus this will be a dynamic adjustment to the budget. The first year of implementation will primarily address enrollment-based marginal cost issues. This adjustment will cover the marginal costs of operations.
- In addition to the funding factors itemized above, academic/administrative areas can request additional funds for new programs. "Decision Funding Request" proposals will be prepared and submitted as a part of the planning and budget process. Approved "Decision Funding Requests" are allocated to academic/administrative areas for specific programs/projects and may or may not be included in the long term base budget for the academic/administrative area based upon the nature of the request. This process for requesting additional funds will include an identification/examination of base budget priorities and proposed shifts within the base budget.
- Future funding factors will include factors based upon outcomes realized and also on excellence/quality program awards.
Academic/administrative areas can carry over balances of non-personnel funds based upon the following schedule:
- $ 0 to $ 250,000 - 100%
- $250,001 to $ 750,000 - 75%
- $750,001 to $1,000,000 - 50%
- over $1,000,000 - 25%
The carryover will be determined by the amounts reflected in the annual audit. The overall limit which can be carried over from year to year will be the greater of 5% of the unrestricted general operating funds as published in the latest operating budget or $1,000,000. If an academic/administrative area has a deficit in any given year, the deficit will first be deducted from any prior year carryover balances, and the remainder will be deducted from the current year budget. The carryover funds can not be utilized for ongoing expenses or permanent salaries. The plan for the utilization of carryover funds must be approved by the President in advance of expenditures. If there is a university-wide financial emergency, the funds may be used at the discretion of the President.
THIS INFORMATION WAS TAKEN FROM THE FINANCE AND ADMINISTRATION WEBSITE. ADDITIONAL INFORMATION MAY BE FOUND AT THE FOLLOWING LINK: page.cfm?doc_id=4915