Budget Development

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ATTENDEES:  George Alvergue, Harvey Birdseye, Barb Delansky, Shirlee Ford, Dennis Gilbert, Thwing Havens ,  Kay Malmberg, Marie Matsen, Kaaren OíRourke, Annie Paschall.
Absent:  Shanara Lennox
Recorder:  Terry Caron

Approval of Meeting Notes
January 18 meetings notes were approved with correction.

Location of Transparency Group on Laneís Web Site
In Laneís Home Page, go to
1) College Business
2) Budget Development
3) Budget Development 2002-03
4) Item #6.  ìGroupsî

Thursday Meetings
The Group determined there was a need to meet on both Thursday and Fridays, 3-5PM  through the end of February.  The meeting room for Thursdays will be SCI 186 and for Fridays, BUS 205.

Key Questions

• Annie provided a handout (attached) with five suggested questions for  discussion:

1) What makes a good Budget?
2) What should our budget tell us? (desired product)
3) How should it be created? (Desired process)
4) What does our current budget tell us? (current product)
5) How is our current budget prepared? (current process)

Transparency

• Understanding the difference between Budget Document vs documentation materials
• A good budget is not really the Budget Document but all the supporting documentation.
• Determine  what level of detail does staff need to view the documentation? What are the specifics:  what is difficult to track?  What is difficult to explain? What assumptions about the current budget that is not transparent?  What are these assumptions based on?
• A lot of the current budget is transparent, but it may be only transparent on the department level.
• Look at the product first:
Do the budget materials match the financial statement?
Is the documentation easily understandable/easy to follow where the money goes?
(Ex. Restricted and unrestricted funds being merge.  Determine what is legal and what is administrative and then find a way to keep the two visibly separated.)
• Develop a common îbudgetî  language so the terminology is understood by all who read it.
• The documentation needs to have clarity at the lowest level of understanding.
• Transparency needs to happen at the department level as well as the entire college.

ICP

• A better explanation and method for tracking and reporting of ICP may be needed.  Currently, it gets budgeted as an expenditure year after year yet not as a resource.  It makes for an inflated variance and an appearance that there is more in the budget than in actuality.
• Discussion:
• If there were a way to separate  ICP- restricted from  non-restricted funds, a more accurate reflection of the state of the budget might be attained.
• College might explore ways to tighten the procedures on how and when departmental  ICP is budgeted and spent by the department.
• College could have a better understanding of each departmentís use of ICP and amount that carries forward each year.
• Figure out how each departmentís ICP carryover can reflect back to the collegeís overall budget health.  It may fulfill the function in terms of cash flow but not for specific non-department items.

• The actual Budget Document can be, in itself, a very small and concise product to meet the legal requirements but all data that built the Document could be made easily available to staff.
• LASR will resolve a lot of the current database problems.    Currently the data to build the budget document lives mostly in the Budget  office.
• When dealing with the budget document,  we should be dealing with a plan and the most of the planning is actually determined at the department level.
• A longer term charge might be working with LASR Group to ensure there is a sufficient data for budget queries and how it could  be created.
• TG should encourage planning further than one year in advance for areas such as physical facilities and technology needs.

• How many departments involve staff in the budget process?
• Some departments provide access to information for better input.  Others do not.  Some staff prefer to have no input, others wish to be closely involved.
• People want different levels of participation with the budget.  Cannot demand people to participate but information can be provided for those who want it.
• The TG can make a recommendation that provides universal access to budget decisions.
• Staff, in the past, have been involved in some of the process but there have always been strategic decisions made without staff input.
• TG can recommend a uniform process on how staff involvement in budget decisions could work requiring a commitment from the college to improve that process.
• There are external models that demonstrate a democratic process in budget planning.
• The departmentís strategic goals need to tie into the collegeís strategic goals so that the budget decisions are understandable.
• The idea of transparency is to facilitate involvement as well as training and understanding so an educated workforce can participate in the process.  Also, it would ensure that a similar process is used department by department.
• Strategic goals should go into building a budget  more than applying criteria via committees.
• With improved software capabilities, people will have access to information for better input, especially at the departmental level.

• Agree on what is the ìprocessî part of the recommendation and what is the ìproductî
• Develop and agree upon a short term transitional  document that facilitates staff involvement in the budget process.
• Have a parallel process for developing a long-term transparency process.
• Process needs to be understandable and include the stakeholders at the appropriate level.
• Have internal access and allow for flexibility
• Define ìtransparencyî for both the short term and long term processes
• Define ground rules on how to approach the process
• Flesh out budgeting terminologies so they are less enigmatic
• Gather a collection of principles and goals as we go.
• Get help from Thwing to gather input regarding LASR and what the new technology can provide in terms of query reporting.

What makes a good budget?

• An expression of a plan
• What resources do we expect to have available
• Where are we going to put our resources
• A yardstick by which to measure results
• A way to allocate scarce resources to meet the strategic goals of the college

• Document should be easy to understand  (easy to follow where the money goes)
• Document should tie to financial statements so it can be used as yardstick for results and as a predictor
• Document that keeps restricted and unrestricted funds separate (easy to follow where the money comes from and what it is spent on)
• Document that provides sufficient line-item detail for informed decision-making (at each level of the organization)

• Encourage longer-term (5yr) planning on a rolling basis
• Include stakeholders at appropriate levels
• Incorporate budget criteria that are tied to the strategic plan
• Encourage looking at the whole college ñ including funds for long-term asset acquisition and maintenance, financial aid, etc

• Revenues are budgeted in the same categories as the financial statements and therefore easy to track

• Restricted funds are mixed with unrestricted, making them very hard to track
• Budget for expenditures is not set up in same categories as financial statements
• Hard to evaluate reasonableness of estimates for next year
• Not useable as a yardstick during the year for managers to see how their area is doing compared to what was planned