Ohio University President M. Duane Nellis shared the following message with the campus community on Tuesday, Dec. 19, 2017.
Over the course of this semester, deans, faculty, students, and staff have been sharing their input on our budget modeling and planning through formal and informal mechanisms. This input has come in the form of participation on the Budget Model Committee, Budget Planning Council, Benefits Advisory Council, college visits and forums, college financial reviews, Breakfast for Progress, and formal feedback from Faculty Senate. We also are taking into consideration our state’s current constrained fiscal environment and flattening enrollment trend projections for traditional-aged, college-bound students. As a result of this important feedback, input, conversations, consultation, and in consideration of the realities of statewide and national higher education trends, we are reevaluating our financial planning approach. The planning approach we have used in recent years needs to be replaced with new strategies and a new resource allocation model – one that will build upon and incorporate the feedback we have received.
To this respect, I have asked Vice President for Finance and Administration Deb Shaffer and Associate Vice Provost for Academic Budgeting and Analysis John Day to work with the Deans to reexamine our approach to our financial planning efforts. The revised approach and resulting plans should be based on the following principles and objectives:
- All plans will prioritize support for activities that are most critical to advancing our academic mission.
- Plans also will demonstrate a minimized use of reserves. Maintaining reserves is an important part of our institution’s overall financial stability. Therefore, any use of reserves must be clearly documented in the academic unit’s submitted plan with a timeline and should only be used for the following purposes:
- The use of reserves, even those committed prior to Fiscal Year (FY) 2018, must be articulated as part of a multi-year strategy that supports the new Strategic Pathways and are clearly moving the unit or college to a sustainable financial future.
- Investment in new programs/growth must be accompanied by business plans, which identify expected replenishment of reserves from investments and an appropriate timeline. These investments will be separately accounted for as internal loans (no interest) against reserves so that we can institutionally identify our investments in strategic growth separately from our expense management efforts.
- Reserves also can be used as a bridge when personnel actions by policy require notice that extends into FY19.
- Development and implementation of academic and non-academic budget plans must be consistent with University strategic priorities and preserve support for the new Strategic Pathways.
- All functions of the University should proportionately contribute toward our sustainable financial future.
- All plans must recognize any base budget reductions that have occurred in the current year, as well as in the development of a budget plan for FY19 and FY20.
Our University’s budgeting process will reflect additional strategic investments approved by the University Benefits Advisory Council (BAC) on December 5, 2017 (healthcare assumptions) and the Budget Planning Council (BPC) on December 14, 2017. These investments will include the following recommendations from the BAC and BPC and will be factored into our projected University budget:
- The BAC recommended utilization of excess university healthcare reserves to offset the budgeted institutional increases in FY19 and FY20. The funding source for this $1.4 million offset is from Academic and Support Unit contributions to healthcare costs.
- A 1.5% raise pool for faculty and staff for the next fiscal year was recommended by BPC.
- A strategic increased investment in undergraduate financial aid of $2.1 million was recommended by Deans Council and supported by BPC. This investment will focus primarily on increasing the enrollment of high-achieving students, thereby supporting the growth of our expanded Honors Program.
To be clear, we are continuing to collect information in order to appropriately support the future of our University and advance the educational experience for our students. To date, we have not made decisions about any budget reduction plans for our academic units, as we are still working to understand what is an appropriate proportional share in any reductions between academic units and non-academic units that preserves the academic core of our University.
I realize this is a difficult process, but I have confidence in you and the strength of our University. We are still in a strong position and are realigning our financial resources to support our academic programs and scholarly activities to serve the current and future needs of our students, region, state, and global community. This realignment will support our future in a sustainable manner. Working collectively, we can and will move forward strategically while addressing these budget challenges together.
M. Duane Nellis