Are You Prepared for Your Budget Request Season?

For many of us, budget requests are right around the corner. Are you prepared? I have now been a part of developing budgets and making official budget requests at four universities, and every place the process and timing is different. At one place, I made budget requests through my department a year and a half before the start of the fiscal year we’d have access to the funds. At other places, our department budget was due somewhere between October and November of the year before.

Regardless of the timing, knowing the process your university has established is just as important of knowing what you want to ask for. Whether you are a budget manager, the department director, or the vice president, you must have a solid understanding of what the budget office (or the authority you make your request to) is looking for and in what format. You should also understand how your request will line up as a priority with other requests both within your department and within the division’s overall requests.

As an auxiliary department at Virginia Tech, we make our budget requests using the incremental budgeting process in which we start with the same budget as the year before (our baseline) and only ask for variances from that budget. We use a template called a Resource Adjustment Request (RAR) to identify the additional budget we are asking for, any potential revenues associated, and the justification for the increase. We may submit as many RARs as we choose, but it is with the understanding that the vice president for student affairs will then submit to the Budget Office the division’s overall priorities as they relate to our strategic plan. This means that only one or two of our RARs get real attention, especially in year’s when budgets will be tight.

So my typical strategy is to only submit four to five strong RARs, all of which would be beneficial to the success and growth of our department. Many times you may be advised to add a few throwaways, but I would discourage that. All it does is open yourself to someone else thinking that is more important and you are awarded that request, while your other higher priorities are left in the wings. Ask only for what you really need.

One other thing we did this year a little differently is within our own department, each of our 15 budget managers developed modified zero-based budget requests as we developed our overall department budget. Through this process, every line item is re-evaluated individually, completely independent of the previous year’s budget. By having to justify every line item and every project, it ensures that antiquated programs that no longer have any impact (or worse, a negative impact) on our department’s overall success are dropped, making room for newer and innovative programs and services. This is a very time consuming process so we will only do this every four to five years as a readjustment process linked to our strategic plan.

ACUI’s Budget Development and Management skill set within the Fiscal Management core competency highlights the knowledge and abilities that are vital to being a successful budget manager. This begins with the development process as I’ve just described and includes how to assess your budget throughout the year, when and how to make adjustments, and tracking external impacts on your budget. The full list includes:

Knowledge required:

• Knowledge of basic principles of budgeting and budget development or preparation
• Knowledge of budgeting approaches (e.g., incremental, program, formula, zero-based, responsibility-centered)
• Knowledge of departmental, division, and campus strategic plans as they relate to budget development and management
• Knowledge of program review and assessment methods
• Knowledge of campus-determined line items that affect budgets (e.g., salary and benefits, campus overheads, student activity or program fees, utility charges)
• Knowledge of external forces that impact budgets (e.g., income, from sales, services, rentals, leases)

Skills and abilities required:

• Ability to integrate planning, programming, and assessment into a budget
• Ability to make mid-year adjustments in budgets as circumstances require, based on review and assessment
• Ability to articulate resource needs and reallocation reasoning and to prioritize those needs
• Ability to include others in a participatory budget formation process
• Ability to manage large, complex budgets
• Ability to formulate and execute capital replacement budgets

Experience working with budgets is an important qualification for many positions within student affairs. To hear more about this and other ideas, please take the time to join us for a more in-depth examination of this skill set on the next College Unions and Activities Discussion (CUAD) podcast, Oct. 11, at 1 p.m. and then further discussions on Twitter by following #ACUICC.