University Senate receives fiscal 2006-07 budget recommendations

University Senate receives fiscal 2006-07 budget recommendationsMarch 30, 2006Kevin Morrowkdmorrow@syr.edu

The Syracuse University Senate Committee on Budget and Fiscal Affairs presented its recommendations for the University’s fiscal 2006-07 budget during a full meeting of the University Senate on March 29.

The committee’s recommendations on the budget of approximately $975 million have also been forwarded to Chancellor Nancy Cantor, who will in turn forward her recommendations on to the University’s Board of Trustees for the board’s action at its May meeting. In February, the Board approved the recommended tuition and fees and a set of proposed fee structures by selected schools and colleges.

On Wednesday, the University Senate also received as an appendix to the report from the Senate Budget and Fiscal Affairs Committee a report from the Responsibility Center Management (RCM) Committee. In the past year, SU has adopted a new RCM budgeting system, which is intended to better utilize the University’s financial position and resource management decision making. An RCM committee was created last July to help with the implementation and ongoing oversight of the RCM system.

The Senate committee, in its report, reaffirmed its support for the RCM budgeting approach and its continued development; endorsed the steps taken, flexibility in processes and outcomes and support for continued learning and exploration of the RCM approach; and approved moving the RCM budget process calendar forward to allow for a better alliance of the process with important decision points in the University’s calendar year.

The Senate committee also issued the following recommendations for the fiscal 2006-07 budget:

• that the enhancement plan for addressing the Category 3 staff salary adjustments, begun three years ago, be continued. The committee will also study all staff categories within Categories 2 and 4;
• that the freeze on operating and equipment budgets continue, though the committee expressed concern that there has not been an increase in four years;
• that an increase in increments in the library acquisitions budget be explored;
• that it receive reports from appropriate Cabinet officers to develop a fuller understanding of the concept of their subvention–assistance from the central budget; and
• that a comprehensive study of faculty salaries with regard to markets is done to provide a more complete and current basis for budgetary recommendations in the coming fiscal years.

The RCM process gives 28 “responsibility centers” at SU–areas that generate revenue–the responsibility of planning their own budgets each year. An RCM task force, established in 2004, researched the budgeting processes of other universities in order to help implement the system at SU.

“RCM is an entrepreneurial system that gives our revenue centers more responsibility in generating revenues and balancing their budgets,” says Louis G. Marcoccia, the University’s senior vice president for business, finance and administrative services. “It encourages them to be creative, while at the same time operating in a way consistent with the values of the University and being supportive of the University’s strategic directions and goals.”

“There are many benefits to putting the responsibility and the decision making closest to where the action is,” says John Hogan, the University’s director of budget and planning.

From December through February, the RCM Committee met with leaders of the responsibility centers and each of the administrative areas to learn about the goals, plans and aspirations of the centers and areas and how they are aligned with the overall vision of the University.

Recommendations of the RCM Committee include:

• an All-Funds approach to the budget–use of all sources of funding–as a central feature of SU’s RCM budgeting system;
• $2.6 million in funding for specific requests made by schools and colleges;
• a one-year extension of the freeze on general operating budgets;
• a three percent pro forma increase in salary budgets to create funds for merit-based salary increases; and
• that the Office of Budget and Planning issue early indicators when significant variances may be developing in fringe benefit and indirect cost rates.

Feedback on the 2006-07 fiscal year budget, as well as the RCM process, is welcome and may be sent to The Office of Budget and Planning at BPlan@syr.edu.