University Budget Development Guidelines
Fiscal Years 2014 and 2015
The guidelines outlined below provide a framework for developing the two-year budget for fiscal years 2014 and 2015. The provost, vice presidents, and other senior managers have led the development of objectives for the fifth and sixth years of the university’s Strategic Plan with an emphasis on the broad areas of the plan that should get special attention during the next two years. With approval from the Board of Trustees (BOT), these objectives will guide the formulation of budget priorities. The complex external environment requires us to maintain our current commitments and address pressing institutional needs in the new round of budget deliberations by maximizing efficiency in existing resources before allocating new funding. The FY2014 budget will be reviewed as the first year of the budget cycle concludes to ensure that the budget projections and assumptions upon which it was based still stand at that time.
1. New Strategic Plan Initiatives. While there will be no change in the goals that comprise the Strategic Plan, care has been taken to fashion Strategic Plan objectives for the new two-year budget that reflect the proper mix of academic progress and financial prudence given the uncertainties in the external environment. Our point of departure for the campus-wide discussions that will culminate in the development of these objectives was the President's report to the Board of Trustees on progress made under the plan to date. These new objectives will inform the development of the new budget’s revenue and expenditure proposals. Both will be presented to the BOT for consideration and action at the February 2013 meeting.
2. Pricing. Across the nation, student debt, loan rates, and college affordability are increasingly important issues. Our responsibility to work on education costs and debt will continue in the development of the budget for the next two years. Pricing strategies will be developed with a strong consideration of the financial needs of students, while also taking university priorities and financial circumstances, comparative tuition data, financial market data, inflation projections, and the state of the economy into account. Based on these factors, we project that undergraduate tuition and residence hall increases will range from 2.5 to 4.5 percent. Tuition rates for the Washington College of Law and Kogod School of Business MBA program will also be set according to market and comparative data.
3. Enrollments and Academic Programs. The freshman enrollment target will be carefully evaluated in light of market demands and our capacity to offer quality instruction and student experience, while also anticipating increased selectivity and diversity. We will continue to strengthen graduate, summer, and international enrollment. New distance learning initiatives to be launched in the next two years, including a Master of International Relations degree program conducted entirely online, will bolster graduate and professional development efforts. In addition, the new School of Extended and Professional Studies will develop a business plan to innovate and expand on professional development and training programs in a non-traditional setting. Strengthening research functions will continue to be a priority.
4. Faculty and Staff Salary Increases. Salary increases will be performance-based. The Consumer Price Index, regional salary market conditions, and higher education benchmarks will be taken into account in this process. Our goal is to maintain the American Association of University Professors “Level 1” status for tenure and tenure-track faculty at full professor and associate professor levels, and systematically narrow the gap for assistant professors. Efforts to offer competitive compensation for term faculty will continue. Recognition of the eventual agreement with the Union will be a salient factor in determining adjunct faculty compensation. We will remain market competitive for staff. Competitive benefit packages will be offered to our full-time faculty and staff, and we will also comply with new health care regulations.
5. Financial Aid. Financial aid increases will support scholarships to address need and enhance diversity. Tuition discount ratios will be re-examined in reference to benchmark data including student indebtedness. While we are justifiably proud of the quality and value of an AU education, and that our students have chosen to pursue it, we want no one to put their future financial condition at serious risk to seek it.
6. Facilities Strategy. The long-term facilities strategy integrates the 2011 Campus Plan and the Strategic Plan, including new construction and renovation projects that will change the university’s face and significantly augment our academic and student serving capacities. The changes, when implemented, will allow us to address chronic space problems affecting our core academic activities of teaching, research, professional work, and learning. In addition, expanding our residence halls will ensure we meet the campus plan requirement of housing two-thirds of our undergraduate student population on campus by 2016. Our facilities projects that are underway or in the planning phase include: a new North Hall; an addition to Nebraska Hall; renovation of 4401 Connecticut Avenue for WAMU 88.5, University Communications and Marketing, and designated academic programs; renovation of the McKinley Building for the School of Communication; a new law school on the Tenley Campus; and a new mixed-use East Campus.
7. Development and Alumni. We will refine funding to reflect the next phase of the Strategic Plan.
8. Information Technology. We will provide funding to advance administrative services and support the Strategic Plan goals. We will also seek greater efficiencies in maximizing computing resources and instructional methodologies whether in classrooms, labs, or distance learning.
9. Library. As a continuing academic priority, a multi-year acquisition plan for library databases will be developed as part of the operating budget.
10. Enrollment Contingency. No more than 1.5 percent of tuition revenues will be annually allocated to the tuition management reserve to maintain the cumulative enrollment contingency reserves at 5 percent of tuition revenue.
11. Quasi-Endowment. A total of 2 percent of operating revenues will be annually allocated for this purpose.
12. Institutional Expenditures. Both planning and budgeting in the current environment present challenges – ongoing weakness in the economy and employment, the looming “fiscal cliff,” and the lack of clarity on what will be done to address both the deficit and the nation’s long-term debt. Additional funds may be required to respond to these and other external factors affecting the operating budget as they become known or clearer.
13. Student Services. We will continue our institutional commitment to enhancing undergraduate and graduate student service experiences by implementing multi-year virtual initiatives through coordination among information technology, academic, and administrative offices.
14. New Revenue. We will generate new revenue through innovations, strategic partnerships, and academic and auxiliary enterprise programs.