Faculty Senate Approved 3/12/03, as a pilot through the 2003-04 academic year

Document #02-07

3/10/2003

 

Strategic Budgeting and Budget-Building at the University of Wisconsin – Green Bay

Strategic Budget Planning Group [1]

Preface

This paper proposes, for purposes of discussion, a set of principles to guide and expedite the process of developing a strategic budgeting and budget-building process suited to our university.

At this stage, UWGB does not currently have a full-fledged strategic budgeting and budget-building process. We do, however, have resources to draw on. We have had almost a year of discussion that included meetings with our Office of Planning and Budget, the University Committee, the Academic Staff Committee, Cabinet, the Leadership Team, and the Senate Planning and Budgeting Committee; research on processes used at other universities; a "site visit" to another UW campus; what we have learned, sometimes painfully, in implementing budgeting/planning processes at multiple campuses; and review of current practices.

It has been our experience that discussion of planning processes eventually reach a point of rapidly diminishing return. We could talk for years, seeking to dot every "i" and cross every "t," and still not get it right. We reach a point where progress can be more quickly made by "doing" and learning from that "doing," trusting in our abilities as sensible human beings to critically examine and regularly adjust practices.  Thus we are suggesting that we implement the budget planning and budget-building structure outlined here immediately and alter it as we need to in the coming years. If we approach the budgeting process with an attitude of openness, integrity, collegiality, and responsiveness to campus needs, and if we make sure to include critical "feedback" loops, we’ll get better and improve the process as we go.

That is how we’d like to begin, by adopting a process that builds on what we’ve learned and what we’ve heard, and allowing for process improvements over the years. We can be certain that what we agree to for this year will different from what we do in subsequent years.  A key phase of any planning process is to analyze results of plans in order to regularly adjust and improve. That principle applies just as well to the very process of planning itself.

One final observation by way of preface. UW-Green Bay’s planning and budget-building processes needed attention and nurturing. Unfortunately, we are pursuing that objective in less than favorable circumstances. Large State budget deficits loom. The University will be affected. In such circumstances, anxieties understandably abound. The complications are two-fold. First, anxiety, fear, and frustration -- even anger -- can interfere with thoughtful, analytical, collegial discussion of what is best for the whole. Second, it may be that processes for routine strategic budgeting and budget-building will not always be suited to addressing situations that are extraordinary – for example, that require more rapid responses or that are driven by external forces. So, the circumstances for "bringing up" new procedures are not ideal. And yet, forging this process now in the worse case scenario may indeed be useful and productive. By going ahead now, we will know that this process that we are creating will have survived trial by fire and that the structure will work in good times and bad times. We need to acknowledge and be prepared to deal with these potential additional complications. But, we should not and cannot postpone. Arguably, it is precisely at times such as we are entering that we need to emphasize the integration of short-term budgetary decisions with longer-term strategic directions. 

 

I. What is Strategic Budgeting and Budget-Building?

 

Any budget says what fiscal resources we plan to have and how we plan to use them. A strategic budget, however, is much more deliberate than that. It is an aspect and form of strategic planning. It is driven, at its core, by imagination, even passion, and a desire for change. It looks at desired changes and improvement efforts, determines what resources we have to work with, and figures out how we can deliberately direct some of those resources to allow the change to move forward. It looks at how we can use the resources we have to create incentives to create changes and improvements we want. It seeks ways to mobilize people to work together in support of agreed-upon goals. It is not just "business as usual."

When people say "budget," they usually mean operational budget, not strategic budget. True, an operational budget allocates resources across the organization as well, but an operational budget may be just "business as usual." Examples: an operational budget may dole out budget increases or budget reductions across-the-board, with no specific priorities or vision for change or improvement. An operational budget may be based on simple, factual calculations (e.g., increasing S&E by a certain rate of inflation), with no value judgments being made about which areas of S&E expenditures are more valuable to the institution. An operational budget can be built to reflect known changes in current operations (e.g., who will receive salary increases due to promotions), with no effort to deliberately create change (e.g., increased funding for professional development so that current personnel can achieve new things). An operational budget may give little incentive for accomplishing changes we need or desire.

At its simplest level, "strategic budgeting" integrates the budgeting/resource-allocation (i.e., budget-building) process with strategic planning. Budgeting is a usually short-term, an annual or biennial process of tactical decisions about short-term resource allocations. Strategic planning, on the other hand, is a broader process of deciding how we will pursue our mission and our vision. While budget deals with dollars and cents, planning taps into our values, our wishes, our relationships, and our goals, our sense of what is meaningful, how we want to conduct our work, and what is possible. Planning and budgeting are integrally connected, but they are also different endeavors. Planning is a broader topic that we’ll address in a working draft on that topic. Just bear in mind that this paper deals only with budget-planning and budget-building, not with all of the other aspects of a comprehensive planning process that we will, in time, consider.

Finally, we must mention one other observation. We have noticed that one problem with UW-Green Bay’s budget process has NOT been that we have too FEW strategic plans. Rather the issue has been that we have had too MANY plans. File drawers are full of plans in a variety of areas, compiled by dedicated and talented groups. Subjects include program plans, gender equity, internationalization, diversity, facilities, general education, marketing, child care, growth plans, etc… And, while all efforts seek important ends, resource limitations require that priorities be set and that choices be made. If that is not done, then plans tend just to sit in those file cabinets. A strategic budgeting and budget-building process does so in ways that are explicit, visible, and collegial. Here, the role of the Strategic Budgeting and Budget-Building Committee is not to judge these other plans (no "thumbs up" or "thumbs down"); rather, their role is informational, to make sure that these multiple plans are considered by planning units and at the university level as the strategic budgeting process unfolds.

Hence, this strategic budgeting and budget-building process integrates planning within the existing budget-building structure. It creates room in governance and administration for change. This proposal takes our existing interest in planning and our planning methods and formalizes them. Such a process will be not only more transparent but also will allow for planning ideas to become campus realities in a context that is informed by the wider campus community. Thus planning will be linked across departments, units, and all offices.

In this paper, we’re concentrating on strategic budgeting and budget-building per se. Strategic budgeting and budget-building can be used to develop an annual budget for the campus, but it also seeks much more:

· to foster communication.

· to precipitate dialogue.

· to assure openness.

· to encourage engagement.

· to increase the levels of information and knowledge upon which decisions are based.

· to assure routine and systematic analysis of results so that we can regularly improve our attainment of the ends we care most about as a university – our mission.

One University’s faculty/staff strategic budgeting task force chose to define "strategic budgeting" this way:

Strategic budgeting is a community and constituency building process. It involves the opportunity for the inclusion of voices from the University's multiple constituencies. Strategic budgeting emphasizes the generation and preservation of assets as strategic investments. Its purpose is to develop and utilize measures of outcomes to guide decision making. Furthermore, strategic budgeting will help to clarify how each unit adds to and consumes shared resources, and contributes to the collective work necessary for achieving agreed upon missions and goals. Finally, a strategic approach to budgeting will provide incentives for: 1) generating resources and, 2) contributing to collaborative efforts (e.g., University Studies, Environmental Studies, interdisciplinary research, etc.). This approach emphasizes budgeting as an open process with full disclosure of information, assumptions, objectives, and criteria.[2]

The aspirations, then, are ambitious.  We might not get it right the first time. Better institutional decision-making will be one result of our initial efforts. As important, though, is becoming a better institution, one where we value the full and meaningful engagement of all who are the University of Wisconsin – Green Bay.

II. Strategic Budgeting and Budget-Building Principles

We propose, as a first draft, several principles as guides for UWGB’s process of strategic budgeting and budget-building. The list is not, at this stage, in priority order. Nor is it complete. We are certain that colleagues will bring to our attention critical considerations that we have overlooked. Still, here is a start:

1. Bottom-Up Engagement and Empowerment

We are a community rich in our expertise, innovative thinking, and high aspirations. Effective engagement of this important strength occurs early in the strategic budgeting and budget-building process rather than merely at the end. The budget planning process must start at the operational units (departments and offices). To the extent possible, it will use existing committees and governance structures to keep the university community fully informed and engaged, and to ensure the wide range of input needed for wise decision-making.

2. Inclusive Involvement

The strategic budgeting and budget-building process allows for effective involvement of faculty, staff, students, classified colleagues as well as external members of the UWGB community. It encourages and enables members of different groups to see "the big picture," to learn about other units, and to become involved on behalf of the whole university, not just their own assigned unit.

3. Transparency

The strategic budgeting and budget-building process is open and informative. People have access to budget, expenditure, and operational information. They are able to get information about the budgetary constraints, requirements, pressures, resources, and opportunities. They know who is responsible for making budgetary decisions, when, and by what processes they can have input. "Products" are made widely available. In short, members of the campus community know what is happening, when, and why.

4. Sensitivity

The process also is sensitive to and respectful of the worth and dignity of every individual, office, and program. This is especially important in tough budget times. Those involved in the budgeting process may have no choice but to look at possible reductions, alternatives, or changes. They have to be able to look at various "what if" scenarios--almost all of which will be found, upon reflection, not to be desirable or necessary. Yet, the mere discussion of such action can be very costly in terms of students’ and employees’ morale and confidence, sometimes producing a self-fulfilling prophecy. Somehow, we must protect our students, employees, and programs from this.

This can best be accomplished by protecting the confidentiality of such occasionally necessary deliberations and then arriving at decisions – which are public and open – in a timely manner. Thus, even as we strive toward openness as indicated in #4 above, we are also sensitive to the human implications of budgetary discussions, and we strive to achieve a delicate balance between these two important principles.

5. Governance Primacy

At UWGB, we have separate governance entities for faculty, academic staff, and students. We also have classified staff and administrators who, while they do not have a distinctive governance structure, are nonetheless vital members of our institution. All of those constituencies need to be involved in the strategic budgeting and budget-building process. Insofar as possible, we will build on, utilize, and include our existing governance entities.

6. Integration

All units and levels of the University are interconnected. The strategic budgeting and budget-building process recognizes these interconnections and incorporates them into the process. Vertically, the process integrates university-level and unit-level strategic directions. Horizontally, the process recognizes and takes into consideration the interrelations across programs, departments, and divisions, and the ways in which changes in one unit will impact on others.

7. Information-Based Thinking

The process is informed by and based on accurate, objective information and normative data. This needs to include ongoing assessments of both the internal environment/operations and the external environment. Common beliefs and assumptions need be reviewed against actual data and information—i.e., given a "reality check"—rather than taken for granted. Standard measures need to be available, and information needs to be shared both within and across units. In this manner, members of the university community will have the larger institutional context within which to interpret their own individual experiences and needs, and the solutions that emerge will be informed, realistic, accurate, and fair to the University community.

8. Responsiveness to Differences; No "One Size Fits All"

The University is a complex and dynamic organization. One planning unit will differ from the next, and one planning year will differ from the next. The University will have some areas of greater complexity and change and other areas of greater predictability and stability. Planning units will have wide guidelines (within these principles) to adopt strategic budgeting processes best suited to their particular circumstances. Likewise, the planning and budgeting processes will evolve and improve over time as we learn and as we adapt to future challenges, influences, and opportunities.

                 9. Initial Simplicity

We can imagine a full-fledged planning and budgeting process that is very elaborate and thorough. After several UWGB faculty, staff, and administrators visited a campus where such a system is being implemented, however, we all agreed that such an investment of time and effort was not appropriate to our context. We have opted, instead, to start with a more minimal process. With time, we can decide what might be added and, perhaps even, what can be deleted.

These principles will help us begin the strategic budgeting and budget-building process. Clearly, this is not a "one shot" effort. The process will improve over the years. As it becomes more routine, we would expect it to link, easily and naturally, to other institutional processes such as planning, development, assessment, and evaluation. But, as our process evolves, we hope the principles outlined in this section will help keep us "on track" in developing a process that is informative, meaningful, realistic, and wise.

 

III. Strategic Budgeting and Budget-Building Process

The strategic budgeting and budget-building process will span across all divisions of the University, all organizational levels, and all governance entities. It will be comprised of both "strategic budgeting entities" and "strategic budgeting steps." Both are outlined in this section.

Strategic Budgeting Entities

1. Budget Planning and Budget-Building Stakeholders

At the campus level, each major budget division will be considered a separate planning stakeholder. These stakeholders will be responsible for submitting balanced budget models and unit plans to be considered by the Strategic Budgeting Committee and the Chancellor’s Cabinet.  These stakeholders include, at a minimum, the following:

            · Academic Affairs, including, as distinct planning stakeholders:

o Liberal Arts and Sciences

o Professional and Graduate Studies

o Information Services

o Student Affairs (including Residential Life)

o Outreach and Extension

· Business and Finance (including Facilities), including:

o Weidner Center

o Union

· Advancement

· Athletics

· SUFAC

These are the major budget divisions and stakeholders at the university level. Within a particular budget division, however, there may be additional planning units that participate in the division’s planning process. In Liberal Arts and Sciences and in Professional and Graduate Studies, for instance, it is expected that each interdisciplinary budget unit will actively participate in the planning activities of the respective academic division. This is where the "bottom up" approach to planning and input into the planning process is ensured.

Thus, each budget division may decide to further organize into constituent budget-planning units. That will be the decision of the division involved. Further, there is no assumption that the exact same processes for "bottom up" budget-planning will apply to every division. Indeed, just the opposite. The process for involving those in Liberal Arts and Sciences may be quite differ from the process which SGA, Weidner Center, or Athletics decides best suits its purposes.

There also may be additional entities that cut across these budget planning stakeholders Each. Nothing precludes such additional bodies from becoming involved in formulating plans and proposals to be considered through the strategic budgeting and budget-building process. Possible examples might be initiatives contemplated by the Women’s Equality Council, the Campus or Community Diversity Councils, or the General Education Council as just a few examples.

2. Governance

Three of our major existing governance entities (faculty, academic staff, students) would have a senior leader designated to serve on the UWGB Strategic Budgeting and Budget-Building Committee (more on that follows). These individuals would be responsible for keeping their constituencies informed and for providing their constituencies opportunities for input into the strategic budgeting and budget-building process, particularly at the initial stages of the process. There is no a priori reason why each of the governance entities needs to decide upon the same type or degree of involvement; that would be up to each respective governance group.

3. Line Administrators

Line administrators [3] play several critical roles. First, they assure a process that complies with the policies of the division and the university. Second, after weighing advice, counsel, and information from various sources, they make budgetary recommendations and decisions and are held accountable for the results – for the effective performance of the responsibilities assigned to the divisions that they lead.

Budget planning is "bottom up" and recommendations are developed initially at the unit level. At that level, the unit and the line administrator should have a great deal of freedom to determine what kind of recommendations they feed into the budgeting process at the next level. Ultimately, line administrators decide what to recommend for their respective units, provide information and support relative to their recommendations, are responsive throughout the process, and are responsible for implementing the final budgetary decisions of the Chancellor who is accountable to the Board of Regents.

 

4. The Strategic Budgeting and Budget-Building Committee

The challenge is how to integrate these different stakeholders into one process. While none of us would argue that we need more committees in general, in this particular case, we believe that we do need to form a new committee. This new committee would be more inclusive and broad-based than any one of our current committees or governance entities. It would be a relatively small group of individuals with senior leadership responsibilities, either administrative or within the governance group from which they are drawn. It would be the "keeper of the process," would ensure input from all constituencies, and would evaluate and modify the process as experience tells us is appropriate or desirable.

Charge:

a. Coordinate and oversee the strategic budgeting and budget-building process by providing instructions and guidelines, timelines, advice, and comment on unit proposals and strategies.

b. Represent the various governance entities of the University by keeping constituencies informed, fostering dialog, and providing input to the discussion and process.

c. Determine information and data requirements for planning and evaluating budget proposals and reports.

d. Chair and Vice Chair participate in the university-level budget hearing process.

e. Review and critique penultimate budget proposals, including the recommendation of changes, prior to final decision-making and implementation.

f. Regularly and critically evaluate the process against strategic budgeting and budget-building principles to recommend changes and improvements.

Membership:

Precise membership will need to be worked out, but we would suggest the following.

a. The Chair of the new Strategic Budgeting and Budget-Building Committee would be a member of the University Committee. This individual will be selected by the faculty and would also serve, ex officio if not an elected representative, on the Faculty Senate. The term of office for this member will be three years.

b. The Vice Chair of the new Strategic Budgeting and Budget-Building Committee will be selected by the Academic Staff Committee from among the UWGB academic staff. The terms of office for this member will be three years and will be staggered with the term of the Chair.

c. The Assistant Vice Chancellor for Planning and Budget will serve on the committee and will provide extensive guidance, direction as to procedural/budgetary requirements, and other support to the committee.

d. The SGA President.

e. The Provost.

f. The Vice Chancellor for Business and Finance.

g. A community representative, perhaps from the Council of Trustees.

h. A member of the unrepresented classified staff. [4]

Ideally and insofar as possible, terms would be for three years to ensure continuity and experience on the committee.

Strategic Budgeting and Budget-Building Steps

Before outlining the strategic budgeting and budget-building steps that we would anticipate being involved, we need to reiterate what strategic budgeting and budget-building is and isn’t.

First, strategic budgeting and budget-building is, at the heart of it, a planning process. But, it does not substitute for—and must not be confused with—the ongoing substantive planning and improvement efforts of the various units across campus. Those plans capture how people want to improve their academic programs, student life, the workplace environment, our physical facilities, etc. They would include the academic plan, the information technology plan, the campus master plan, diversity plan, campus life plan, and unit strategic plans. We want to be clear not to confuse strategic budgeting and budget-building with the other types of planning that will, eventually, form the texture and backdrop for the annual budget planning process. Strategic budgeting and budget-building is crucial and effective, but it is only one piece of the picture.

Second, as we noted earlier, strategic budgeting and budget-building is not a neat, linear process. Those who like clear, crisp flowcharts can be driven nuts. There are top-down guidelines for bottom-up processes and multiple interacting units that must come together. Thus, we outline steps that recognize and allow for the iterative nature of the process. Although we are talking here about the strategic budgeting and budget-building process, this is where budgeting and planning come together. Hence, the steps outlined for strategic budgeting and budget-building also, at this point, begin to represent the same steps we will use for strategic planning at the University level.

Third, this is not a game of Monopoly where we all get to start at "Go." We are already well into a biennial budget process and well into our campus budget-building process. We are halfway around the game board even as we start this discussion. So, we anticipate that in this first year, we will be starting the process at about Step 3.

Having said all that, these are the various steps that seem to be required:

Step 1: University- and Division-Level Strategic Directions, Assessments, and Assumptions

Purpose: To provide context and guidance for planning and budgeting at the university, division, stakeholder, and unit levels.

Product: "Strategic directions" identify which direction the University needs and wants to go in. Strategic directions are relatively few in number, identify areas to receive particular emphasis for the university as a whole, and are most likely to be focused on a time frame of at least two or three years. One strategic direction that has been identified by Bruce, for example, is that of connecting with the community. Another (if funded) would be to grow enrollments to 7500. Others could include internationalizing the undergraduate experience, or promoting wellness, or creating 6 new nationally known centers of excellence – whatever we decide. The point is, these strategic directions are campuswide priorities that the whole institution will promote.

"Assessments" identify the major, relevant aspects of the internal and external environments—what works and what doesn’t work so well within the institution, and what special opportunities, challenges, or threats we face on the outside. This is the traditional SWOT analysis (strengths, weaknesses, opportunities, and threats) used for strategic planning in general. The assessments of the internal and external environment are short, few in number, and focused on factors most relevant to the university-level strategic directions. For the purposes of strategic budgeting and budget-building, we will pay special attention to the fiscal realities and options.

"Assumptions" must also be identified. The major assumptions are "educated guesses" that form a common framework within which the various stakeholders and units can develop their thinking. For instance, are we planning for growth in enrollments or for a steady state? Are we planning on increased funding, or reductions, and of what magnitude?

Statement of strategic directions should take no more than a half page. Assessments and assumptions should be similarly focused and concise.

Process: The Strategic Budgeting and Budget-Building Committee will establish an iterative process for engaging governance entities and the campus community in assessing the internal and external environments. The Strategic Budgeting and Budget-Building Committee will also establish an integrative process for governance entities to participate in developing or critiquing drafts of the University- and division-level strategic directions, assessments, and assumptions. The Committee then recommends to the Cabinet and Chancellor, possibly electing to include minority or divergent views. The Cabinet and Chancellor will then adopt, perhaps after modification, a set of strategic directions, assessments, and assumptions to be used in the subsequent steps. These will be distributed in writing, and all information resulting from this step will be made widely available.

Step 2: Planning-Unit-Level Strategic Directions, Assessments, and Assumptions

Purpose: To guide planning and budgeting at the planning level and to increase understanding, university-wide, of the planning unit’s direction, concerns, and needs. This is where "bottom up" planning – and, opportunities for meaningful participation – really begins. Do note that the guidance that is provided is broader than for the budgeting of dollars. Most of the resources we have to allocate involve expertise and time, not dollars; the process needs to help a unit agree upon the directions in which time and expertise as well as dollars are best invested. At this point, the unit’s strategic planning becomes integrally connected with its strategic budgeting and budget-building.

Product: Same as the university- and division-level components in type: strategic directions, assessments of relevant internal and external factors, and assumptions are identified. However, these are focused upon the needs, aspirations, and priorities of the various planning units. The planning units’ aspirations and priorities should not contradict University-level strategic directions, and some may help advance those strategic directions. Others, however, may be entirely independent of the University-level priorities and may concern matters of priority primarily for the planning unit itself. (An example of this would be the need of the Professional Program in Education to meet new Wisconsin Department of Instruction certification requirements, effective 2004.) The unit-level strategic directions, assessments, and assumptions should be focused, concise, and written.

Process: Each planning unit will develop and adopt its own process, and these likely will differ between planning units. Each planning unit will also develop the substantive plans needed to carry out its responsibilities. For example, Business and Finance will have a physical facilities plan, Academic Affairs will have an academic plan and an IT plan, Advancement and Marketing will have a marketing plan, and so forth.[6]  These substantive plans may be more long-term and general. They will inform and feed into the University’s strategic budgeting and budget-building processes, but they are distinct and distinguishable from the University’s strategic budgeting and budget-building. These substantive plans will be available to all. To promote broader understanding, they will be reviewed by the Strategic Budgeting and Budget-Building Committee, but they are the primary responsibility of the planning unit itself (as planning units are defined above).

The Strategic Budgeting and Budget-Building Committee will provide a common format for reporting and submitting the planning unit’s strategic budgeting and budget-building products. The Strategic Budgeting and Budget-Building Committee also may provide feedback on the process adopted by planning unit if the process seems not to be adequately serving general strategic budgeting and budget-building principles such as those enumerated earlier in this paper. The process adopted by the planning unit must be explicitly published (and kept up-to-date) in a form that is available to all.

While wide unit-level latitude is desirable, the established process must be consistent with university’s adopted strategic budgeting principles including opportunities of wide participation by faculty, academic staff, classified colleagues, and – as appropriate to the unit’s responsibilities – students and external community members. The process needs to allow for review, feedback, revision, and communication. All information resulting from this step will be made widely available.

Step 3: Unit-Level Strategic Budgeting and Budget-Building

Purpose: This is where inclusive "bottom up" planning in Step 2 pays off. Step 3 is intended to bring forward to the Strategic Budgeting and Budget-Building Committee the resource issues that are important to the planning units and their ability to carry out their strategic plans.

Product: Proposed budgets for the planning units, including proposed increases, reductions, or redirections.

Process: The Strategic Budgeting and Budget-Building Committee, drawing on the guidance of the Planning and Budget Office, will provide instructions on the format for submission of the proposed budget (e.g., multiple funding scenarios to be considered, scope of resources/changes to be considered, supporting information to be provided). The format may change from year-to-year, but should remain consistent enough to be user-friendly. Whatever the format, in this step the planning units must also demonstrate that their budget recommendations are clearly and explicitly connected to the products of Step 2 and, perhaps, Step 1 (i.e., to strategic directions, assessments, and assumptions).

The planning divisions and stakeholders will determine their own internal process for developing their budget recommendations, and these will vary from unit to unit. One division, for example, may involve unit directors in a series of meetings or administrative "hearings," while another division may use a more collaborative committee structure. Whatever variation a division adopts, the process must be consistent with university-level strategic budgeting and budget-building principles. Whatever process is chosen at the division level, the lead administrator for the planning division is responsible and accountable for deciding what "package" is brought forward to the next step.

In times of budget reductions, the planning divisions have a special responsibility to reach that delicate balance between the principle of transparency and the principle of sensitivity. We can achieve this by making publicly available the method, guiding principles, and overall objectives of the strategic budgeting and budget-building process, but being discrete about the particular people who might be impacted. Example: If a division is forced to consider laying off some employees, it could openly state that its objective is to reduce the budget by x%, and its guiding principles are to preserve academic integrity and the quality of campus life (or safety, or infrastructure, or material resources, or whatever). Its method could be to use a committee structure, or to have administrative review. It would be appropriate to state that a unit is looking at possibly as many as two layoffs; it would not be appropriate, at this time before any decisions have been made, to say who would be laid off. After all, at the next level, another solution might be found. All discussion within the division’s internal hearings or committee discussions must be strictly confidential.

The division administrator will be responsible for articulating how the planning unit’s budget recommendations relate to the strategic directions, assessments, and assumptions. Normally, these are public and widely available. In times of budget reductions, however, broad public dissemination would be delayed until decisions have been made.

Step 4: University-Level Strategic Budgeting and Budget-Building

Purpose: To construct an annual budget which is timely, accurate, responsive to campus needs, and consistent with the University’s strategic directions.

Product: Annual budget for the University, including budgets for the planning divisions and units, consistent with State regulations and submitted by State deadline.

Process: This is where strategic planning and budgeting come together. Division and stakeholder leaders will present the results of Steps 2 and 3, for their respective divisions and stakeholders, in university-level budget hearings. Again, Step 2 entails the units’ developing their strategic directions, assessments, and assumptions. Step 3 entails their developing budget proposals to support those strategic directions, assessments, and assumptions. Together, they should form a coherent, understandable whole.

The hearing body will include leaders of all planning divisions (to address cross-unit impacts), Cabinet, and chair and co-chair of the Strategic Budgeting and Budget-Building Committee. Division and stakeholder leaders may bring in one or two others to help with their presentation and for that portion of the hearing dealing with their presentation.

Following these hearings, the Cabinet will draft a budget plan, explicitly showing the logical connections of the budget to the strategic directions, assessments, and assumptions that were the result of Steps 1 and 2. This draft will be made widely available across campus.

The Strategic Budgeting and Budget-Building Committee will review the draft budget and provide the Chancellor with comments, concerns, or recommendations about it. In fulfilling this responsibility, the Strategic Budgeting and Budget-Building Committee can, as it wishes, devise means by which it seeks consultation with and input from the governance entities represented on the Committee.

The Chancellor will consider the advice of the Strategic Budgeting and Budget-Building Committee, consult with Cabinet, and make revisions as deemed necessary. The Chancellor then announces the University’s budget, including connections to strategic directions and the internal and external assessments with which the whole process began.

Step 5: Evaluation of Process

Purpose: To continually improve our strategic budgeting and budget-building process.

Product: A set of recommendations for improving the University’s strategic budgeting and budget-building process in the future.

Process: Soon after the conclusion of each strategic budgeting and budget-building process, the Strategic Budgeting and Budget-Building Committee will debrief, identifying what worked well and what did not work out as intended, making recommendations for changes for the next year. These could include changes in format, process, or content. Over the years, the process should become more user-friendly, more effective, and more productive. In this effort, the Strategic Budgeting and Budget-Building Committee will get input from others, as they see helpful; it is this feedback phase that is too often overlooked—but that is critical for any effective "learning organization."

 

Step 6: Analysis of Results

Purpose: To continually improve our operational effectiveness in carrying out our mission and agreed upon strategic directions, and to correct budgetary decisions that were not effective in producing the desired result.

Product:

a. Objective feedback on the University’s and the planning units’ progress toward achieving their strategic directions.

b. A rich array of relevant, objective information to inform our future actions, thinking, and planning efforts.

c. Shared understandings to promote productive consideration and discussion of our various successes and problems.

Process: At the conclusion of the planning year, each budget division and planning unit will assess its progress with respect to its strategic directions and goals. It will prepare a concise progress report or "report card." The University will do the same. These progress reports will be made available to the campus community. They will then be incorporated into the next planning and budgeting cycle.

In order to do this, each budget division and planning unit will need to identify the critical measures or indicators by which its progress can be measured. The logical connection between measure and goal should be clear. The UWGB Office of Institutional Research and the UWGB Assessment Office will assist the divisions and units in identifying reasonable measures and getting data relative to those measures. When possible and appropriate, standard and/or normed measures will be used. When appropriate and feasible, multiple measures will be used to provide a better picture. (Note: Use of the term "data" does not preclude the use of qualitative indicators when appropriate.)

Over time, we will evolve a culture in which all university personnel have easy access to the information they need to inform their thinking, decision-making, and further planning. We are disturbed at the present, for instance, by the number of times we hear people "talking past each other" because they have no agreement or common understanding of whether or not a certain problem even exists. This makes it hard to agree on what needs to be done or how we should spend the valuable, scarce resources we have. By building in this step, we’ll have an easier time agreeing what courses of action are called for and what modifications are needed to our operations.

Strategic Budgeting and Budget-Building Timeline

Timelines—what step is taken by what date—will be worked out as the outlined process is piloted, improved, and agreed upon. Timelines must allow for meaningful involvement, dialogue, and deliberation. Perhaps the timeline will differ depending upon whether the first or the second year of a biennium is under consideration. And, given that we are well into a biennial budget process, we will certainly need a compressed, one-time-only, timeline for this year. Indeed, our approach this year will likely need to be one of cutting into the process "mid-stream," say, at Step 3, then beginning with Step 1 for the next year.

Whatever, we will seek to "start simple," elaborating the process where it seems to all of us to be worth the additional investment of our shared time, energy, and expertise. As we gain more experience with this process, additional comments, criticisms, and suggestions will be sought from members of the University community. The process will be reviewed and refined further, if needed, before we launch the first full-year cycle next fall. Thereafter, the Strategic Budgeting and Budget-Building Committee will periodically review the process and recommend further refinements as needed for this process to achieve its full potential.

 

[1] Members of the Strategic Budget Planning Group include the Faculty Senate Planning and Budget Committee members Andrew Kersten (chair), William Conley, Victoria Goff, John Lyon, Joyce Salisbury, and Ray Hutchison; Chancellor Shepard; Provost Hammersmith; Assistant Chancellor Rodeheaver.

[2] "Report of the Strategic Design Team," Portland State University, May 1997, as found at: http://www-adm.pdx.edu/user/fadm/rpt-sbdt.htm

[3] Line administrators, in this process, include, at a minimum, the heads of the planning stakeholders and the Chancellor. Within particular planning the line administrators may develop planning processes that involve others (e.g., program chairs) in the strategic budgeting and budget-building roles required of line administrators.

[4] Representation of most classified colleagues is problematic as they have exercised their right to be represented through unions and the process of bargaining; the UW System holds that one may choose the bargaining or the governance route but not both when it comes to seeking to influence the direction, policies, and practices of a UW institution. In the process that follows, classified colleagues are explicitly included in the most important initial, "bottom up" steps.

[6] We recognize that we are mixing two separate types of plans here: plans units have for their own unit (e.g., academic plans) and university-wide plans that units have responsibility for developing and for involving the campus in developing (e.g., IT plan).