August 20, 2001

To: The Grinnell College Campus Community

From: Jonathan Brand/David Clay

Re: Budget Process for FY 2003

We look forward to beginning the upcoming process to develop the College's FY 2003 budget. We hope that, as the process has been restructured, we will be able to weigh various proposals from across the institution and ultimately make budgetary choices that reflect a common mission and agreed-upon strategic direction. Equally important, we think that it is an open and equitable process for reaching decisions and draws on the strengths of Grinnell's current governance system.

As we move into a revised budget process next year, we need to ensure that there is enough time for adequate communication among various groups involved i the budget process. This should strengthen the process itself as well as increase overall budget awareness and responsibility. We propose the following Time line:

Detailed budget proposals are crucial to the success of the process in that they will permit a more open and comprehensive discussion of budget choices. To that end, budget proposals should:

• Itemize specific budget requests, including both additions and reductions/deletions;
• Explain how each request fits in with the college's mission (if possible)and with the strategic direction of that office/department;
• Reflect on actual budget expenditures in past years and discuss how the budget proposal contemplates what has been and has not been successful; and
• Provide comparative information, where relevant and available.

We have begun to provide the Board with budgetary projections for two years beyond the budget year being developed (e.g., next year, we will submit the FY 2003 budget for approval to the Board and budget projections for FY 2004 and 2005). Longer-term budgetary planning allows us predict big expenses/reductions as well as changes in revenue sources in the future and how they will affect the College's base budget. For this upcoming budget process, to assist in formulating overall budget projections beyond FY 2003, we are asking that all departments/offices submit budget projections for FY 2004 and 2005. It is likely for many of you that these projections will maintain the status quo. However, to the extent that you foresee major expenditures or reductions in the future, it would be helpful to set that out in your projections.

Last Spring, President Osgood created a new committee, the Campus Budget Steering Committee, to oversee the budget formulation process. Instead of two faculty members appointed by the President, this committee includes the Chair of the Faculty and a second faculty member of the Executive Council. In addition to the Vice-President for Academic Affairs and the Treasurer, the other Vice-Presidents (who represent areas of the college that have not been represented in the process, such as Alumni Relations and Development and Student Services) and the Dean of College Services are also included. (The Assistant Treasurer will continue to provide financial analysis to support the budget planning process.)

During the process, this committee will review the overall budgetary parameters and goals, the current college statements of values, priorities, and strategies, and the totality of budget proposals submitted by each area of the college. The committee will make recommendations to the President on the difficult trade-offs in budget decisions, possible reductions, the possible re-allocation of resources, opportunities and goals for bringing new resources into the budget, and competing claims on fresh resources. Those involved at all stages of the process will be charged with recognizing the finite nature of the base budget and the importance of deciding which budget lines should shrink, grow, move, or be added to the budget for the coming year.

Because the academic mission is central to the college, the Campus Budget Steering Committee and the Executive Council will be the most significant collective bodies for strategic planning to assist the budget process. As set out above, the Campus Budget Steering Committee will bring budgetary matters to the Executive Council for discussion throughout the budgetary process. For those budgetary issues that affect our traditional faculty prerogatives such as the curriculum, the Campus Budget Steering Committee should accord the most respect to the priorities and choices made by the Executive Council with the guidance of the Dean. In other areas, the committee should bring issues to the Executive Council for advice.

In addition to consulting with the Executive Council, the Campus Budget Steering Committee also intends to consult with other groups, such as the Student Government Association, at appropriate points during the budget process to ensure a voice for different campus groups. The schedule set out in Section I contemplates these meetings. At the same time, in keeping with current practice, each area on campus will continue to hold responsibility for reviewing its own programs and endeavors and preparing a budget proposal that sets out its priorities and requests for the coming year. For example, within the rubric of admissions, the Office of Admission should submit a proposed budget after reviewing all admissions-related programs/endeavors, evaluating them, and setting out priorities. To the extent that priorities are presently set in discrete areas through a shared governance model (or other model that people believe works well), we should endeavor to maintain these structures and maximize their utility.

Both the Office of Institutional and Budget Planning and the Office of the Treasurer are responsible for assisting the budget formulation process. Neither office has the general responsibility for making programmatic choices (which have budgetary implications). Rather, our responsibility is to guide the budget process and offer the financial realities behind programmatic choices. We also hope to focus on budgetary issues that are cross-departmental in nature to ensure uniformity.

Implicit in the foregoing, the responsible people on campus should handle the development and oversight of their budgets and be held accountable. Within this context, we will provide regular budget information to them during the fiscal year as well as offer interim projections to assist them in their budgeting. In addition to individual accountability, we also need to ensure that our budget process encourages a broader sense of institutional perspective to guide specific budgetary choices. Simply put, the revised budget process should ensure that decisions are made by those in the best position to do so and that there exists a framework for them to think about budget decisions in relation to larger goals of the College.

We are very enthusiastic about the budget process and hope that it helps us to achieve many of our goals, including a common sense of institutional direction conjoined with budgetary choices that reflect that direction. We also hope that everyone has a sense of satisfaction in this process. Should you have any questions or wish to discuss this, please do not hesitate to contact us.