8.4 Institutional Budget Request
Under constitutional authority, the Board of Regents (BOR) approves the annual budget request for the University System of Georgia (USG). Funding is provided to the University System by means of a funding formula, which establishes a basis for budgetary need linked to enrollment growth, increases in facilities square footage and other operating factors. Funds appropriated based on the formula are received as a “lump sum”, which the Board of Regents allocates to USG institutions. In addition, there are several component units of the University System of Georgia that receive direct appropriations from the Georgia General Assembly.
This section describes the procedures used to develop the annual budget request, establish tuition and fee rates for USG institutions, and procedures for making budget adjustments during the course of the fiscal year.
There are several programs and “pass-through” line item payments that collectively comprise the total annual state funding for the University System of Georgia. These programs and line item payments belong to the following program budget categories:
- Teaching (Resident Instruction and Public Service Institutes)
- Other Organized Activities (former “B” unit/budget programs, other non-Teaching programs and “pass-through” line item payments).
8.1.1 Teaching (formerly “A” Budget)
The Teaching program houses state funds received by the University System of Georgia (USG) throuogh the funding formula. The state appropriates these funds to the USG in a lump sum, which the Board of Regents distributes to USG institutions in accordance with system priorities and needs. The bulk of the USG’s budget resides in this program which is mainly devoted to funding Resident Instruction activities at the USG institutions with some funding support for the Public Service Institutes.
8.1.2 Other Organized Activities (formerly “B” & “C” Budgets)
The Other Organized Activities portion of the USG’s overall budget is composed of funds the state approrpriates directly to specific entities and “pass-through” line items within the USG’s budget. Included in this group are:
- All former “B” units
- Research Consortium
- Special Funding Initiatives
- Line item “pass through” payments (i.e., payments to the Georgia Military College, Georgia Public Telecommunication Commission, Georgia Cancer Coalition)
- Any other programs or “pass-through” line items receiving a direct approcpriation outside of the Teaching program.
Each year, Fiscal Affairs at the BOR develops the annual budget request for the University System. The budget request is in accordance with instructions from the governor’s Office of Planning and Budget (OPB). The annual budget request generally has four components:
- Formula Earnings
- Enhancement Request
- Prioritized Program Budget Request
- Capital Budget Request
8.2.1 Formula Earnings
The primary USG funding mechanism is the funding formula. The funding formula generates funds for various factors such as enrollment, maintenance for new facilities, continuing education, and fringe benefits.
All USG institutions use the Curriculum Inventory Reporting System (CIRS) to report enrollment data for each semester. The Office of Strategic Research and Analysis at the Board of Regents provides a report of credit hours for each institution and the University System Fiscal Affairs. The report categorizes credit hour information in various groupings as required by the funding formula. The funding formula calculates the change in funding required for faculty, staff, and support expenditures caused by the change in credit hours. This is referred to as enrollment earnings/losses or workload adjustment.
Operation and Maintenance of New Facilities
The funding formula provides a specific dollar amount/per square foot for maintenance of all new space. To determine the total new square footage each year, the starting point is the report FRPT 60A that is provided to Fiscal Affairs in May. The report includes all changes that institutions have made in the facilities inventory reporting system in the fall and spring of each year. The report lists the buildings and square footage at each institution for resident instruction and auxiliary/other use.
Fiscal Affairs sends each institution a copy of its FRPT 60A, along with instructions and a form to add or delete square footage for resident instruction. If a building is expected to be in operation in the fiscal year for which the funding is being requested, and has not been included in the system, i.e. not reflected in the FRPT 60A, it should be reported separately on the Adjustments to Square Footage form, by June 30th of each year. Later, in the fall, the institution should update the system for the changes made in the adjustments form.
The total resident instruction square footage from FRPT 60 A, along with changes on the Adjustments to Square Footage form, represents the total square footage requested. The difference between this total and the total reported to OPB in the prior year’s formula is the incremental change in square footage.
Note: Please refer to Section 18.0 for information on major repair and rehabilitation funds.
There are two components to the fringe benefits request: retiree benefits and rate changes. In June of each year, Fiscal Affairs requests all institutions to submit their fringe benefits request for retirees. The request details the number of retirees in the current year, the number of projected retirees, and current and projected expenditures for health insurance and life insurance premiums for the employer’s contribution. The difference between the current and the projected expenditures is the basis for the fringes request for retirees in the formula.
In addition, any projected rate changes for health insurance, life insurance, and retirement premiums and payments are factored into the formula as well. In October, the Board of Regents approves the employer and employee rates for the new calendar year. If there are any rate changes, Fiscal Affairs requests each institution to submit the amount required for the rate change. Each institution submits the number of covered employees in December and January for each plan/option, and actual expenditures for the two months for each plan. The difference is the incremental funds required to fund a rate change.
The funding formula includes a component for continuing education, which comprises funding for a select number of public service institutes, minimal staffing support, and a dollar amount generated per continuing education unit (CEU) generated. Each year, institutions must report their CEU production to Fiscal Affairs according to the schedule established by the Vice Chancellor for Fiscal Affairs.
8.2.2 Enhancement Request
The instructions from the OPB will usually indicate to what extent each agency can request additional funds beyond workload funds through the formula and continuing special funding initiatives, research consortium and lottery funds. The Chancellor’s Presidential Advisory Group is instrumental in obtaining feedback from other USG presidents and prioritizing strategic needs for the system as a whole.
8.2.3 Prioritized Program Budget Request
All USG units that are designated as “other organized activities” have to complete the Prioritized Program Budget request each year. OPB furnishes the formats, forms and instructions to be used in developing and submitting these requests. Each unit’s request includes among other items information on the past two fiscal years of actual expenditures, current fiscal year budgeted expenditures, and a projected budget for the funding year of the request. As discussed earlier, the state directly appropriates funding to each unit or line item within the “other organized activities” group.
8.2.4 Capital Budget Request
The Office of Real Estate and Facilities maintains a master plan for capital development of each institution. The development and maintenance of such plans involve continuous study by the office of the University System of Georgia chief facilities officer under the supervision of the Chancellor and the respective institutions. Based on the needs and priorities of the University System, the Regents select projects to be included in the capital request.
Each year, the Board of Regents establishes tuition and mandatory fee rates for all USG institutions. Although rates are linked to formula funds through a cost sharing percentage – 75% of formula cost is borne by the state, 25% is borne by students – actual rates may be adjusted annually according to a host of factors. Institutions are authorized to request differential tuition rates for nationally-competitive graduate and professional programs and are authorized to set rates for distance learning courses and programs, subject to the restriction that rates cannot be less than those established by the Board of Regents for resident undergraduates at each institution.
Mandatory fees are fees charged to all enrolled students. They include, but are not limited to, fees for intercollegiate athletics, student activities, student health services, parking, transportation, and/or facilities development.
8.2.5 Board Approval of Budget Request
The Vice Chancellor for Fiscal Affairs, along with senior staff in the University System Office (USO), presents the operating and capital budget request to the Board. The Board reviews and approves the annual budget request which is subsequently submitted to OPB by the OPB deadline date (usually September).
8.3.1 Tuition – Revenue Projections from Institutions
In September each year, each USG institution completes and submits the Revenue Projections form to Fiscal Affairs. It includes the following components:
- Actual revenue from various sources for the prior year
- Budgeted revenue for the current year
- Amended revenue for the current year
- Projected revenue for the following year
- Amount of revenue generated from a 1% increase in tuition
- Impact on the HOPE program from a 1% increase in tuition
The revenue projections are used to:
- Compute the funds generated from various levels of tuition increase
- Determine the impact on HOPE at various levels of tuition increase
- Adjust the internal revenue on the institution’s allocation sheet for the original budget for the following year
The Board determines the tuition rate increase for all USG institutions.
8.3.2 Mandatory Fees
All mandatory fee requests are due from the institutions to Fiscal Affairs in December. Institutions must submit a fee request package. Each fee request package includes the following:
- Summary of fee requests including revenue
- Detail of revenue projection for each mandatory fee
- Financial data form with actual and projected revenues and expenditures
- Mandatory student fee participation form
In accordance with Board Policy 126.96.36.199, institutions must have a Fee committee; composed of at least fifty percent (50%) students, except in special circumstances when a general purpose fee is instituted system-wide by the Board of Regents. The committee shall include at least four students, who shall be appointed by the institution’s student government association (SGA). This committee is charged with reviewing and voting on the student fee request. The form shows the names of the student fee advisory committee members and their vote on the action. The Board of Regents does not require approval of the request by the committee.
Analysts in Fiscal Affairs review the fee requests submitted by each institution. After review, Fiscal Affairs makes recommendations to the Chancellor and the Board of Regents.
8.3.3 Housing and Food Service Fees
All housing and food service fee requests are due from the institutions to Fiscal Affairs in January. Institutions must submit these along with their fee request package. Each request must include the following:
- Summary of requests including revenue impact
- Detail of revenue projection for each type of fee
- Financial data form with actual and projected revenues and expenditures
In addition, reserve amounts for auxiliary enterprises should be detailed with projected future expenditures. Analysts in Fiscal Affairs review the fee requests submitted by each institution. After review, Fiscal Affairs makes recommendations to the Chancellor and the Board of Regents.
8.3.4 Miscellaneous Fees
Institutions are required to submit an updated list of all miscellaneous fees in January. The president of each institution has the authority to approve miscellaneous fees.
Note: Reporting to the Board is for informational purposes only.
8.3.5 Approval of all Tuition and Fees
The Board of Regents approves tuition rates and all mandatory fees in April. The Chancellor approves housing and food service fees at the same time.
The institutional budget request provides information to the Board of Regents regarding key priorities and issues at the campus level. This aids Fiscal Affairs in developing its recommendations to the Chancellor for allocating formula funds.
8.4.1 Institutional Budget Plans
In January each year, all institutions submit a budget plan and request with three distinct sections:
- Budget plan for base budget, addressing opportunities and challenges faced by institution, enrollment changes and trends, budget priorities and issues
- Plan to use any projected formula funds earned by the institution
- Prioritized new funding request from the strategic allocation pool
Each institution submits their original budget for approval by the Board of Regents. The original budget and subsequent amendments serve as the basis upon which institutional financial performance is assessed each year through regular reports to the Board.
During the legislative session and subsequent review of the budget by the governor, institution budget officers should ensure that current fiscal year budget records are accurate and complete. Current, amended budget records in the financial system facilitate the development of the proposed budget for the new fiscal year*.
* Note: Institutions using the ADP EV5 Payroll/Benefits system and the GeorgiaFIRST model of the PeopleSoft Financials Management System must ensure that records from the ADP EV5 system are correct and accurate before the records are captured in the Budget Prep module.
8.4.2 Institutional Budget Conferences
Between January and March of each year, the Vice Chancellor for Fiscal Affairs, along with senior staff, meet with institutional representatives to discuss:
- Budget plan
- Enrollment trends
- New funding requests
- Fee requests
- Other issues and priorities
8.5.1 Salary and Wage Increases
Each year, Fiscal Affairs will issue a salary administration statement that provides guidelines for awarding salary increases for that fiscal year. Salary increases are merit-based, reflecting each employee’s performance evaluated on an annual basis. Merit increases will generally be distributed on a percentage basis around the average percentage increase as provided for by state appropriations. Merit salary increases that exceed the range established by the salary administration statement must be documented on an individual basis.
Additionally, and subject to Board policy, institutions may make salary increases for promotions and reclassifications or to address issues of salary inequities, subject to the availability of funds. Please refer to Board policy section 8.3.12 for additional information regarding salary and wage increases for faculty.
8.5.2 Budget Allocations
Upon distribution of the final allocations by the Office of Fiscal Affairs, institution budget officers will work with the allocated budget authority at the campus level to distribute the funds among the various units on campus.
The allocation strategy of formula funds to institutions may include a combination of the following:
- A percentage of funds generated by the formula (not including tuition revenues).
- A percentage based on performance factors related to graduation, retention and sponsored program funding.
- A percentage baed on share of budget reductions.
- “Strategic allocations” from the remaining pool of funds that are allocated based on several factors, such as:
- System-level priorities and goals
- Institutional needs
- Equity adjustments
8.5.3 Budget Preparation at the Institutional Level
Once the institution’s budget authority makes funding decisions for the upcoming fiscal year, the financial officers at the institution will complete the development of the proposed budget for the coming fiscal year. This process includes the budgeting of personal services, fringe benefits, and non-personal services for the institution. The process should conclude with the reconciliation of the budget to the final allocation by the Regents and the preparation of summary schedules identified by the Regents. This reconciliation process should utilize queries and reports in the financial system.
The development of the proposed budget for the upcoming fiscal year should also include budgeting for any planned use of reserves from prior years. Current legislation (House Bill 1128) allows institutions to carry forwarad revenue collected from tuition (not to exceed 3 percent of tuition collected), departmental sales and services, continuing education fees, technology fees, and indirect cost recoveries. These revenues do not lapse and are reserved for future use. This legislation is effective through June 30, 2013.
8.5.4 Submission of Proposed Budget
In order to administratively review proposed budgets prior to approval by the Board of Regents, institutions will need to submit their proposed budgets in accordance with a schedule determined by Fiscal Affairs. Part of the submission process will require the institutions to complete several schedules on-line according to a deadline established by Fiscal Affairs. These schedules can be accessed via the Fiscal Affairs web site: https://www.usg.edu/budgets/.
Note: You will need to select your institution and enter the appropriate Campus Access Code to access this page.
Institutions will be required to submit the following proposed budgets:
- Education & General
- Auxiliary Services
- Student Activities
Upon completion of the on-line submission, each institution will submit one (1) hard copy of the original budget with the following schedules:
- Schedule C – Statement of Revenue
- Schedule C-1 – Detail of Available Funds
- Schedule D – Summary of Budget Functions
- Schedule D-1 - Summary of Budget Functions by Fund Source
- Schedule E – Statement of Personal Services
- Schedule E-1 – Detail of Institutional Fringe Benefits
- Schedule F – Schedule of Non-personal Services
- Schedule G – Departmental Budget
- Schedule G-1 – Detail of Personal Services
- Schedule J – Schedule of Employee Salary Ranges
- Schedule K – Schedule of Salaries $100,000 and over
- Schedule L – Total Raises for Filled Positions Only
- Revenue/Expense Compare
8.5.5 Board Approval of Institution’s Original Budget
In June, the Board approves the educational and general budget, auxiliary budget, capital budget, and student activities budget for all institutions.
The budget amendment process is critical to ensuring that expenditures made during the course of the fiscal year are supported by budgets. Failure to amend budgets to meet changing circumstances can result in an overexpenditure of funds and lead to audit findings.
8.6.1 Identification of Funding Sources
Funding Sources are designated by a 5 digit numeric code*, which is used to denote the specific source of funding for both revenues and expenditures.
* Note: For institutions using the GeorgiaFIRST model of the PeopleSoft Financials software, the Funding Source is identified by the Classification code.
Note: For budget and budget amendment purposes, institutions should use only those codes identified in Section 2.4, or new codes published by the BOR Fiscal Affairs. New funding source codes are sometimes required due to changes in state appropriations, and these new codes must be utilized in budget development before this manual can be revised.
The following listing illustrates sample high-level funding source codes. Obviously, the XXX portion of these examples must be replaced with valid numbers.
- 11XXX General Operations
- 12XXX Research Consortium
- 13XXX Special Funding Initiative
- 14XXX Lottery Funds
- 15XXX Department of Administrative Services Indirect Funding
- 16XXX Major Repair and Rehabilitation Funding
- 17XXX Governor’s Emergency Fund
- 18XXX Loan Fund Operations
- 41XXX Departmental Sales & Services
- 42XXX Auxiliary Services
- 61XXX Sponsored Operations – Federal
- 62XXX Sponsored Operations – State
- 63XXX Sponsored Operations – Local
- 64XXX Sponsored Operations – Private
Refer to Section 2.4, Funding Source Codes for a complete listing and definition of each individual funding source code.
8.6.2 Revenue Adjustments
Throughout the course of the fiscal year, various factors necessitate the adjustment of revenue estimates within the budget system. For example, if fall semester tuition exceeded the original budget estimate, the institution would amend its budget to reflect the increased revenues. Revenue estimates should be reviewed and amended on a quarterly basis to reflect projections of either increased or decreased revenue collections during the fiscal year.
8.6.3 Appropriation Amendments
Ultimate expenditure authority within the financial system resides at the appropriation level; i.e., expenditure appropriation authority cannot be exceeded. At a minimum, appropriations exist for personal services and operating expenses. If expenditure authority for any of these categories is to be increased or decreased, the appropriation will need to be adjusted by the budget officers. The sum of the appropriation authority must equal the sum of the revenue estimates for general funds.
8.6.4 Organization Amendments
Individual departments are defined in the financial system as organizations and may be created to more effectively manage revenue collections and expenditures. The sum of the organization budgets must equal the appropriation budgets.
8.6.5 Budget Amendment Submission
Institutions are required to submit budget amendments on a quarterly basis to the Board of Regents for review and approval. In preparing the quarterly budget amendment, institutions must reconcile by funding source * the estimated revenues, appropriations, and organization budgets with the Budget Confirmation Report that is distributed by Fiscal Affairs, as noted in Section 8.6.7. Queries and reports within the institutions’ financial systems should be used to balance the revenues, appropriations, and organization budgets.
* Note: For institutions using the GeorgiaFIRST model of the PeopleSoft Financials software, the funding source is identified by the Classification code.
8.6.6 Budget Amendments Greater than $1 Million
Any individual budget amendment that exceeds the threshold of $1,000,000 must be noted during the submission of the budget amendment to Fiscal Affairs and considered separately for approval.
8.6.7 Budget Confirmation Report
Each quarter, Fiscal Affairs will send the Budget Confirmation Report to all institutions. This report details all state funds allocated to the institution for the fiscal year. Institutions should make sure that all funds shown on the Budget Confirmation Report are budgeted in the following budget amendment.
8.6.8 Final Cleanup Amendment
In addition to the quarterly budget amendments, institutions will have one final opportunity to amend their numbers toward the close of the fiscal year, in the last week of June. The objective is to make sure that institutions have sufficient expenditure authority in various line items in the budget, and prevent any over-expenditure in a category. The final amendments are sent to the state Office of Planning and Budgets (OPB), who will then transmit the amendments to the state Department of Audits and Accounts.