April 7, 2009

Divisions helped make budget-cut decisions

Provost Thomas Rosenbaum might have had an easier time cutting $143 million from the University budget if he had done it himself, as did a number of his peers at many institutions. Instead, the process of making the cuts was long and complex and involved many of the University’s upper level administrators.

“From the beginning, there was a consensus among senior leaders that the budget should be tailored to the goals and priorities of the University, taking into account the particular needs and situation of each unit. So across-the-board cuts were ruled out early in the process,” said University spokesman Steve Kloehn in an e-mail.

The cuts were in response to the national economic downturn and a 30-percent loss to the University’s endowment.Rosenbaum spearheaded the project, working with Vice President for Administration and Chief Financial Officer Nim Chinniah, Vice President for Financial Strategy and Budget Kermit Daniel, and Vice President for Strategic Initiatives David Greene. But the decisions were not made from the top down.

In order to make cuts appropriate to eacdivision, the budget team met with division heads and officers and set targets for cuts. They in turn supervised “departments, offices and other work groups,” Kloehn said.

According to Kloehn, the targets were obtained “through a process of discussion.” Administrators across the University were asked to propose how they would cut their budgets by three, six and nine percent. When the Provost’s office decided to cut budgets between 2.5 and 5 percent, administrators sketched out further proposals. Kloehn said that cuts were made with the intention of ensuring that none of the University’s academic missions would be compromised.

“The president and provost made a few principles clear. No budget cut should place the University’s core academic mission at risk, or permanently impair a unit’s prospects for long-term growth and success,” Kloehn said. “Finally, savings should not come at the expense of another unit on campus. Within those guidelines, deans and officers were given a great deal of freedom...”

After the second meetings, the budget team faced a big job: understanding the proposals they received, ensuring they met the guidelines laid down by the president and provost, and providing that all proposals worked in concert with each other. When problems arose, the officer or dean involved met with the budget team and came to a compromise.

“While each plan was different, every unit participated in finding and committing to savings, and all fell within the original range proposed,” Kloehn said.

Asked whether an increase in the reported loss to the endowment, originally put at 23 percent and later adjusted to 30 percent, had caused any bumps in the budget-cut process, Kloehn replied that it had not.

“Based on those calculations, the president and the provost developed an idea of what it would take to keep the University financially healthy, now and for many years to come.”