Implementation & Working Groups

Budgeting Approach Working Group

The Budgeting Approach Working Group will focus on specific approaches to budgeting that will be adopted by the University. Specific budgeting needs that will need to be addressed are: managing a holistic general funds budget allocation process including carry-forward balances, budgeting all funds, SIMBA integration and reporting, and others.

Task Force Recommendations:

• Budgeting All Funds: Incorporate total university sources and uses in the five-year budget planning process.
• Permanent and Temporary Budgets: Develop a comprehensive General Funds budget that shows how sources and uses are deployed annually and eliminates the separation of funding into “Permanent” and “Temporary” budget categories. Provide budget allocations that allow individual units to manage sources and uses holistically.
• Carry-forward Funds: Consistent with developing budgets based on total sources and uses, include carry-forward balances as one component of General Funds sources in a holistic budget approach. Establish clear principles and categories that allow carry-forward funds to roll into subsequent years.
• Fringe Benefits: Include fringe benefit funds in the total E&G allocation, so that units manage those costs as part of the overall budget.

Multi-Year Planning Working Group

The Multi-Year Planning Working Group will focus on an approach to do five-year budget planning for the University as a whole, and within each budget unit. The approach will answer questions such as: how we define a budget unit; how we create a five-year budget; and issues with forecasting and accuracy, among others.

Task Force Recommendations:

• Multi-year Budgeting: Create a five-year operating and capital budget planning process that uses integrated data to forecast at the individual unit and total institution levels.
• Non-General Funds (Auxiliary, Gifts, Endowment Income, and Sponsored Research): Include non-General Funds sources and uses (auxiliary, gifts, endowment income, and sponsored research) in the overall five-year budget forecast for each unit.

Salary and Job Classification Working Group

To align with the new budgeting approach, the Job and Salary Classification Working Group will create new policies and processes to optimize the human resource classifications. The new budget approach, recommended by the University's Strategic Budget Task Force, urges the University to shift away from the current practice of categorizing general funds as either "permanent" or "temporary." The Job and Salary Working group will implement their recommended changes in three phases.

Phase I began on July 1, 2020, and asked all hiring managers to review posted or frozen new staff positions and categorize them into standing or fixed-term positions based on the job description and work. Traditionally, standing positions are funded from the permanent budget, while fixed-term positions were funded through the temporary budget.

Phase II will focus on recategorizing current staff positions. New category names will be explored and potentially adapted to reflect these changes.

Phase III will examine the non-tenure-track faculty categorizations. This process will involve the University Faculty Senate, which will help determine if any non-tenure-track faculty job category changes are needed.

All phases are expected to conclude by June 30, 2021.

For more information, visit our FAQ or our Penn State Today article.

Task Force Recommendations:

• Salaries: In conjunction with establishing holistic General Funds budget allocations, update policies and processes related to salary identification and reporting.

Capital Planning Working Group

The Capital Planning Working Group will focus on creating new processes, policies, and planning cycles to best align with the new budgeting approach to create a more holistic approach to planning and budgeting.

Task Force Recommendations:

• Capital Plan Development: In conjunction with taking a more holistic approach that budgets all funds on a multi-year basis, the process for developing and authorizing the University Capital Plan should be examined to better align university priorities, the capital plan, and the annual operating budget.
• The Intersection of Operating and Capital Costs: Incorporate the cost of ongoing operations – facilities operations, utilities, and maintenance, as well as programming (such as staff, equipment, and recurring costs) – as part of the capital planning process, so that the total impact on the operating and capital budgets is transparent.