UNITS WITH FINANCIAL DIFFICULTIES
Oversight for Operations in Financial Difficulties
Overseeing the financial operations of the University is primarily the responsibility of the President and Vice President of Finance and Administration. Under RCM, the Vice Presidents are accountable for the financial performance of their RC units. Below are the general guidelines the VPFA Office will use to monitor units which have operating deficits. Resolving operating deficits is a University priority and need to be addressed in a timely manner.
This should be used as a guideline for the oversight necessary for RC Units in deficit. Each situation is unique; therefore, specific oversight plans may differ from the recommendations below. The specific oversight plan will be determined by the President in consultation with the VPFA and responsible VP.
1) Quarterly Reporting - Within 15 days of the quarter end (Sept 30, December 31, March 31), the Vice President responsible for an RC Unit with a cumulative or annual deficit will produce financial reports for the VPFA. Within three weeks of the end of the quarter, the Vice President of Finance and Administration and the responsible Vice President will meet to review the reports. These reports should include comparison to prior year actuals, comparison to the current year budget, and projections for the current year. (see attached reports) The reports should provide assumptions used and other relevant information so that the current status of the unit can be ascertained.
2) Preliminary Budget Plans- By December 31, the responsible Vice President will present to the VPFA a draft budget plan for the following fiscal year. This plan will include appropriate details and support to assure all parties that the planning and budgeting process for the next fiscal year is underway and that the unit is addressing the deficit situation.
3) Final Budget Plan - By March 1 (one month before the end of budget prep), the responsible Vice President will present a final budget plan to the Vice President of Finance and Administration. This budget will reflect what the RC Unit anticipates their budget to be for the following fiscal year. This will give the parties the appropriate time to respond to the 'final' budget before the end of the budgeting process.
4) Budget Changes - It is anticipated that any excess funds generated from revenue or personnel turnover will fall to reserve (to reduce the deficit). In the event that unanticipated revenue is generated from a new program, the appropriate Vice President may approve some use of these revenues to cover additional unanticipated expenditures.
5) Additional Monitoring - The responsibility to assure financial solvency flows up from the RC unit to the responsible Vice President. As described above, the appropriate Vice President must provide a budget plan from the RC unit that indicates how a deficit will be covered. The President may, upon discussion with the responsible Vice President, require additional steps to assure financial solvency. In conclusion, as unfortunate as they are, financial deficits and operational issues are a reality. The University needs to work as a team to make sure all units have a stable financial situation and that the financial situation of a unit does not deter from the mission of the University or the well being of our faculty, students or staff. Additional oversight is necessary for units in deficit situations to ensure the success of the RC Units and the University.
