State Operating Budget
Responsible Office: Senior Associate Vice President for Budget and Business Affairs
Policy Title: State Operating Budget
Policy Type: Business Affairs
Policy Number: 100
Last Date Revised: 11/07/19
TYPES OF FUNDS
Funding of the State University of New York at Binghamton comes under several separate budgets. They are defined as follows:
State Operating Budget - funded from State support and campus generated revenue from tuition, fees, interest and other designated revenue for the ongoing operations of the University. Also known as the Revenue Offset fund.
Income Fund Reimbursable (IFR) - special revenue fund supported fully or primarily by campus generated income.
Examples of IFR accounts:
A. Fee and Fines
C. Grants and Contracts
State University Tuition Reimbursement Account (SUTRA) - special revenue fund dedicated to campus operations and funded from tuition revenue collected from summer session, contract courses, overseas academic programs and excess tuition revenue from the core instructional budget if applicable.
Dormitory Income Fund Reimbursable (DIFR) - special revenue fund which includes operating costs for the residence halls and related areas funded from room rental fees and charges.
Research Foundation - a private, non-profit educational corporation that administers externally funded contracts and grants for, and on behalf of, the University. The Binghamton University Division of Research administers the grants and contracts ensuring that the sponsors’ deliverables are fulfilled and the funds are used in accordance with all applicable rules and regulations. For more information please visit Division of Research.
Binghamton University Foundation - a not-for-profit corporation established to raise funds that further the purpose and mission of Binghamton University. The Foundation administers scholarships, awards, fellowships, and internships to deserving students. They also contribute funding for faculty hiring, retention, research support, academic programs, awards and grants, and various other programs. For more information visit Binghamton University Foundation
These University budgets differ from one another in terms of purpose, in source of funds and in the time horizon for which they are prepared. The State's fiscal year is April 1 through March 31, but the University’s fiscal year budget is based on the period July 1 through June 30th.
CAMPUS BUDGET PROCESS
President Harvey Stenger instituted the Binghamton University Road Map Process in the spring of 2012 to formulate the strategic plan for the University for the next 5 to 20 years. Each year, campus constituents submit proposals for review by the Road Map Steering Committee and the Faculty Senate Budget Review Committee. Road Map proposals are for initiatives, innovations, and ideas to move the University ahead as part of the NY SUNY 2020 Plan as well as promote the University's future growth, academic excellence, and operational excellence. The President and Provost work with these groups to make decisions on the items that will receive funding and will become part of the new budget in the upcoming fiscal year. Items that are selected for implementation will receive funding during the campus Financial Plan process. Divisions are also instructed to implement some items without receiving additional funding if possible.
The State operating budget is financed through regular State appropriations directly derived from tax income and from income generated by the University including tuition and designated revenue from fees.
The operating budget’s components are State support and campus retained revenue. In the past, SUNY System Administration has used different methodologies to develop the State support amounts for the campuses. Currently the State support portion of the operating budget remains flat from prior year. Campus budget allocations change based on tuition changes only.
Campuses estimate the campus retained revenue amounts for the upcoming fiscal year for tuition, college fees, interest income, and other revenue sources established by the State. After enrollment targets for the upcoming year are determined by the Provost in collaboration with other campus offices, the Budget and Accounting Offices work with the Office of Institutional Research and Planning to determine the estimated tuition revenue based on various factors such as the number of undergraduate students, graduate students and in state vs. out of state students. The tuition revenue projections are submitted to SUNY System Administration and, once approved, become part of the Financial Plan for the new fiscal year.
Agency Preparation and Budget Request – required by the NYS Constitution, and initiated by the New York State Division of the Budget (DOB) Director's “Call Letter”, each state agency estimates spending needs for the upcoming fiscal year and submits budget requests to the DOB. This is handled by SUNY System Administration, based in part on the enrollment and tuition revenue data received from campuses.
Budget Development – DOB develops budget recommendations for the Governor’s review and creates the Executive Budget for the Governor’s submission. DOB also drafts the appropriation bills and Article VII legislation.
The Executive Budget is typically submitted in January, on or before the 2nd Tuesday after the Legislature first meets in January, or in years following the election of a new Governor, not later than February 1. The Governor may choose to submit the budget earlier.
30 day amendments – the Legislature may not act on the Executive Budget until after this amendment period ends. The amendments typically reflect only technical changes or corrections to the Executive Budget.
Legislative Action – The Legislature negotiates changes to the Executive Budget and approves the Enacted Budget. The Senate Finance and Assembly Ways and Means committees are responsible for coordinating the Legislature’s review, involving public hearings and testimony, and Joint Conference Committee meetings as needed. The Legislature may make only 3 specific types of changes to the Governor’s proposed appropriation bills.
Strike (delete) an appropriation
Reduce the amount of an appropriation
Add new separate items that increase the amount of or add an appropriation
Once the Senate and the Assembly have agreed on the changes to the Executive Budget and have voted their approval, it officially becomes the Enacted Budget. The Governor has the right to veto any funds added by the Legislature. Gubernatorial vetoes may be overridden by the Legislature with a two-thirds majority in each house.
Implementation – DOB controls the release of state appropriation to the University as part of implementation management of the Enacted Budget. The appropriations in the Enacted Budget are “authorizations to spend”, or “not to exceed” levels.
DOB develops a Financial Plan which details expected spending and revenue, and is used to monitor actual cash flow against these estimates. This plan is updated quarterly.
DISTRIBUTING BUDGET TO DIVISIONS
SUNY System Administration further defines the Financial Plan by campus entity. Once released, the Budget Office calculates the beginning base allocations for each division based on the ending balance of base state allocation from the prior year and adding any authorized new funding from the Road Map process, typically around early June. Each division's financial representative is given the amount of their new fiscal year allocations which is distributed as follows:
• Diversity, Equity and Inclusion
• Academic Affairs
• Student Affairs
Each division is responsible for their spending within budget limits each year.
If allocation for contractual salary increases is received from the State in the Financial Plan, funding for those raises will be added to each division's base state allocation throughout the year as the raises become effective. For raises that have effective dates other than July 1st, the allocations are annualized. The Budget office calculates the amount of the allocation provided for each contractual salary increase as it occurs, then moves the allocation out of the undistributed account into each organization where the payroll expenses occur for the State purpose fund only. The other funds, IFR, DIFR and SUTRA, are not provided with additional allocation but must account for the increases when those budgets are prepared. If contractual salary increases are not funded by the State in the budget process, senior management determines how those will be handled.
Each division has the ability to place its allocation into the categories they deem appropriate. The division financial representative must provide the Budget Office with the detail allocation amounts by state account and object code where they want allocation to be placed. The due date for the detail information to be submitted to the Budget Office is July 1 each year. Some departments may have an earlier deadline so the division representative can review the detail in total before submitting to the Budget Office.
If an account is sub accounted, initial budget allocations will only be placed into the -99 sub account. Departments and/or divisions electing to move allocation from one sub account can do so by contacting the Budget Office. These transfers will be processed by the Budget Office as a temporary transaction which means the transfer will only be in effect for the fiscal year in which it is processed. It will not carry forward to the following fiscal year with the base budget. Allocation transfers that cross accounts or object codes will also be posted by the Budget Office upon receipt of an allocation transfer request.
Allocation must be placed in the budget object associated with an expenditure category. Major expenditure categories include:
Personal Service Regular and Overtime (PSR)
Personal Service Temporary (PST)
Other Than Personal Service (OTPS)
Personal Service Regular can be further defined with budget objects for Instructional or Non Instructional, Chair stipends or Also Receives and Holiday and Overtime. Year-to-date payroll expenses for the fiscal year are slightly higher than the annual salary amounts. This occurs because SUNY's fiscal year runs from July 1 through June 30th. There are 26.1 payrolls in every year except leap years which have 26.2 payrolls, thereby creating the additional expense. Human Resources notifies campus of the fractional payroll split each year. The divisions should allocate sufficient PSR allocation to accommodate this situation.
Personal Service Temporary can be further defined with budget objects for Adjunct Faculty, Graduate Students, Student Assistants and Other Temporary Service.
OTPS can be further defined with budget objects for supplies, contractual, travel,
equipment, student aid, utilities, and recharges. Allocations for all OTPS expenditures
should be aligned in the proper categories to sufficiently cover expected expenditures
for the fiscal year.
University Wide Allocations
The annual State budget separately identifies amounts for a number of University-wide programs. Also called temporary allocations, these amounts are for the funding of specific programs or initiatives. Each initiative is assigned a program manager at SUNY System Administration for oversight of financial activity. Allocations for the U-wide programs are distributed independent of the local campus budget and are administered from a separate, non-Binghamton, cost center. Allocations are approved by the SUNY Board of Trustees and distributed using certain formulas, award criteria, or historical distribution methodologies. Examples of U-wide programs are Academic Equipment Replacement (AER), EOP, Child Care, Strategic Partnership for Industrial
Resurgence (SPIR), Services for Students with Disabilities, and Small Business Development Center.
Allocations should reflect the actual annual activity expected to occur in the unit. It is equally important to post expenditures to the proper accounts. If a division must deviate from operating in this manner, the Budget Office must be informed of the plan and strategic reason for such. All expenditures are subject to University and State regulations. For more information, please see Business Affairs Policies.
Vice Presidents will establish specific allocation and funding rules for their respective divisions in addition to those listed in this document. Each Vice Presidential area is responsible for monitoring and maintaining its allocations versus expenditures throughout the year to ensure all activity is appropriate, within the account purpose, and accurate. Errors should be identified and corrected promptly. Units should not wait until year-end to make adjustments. If expenditures exceed allocations, they must be moved to other funds and, if applicable, charged fringe benefit costs.
SUNY posts a payroll encumbrance for PSR expenses based on the most recent payroll that has been processed. The encumbrance calculation provides an estimate of future expenditures based on the current filled positions as of that payroll. When reviewing account balances based on the encumbered amounts, please note that known vacancies, new hires, or salary adjustments for future periods will need to be factored in to develop true commitment levels because the encumbrance is based on employee salaries for the current pay period. There is no encumbrance calculated for temporary service.
The Budget Office monitors budget allocations versus expenditures and account balances at the division level. Divisions are responsible for their spending and must stay within their budget limits. If there are questions on available balances, the divisional financial representative will be contacted to discuss and resolve.
IFR AND SUTRA BUDGETS
Income Fund Reimbursable (IFR) accounts are made available to expend revenues related to self-supporting services and activities beyond those normally funded in the core instructional budget. This budgeting procedure permits the campus to respond quickly to opportunities and to better utilize its existing facilities, programs and staff. It allows the campus to conduct activities under contract with outside organizations, to recover costs from other entities using campus property or services, and to provide special services for students and other clients on a pay-as-you-go basis. The IFR program creates a mechanism for the campus to operate and administer educationally related activities according to the following objectives:
- To receive and expend external funds, other than those external funds which would normally be received by the Research Foundation, local foundations, and Auxiliary Service Corporations, on behalf of the campus.
- To conduct activities or provide services for students, clients and others who will be charged fees for such service, the sum of which is intended to be approximately equal to the direct and appropriate indirect expenses of providing such activities and/or services.
- To recover costs from agencies or organizations using campus property or services.
- To conduct activities under contract with a group of individuals, an organization or any public or private corporation providing needed services to the campus.
The campus is responsible for maintaining prudent financial control and balanced status for its reimbursable programs.
General IFR accounts are funded from revenue generated for services provided by the campus such as student fees, conferences, concerts, training, commissions, and other sources of income outside of tuition and mandatory fees. SUTRA accounts receive revenue from Overseas Academic Programs, Contract Courses, Summer and Winter Session, and if applicable, excess tuition revenue from the core instructional budget. IFR account managers must manage these funds in accordance with State laws and rules and must ensure that sufficient revenue is generated to support the commitments of expenditures.
Fringe Benefit Expense
In IFR accounts, fringe benefit expenses are charged on PSR and PST expenses except for student employees. In SUTRA accounts, fringe benefit expenses are assessed on expenditures except for summer session accounts. Fringe benefits for the summer session accounts are assessed, at a much lower rate, on revenue and paid by the campus as revenue offsets. Fringe benefit rates are established each year and provided to the campuses by SUNY System Administration.
IFR and SUTRA accounts can also be charged overhead assessments in accordance with SUNY policy MTP99-1. Currently most IFR accounts are charged a thirteen percent overhead assessment on revenue. IFR accounts set up to track campus charge-back operations are exempt from overhead charges, as are certain pass-through accounts such as the Sodexho food service IFR. See Management Procedure #205 for further detail.
IFR and SUTRA Budget Allocation
SUNY determines the campus IFR and SUTRA financial plan amounts based on the average expenditures for the past three years. It is optional, but not required, to assign allocations to individual IFR and SUTRA accounts, as these accounts operate on a cash basis. IFR and SUTRA allocations should be viewed as budgetary guides only with account cash balances determining operational spending limits.
If posted to an individual account, these allocations are based on prior year expense and known current year need. The new fiscal year allocations
are normally posted in September each year.
Accounts should have a positive cash balance at June 30. In following SUNY System Administration Policy, unrestricted IFR and SUTRA cash balances are permitted at 10% to 25% of operating disbursements at June 30. Division financial representatives must send explanation to the Budget Office for any cash balances not complying with this policy.
In accordance with the SUNY Income Fund Reimbursable (IFR) Program policy and guidelines issued December 2, 1996, SUNY campuses are authorized to establish funded reserves as necessary for the long-term financial stability of the IFR program. This includes accounts in the general IFR and SUTRA funds.
The following types of campus based reserves may be established:
- Reserve for Equipment Replacement and Repairs – Funds may be reserved to replace, repair or upgrade existing equipment. Reserves for equipment replacement should reflect replacement cost of the asset, not historical cost. Reserves for equipment repairs may not include routine maintenance costs. The reserve should only be used for major repairs, such as upgrades, that will extend the service life of the equipment, or materially increase the capacity or operating efficiency of the equipment. Equipment Replacement and Repair Plans should be based on a five-year planning cycle.
- Reserve for Facilities Rehabilitation and Renovation – Funds may be reserved to rehabilitate or renovate facilities currently used or which will be used in the future for campus programmatic purposes. This reserve represents funds that will eventually be used for expenditures that materially extend the useful life of the facility. The reserve level should be based on the estimated cost of the future improvements.
- Reserve for Program Stabilization – Funds may be reserved for program continuation and fluctuation. This reserve is established to accommodate short-term and long-term program plans, provide for program continuation during revenue downturns and to provide for the orderly and fiscally responsible termination of a program. Items that are to be considered in establishing the reserve include contractual commitments, appointments, refunds for prepayments, equipment and space leases, essential operating expenses, program evaluation and expansion possible liquidation costs associated with the unplanned elimination of a program.
A campus plan for the establishment and management of each of the above reserves must
be completed and maintained on file by the campus. This plan must include the following
• A complete description of the items or reason for which the reserve is being made and its relationship to the reimbursable program,
• The desired estimated value of the reserve as well as the periodic payments anticipated to be committed to the reserve, and
• The planned years for which the expenditures will be made from each reserve fund.
DIFR is a special revenue fund which is financed through revenue generated by payments for campus housing. The DIFR fund must be self-supporting and maintain reserves as established by the campus. As per SUNY policy, all residence hall income must be used only for residence hall capital and operating costs and residence life expenses. The DIFR Committee, made up of members from Residential Life, the Student Affairs Division, Physical Facilities, Operations, and the Director of Accounting, is charged with the responsibility of overseeing DIFR operations.
Each spring, SUNY System Administration requests each campus to submit their DIFR budget proposal for the upcoming fiscal year. Estimated expenses include PSR, PST, and OTPS, as well as overhead, debt service, equipment replacement and fringe benefits. Expected revenues are detailed by room type and headcount by each campus.
SUNY determines the financial plan amount for the DIFR fund based on the average of the last three years of expenditures. Once approved, the Accounting Office in consultation with departments, prepares the detail allocation by account and expenditure category to be submitted to SUNY in the Form 1 process which ultimately posts to the SUNY Financial System.
Positions that fall under the DIFR fund are controlled by lines and dollars and new positions cannot be added unless approved by the Director of Accounting or his designee. In addition, projections are made for all expenses over the number of years that the debt service extends. Each year, room rates are calculated based on the proposed DIFR budget and these projections are then approved by the DIFR Committee. The DIFR Committee then consults with the Student Area Presidents regarding the proposed room rates and various changes proposed for the DIFR budget. Room rates and the DIFR budget must be approved by the President before the DIFR budget is submitted to SUNY System Administration.
For any questions regarding the campus budget process please contact Erin Neske in the Budget Office