Office of the Vice President for Academic Affairs
Responsible Office: Budget Office
Policy Title: State Operating Budget
Policy Type: Budget
Policy Number: 100
Last Date Revised: 9/16/15
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.
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 on the Research Foundation visit http://research.binghamton.edu
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 http://www.binghamton.edu/giving/
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 ALLOCATION 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.
STATE BUDGET PROCESS
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, including the Budget Allocation Process (BAP). 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, fees, interest income, dorm overhead, college fee 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, Revenue Accounting works 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 Revenue projections are submitted to SUNY System Administration and, once approved, become part of the Financial Plan for the new fiscal year.
STATE OPERATING BUDGET PROCESS - THE FINANCIAL PLAN
Agency Preparation and Budget Request – required by the NYS Constitution, and initiated by the Budget Director’s “Call Letter”, each state agency estimates spending needs for the upcoming fiscal year and submits budget requests to the Division of the Budget (DOB). This is done at the SUNY System level.
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.
PROCESS OF DISTRIBUTING BUDGET TO DIVISIONS
The Budget Office calculates the beginning base allocations for each division based on the ending balance for base state allocation from the prior year and adding any authorized new funding from the Road Map process around mid-May. Each division's financial representative is given the amount of their new fiscal year allocations which is distributed to each of the areas as follows:
• President and Related Areas
• Division of Diversity, Equity and Inclusion
• Vice President for Academic Affairs
• Vice President for Advancement
• Office of the Binghamton Foundation
• Vice President for Research
• Vice President for Student Affairs
• Vice President for Operations
• Undistributed - where contractual salary increases are held if they are provided by SUNY in the Financial Plan. (Division allocations are increased as each raise occurs.)
Divisions are responsible for their spending within budget limits each year.
Contractual Salary Increases
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 be-come effective. For raises that have effective dates other than July 1st, the allocations are annualized. The Budget office calculates the amount of the allocation increases 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 must provide the Budget Office with the detail allocation amounts by state account and object code where they want their 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.
The categories of expenditures include:
Personal Service Regular and Overtime (PSR)
Personal Service Temporary (PST)
Other Than Personal Service (OTPS)
Personal Service Regular can be further placed in Instructional or Non Instructional categories as well as Chair stipends or Also Receives and Holiday and Overtime. Management Confidential, Non Instructional Professional and Classified are all grouped together. Personal Service Temporary can be placed in Adjunct Faculty, GATAs, student assistants and other temporary employees. Allocations for Travel, Equipment, Recharges and other OTPS expenditures should be aligned in the proper categories to sufficiently cover expected expenditures for the fiscal year.
Each Division has the ability to place its allocation into the categories they deem appropriate. However, allocation is restricted to the maximum SUNY limits for PSR/PST and OTPS. SUNY requires that the campus maintain a certain allocation percentage of OTPS for operations. Currently the OTPS requirement is 12 percent of total State operating budget.
University Wide (or Temporary) 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. Campus allocations for the U-wide programs are distributed separately from the campus amounts in the Financial Plan. Allocations are approved by the SUNY Board of Trustees and distributed using certain formulas or historical distribution methodologies. Campuses receive the U-wide allocations in early fall after the Form 1 process is completed. Examples of U-wide programs are Academic Equipment Replacement (AER), EOP, Child Care, and Small Business Development Center. In some years, allocations for the U-wide programs are provided throughout the year as DOB releases allocation.
Allocations should reflect the actual annual activity expected to occur in the unit. It is equally important to post expenditures to the proper accounts. The Business Office will process expenditure transfers when expenditures have been incorrectly charged, but expenditures should be classified correctly in the first instance.
Allocations for all categories including travel, equipment, recharges and other OTPS expenditures should be sufficient to cover estimated annual expenditures to avoid potential deficits.
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 it’s allocations versus expenditures throughout the year. If expenditures exceed allocations, they must be moved to other funds and, if applicable, charged fringe benefit costs.
The Budget Office also monitors account balance levels during the year. If there are questions on available balances, the Budget office will contact the financial representative for the division to resolve any issues.
Throughout the year, departments submit position requests for any additions to or changes to their PSR or PST lines. Changes include new positions created, changes to FTE worked, salary amounts, accounts where a person is charged, extra service payments, or any other salary related transaction. The position requests must be approved by the Dean, Division, and the Budget Office prior to making any changes to the employee's record in the SUNY system. Once all approvals have been obtained, HR can enter the new data in the SUNY system and charge the person to the proper accounts. Please see the Human Resources web site for detailed instructions.
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. The Budget Office will notify the division representatives of the fractional payroll split each year. The Divisions should allocate sufficient PSR allocation to accommodate this situation.
PSR Allocation Assignment
SUNY posts a payroll encumbrance amount based on the most recent payroll that has been processed for PSR expenses. 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.
Other Allocation Issues
Account activity should be reviewed periodically throughout the year by the Department and/or Division to ensure all activity against the account is appropriate and correct. Errors should be identified and corrected promptly. Units should not wait until year-end to make adjustments.
Internal transfers of State purpose allocation between organizations or expenditure categories can be requested throughout the fiscal year by submitting a form to the Budget Office. The forms can be obtained at the Budget Office web site, http://budgetoffice.binghamton.edu . If allocation transfers cross departments or divisions, the area whose budget is being reduced should submit the form and copy the department who will be receiving the additional allocation. Please note that allocations cannot be moved between funds or fiscal years.
Effective with Fiscal Year 2013-14, Binghamton began using the SUNY System for all budget and expenditure activity in place of its Oracle system. Using the SUNY System only provides the ability for Departments and/or Divisions to create sub accounts to be used to track particular areas, similar to Project Accounting in Oracle. Departments must request any sub accounts for the SUNY system to be set up through the Business Office.
Budget allocations will only be placed into the -99 sub account. Departments and/or Divisions will have the ability to move allocation from one sub account to another using the SUNY legacy transaction process called SUBS. Each Division will identify the employees who will need access to the SUNY system. The Division Financial Representative will notify the Budget Director the names of people who need access and their SUNY User ID. The Budget Office will request that access to the SUNY CICS System be given to these people. The Budget Office personnel will train users on how to access CICS and post any allocation transfers between sub accounts. Allocation transfers that cross accounts or object codes will continue to be posted by the Budget Office upon receipt of an Allocation Transfer Request form as noted above.
The Budget Office monitors budget amounts versus expenditures at the VP or Division level. Divisions are responsible for their spending and must stay within their budget limits.
Departments also have the ability to move expenditures to correct errors and to properly align expenditures with accounts. For those transactions, the department should contact the Business Office. The Business Office also requires agreement by all areas whose expenditures are being adjusted. (See http://www.binghamton.edu/operations/policies/business-affairs/budget-allocation-expenditure-revenue.html.)
All OTPS expenditures are subject to University and State regulations. See http://binghamton.edu/operations/policies– Purchasing, and others for details.
IFR AND SUTRA BUDGET
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
Fringe benefit expenses are charged on PSR and PST expenses except for student employees in General IFR accounts. In SUTRA accounts, Fringe Benefit expenses are assessed on expenditures and paid by the campus as revenue offsets except for Summer Session accounts. Fringe Benefits for the Summer Session accounts are assessed 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 chargeback operations are exempt from overhead charges, as are certain pass-through accounts such as the Sodexho Food Service IFR.
See Business Affairs Management Procedure 205 for further detail.
Requests for allocation amounts for the Special Revenue Funds IFR and SUTRA are sent to the Division Financial Representatives around February each year by the Budget Office. Requested allocations should reflect the amount that units expect to spend for the operations during the upcoming fiscal year. Allocations are posted on the SUNY system to individual IFR and SUTRA accounts in line with departmental requests up to the total allocation amount authorized by SUNY each year. SUNY determines the Campus IFR, SUTRA, and DIFR Financial Plan amounts based on the average expenditures for the past three years. The new fiscal year allocations are normally posted by August each year.
Please note that IFR allocations should be viewed as budgetary guides only. IFR account cash balances determine operation spending limits.
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.
Documentation for Reserve
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 information:
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.
- 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 Finance, is charged with the responsibility of overseeing DIFR operations. The Director of Finance establishes the annual DIFR budget using the dollar amount provided by SUNY each year which is based on the average expenditures for the past three years.
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 Finance 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.
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 System Administration reviews the campus requests. SUNY determines the Financial Plan Amount for the DIFR Fund based on the average of the last three years of expenditures. Once approved, the campus (the Business Office) prepares the detail allocation by account and expenditure category to be submitted to SUNY with the other funds in the Form 1 process.
The same detail information is used to post the DIFR budgets to the SUNY Financial system. The Director of Finance works with each area that controls their portion of the DIFR budget to determine where the allocation will be posted in the system.
For more information on campus financial policies please see:
For any questions regarding the Campus Budget Process or the State Budget Process, please contact Kris Gregory in the Budget Office at 607-777-2047, or extension 7-2047.