Budget Process and Procedures

The budget is primarily driven by enrollment expectations (including the expected first-time freshman class, transfers, discount rate and the tuition and fee pricing).  The CFO maintains a predictive model for these elements of the budget which is constantly updated to analyze potential changes and to reflect experience to date.

While the budget philosophy is that of a zero based budget, in practice the prior year results and current budgets serve as a basis for identifying changes proposed for the future year. 

For the Fiscal Year 2016 and through Fiscal 2021 the Senior Leadership Team has undertaken to identify at least $1 million in operating expense cuts or specific revenue enhancements each succeeding year to help offset planned salary increases and expected increases in non-controllable items.

October-December - Preparation of the base budget for following fiscal year.  This generally takes the form of Excel worksheets containing historic performance within each department, serving as a basis for establishing needs for the next year.  Each Vice President may reallocate dollars within their pool among different departments.  Tentative budgets will be presented at the February Board meeting.

November 1 - Budget worksheet templates provided to area VPs .  Templates with current and historical information will be provided to each VP by November 1.  Templates should be distributed by the area VP to the specific department.  Budget requests returned to the VP should be reviewed and approved by each area VP before forwarding to the Business Office. 

November 15 - Basic Budget Assumptions Deadline - Senior Leadership Team finalizes basic budgeting assumptions (health care, insurance, etc.) for the next fiscal year budget as first item on Senior Leadership agenda.

January 10 - Budget requests due to the Business Office .  Requests approved by each VP are due to the Business Office no later than January 10.  Departments may be given an earlier deadline in order to give the area VP sufficient time to review and approve.

October 15 - October 31 - Approval of Fee Schedule for following fiscal year .  Hendrix Senior Leadership Team approves fee schedule to recommend to the Finance Committee for budget purposes and admissions planning.

January 15 - January 31- Finance Committee and Executive Committee review of Tuition & Fees Schedule .  Review of Tuition and Fee Schedule for following fiscal year to be referred to the Finance Committee of the Board of Trustees for consideration at the February meeting.

February Trustee Meeting - Board Approval of Fee Schedule and Review of Tentative budget .  Tuition and Fees Schedule for the next fiscal year are approved at the Board of Trustees meeting.  The full Board must approve the Tuition and Fee Schedule on a recommendation from the Finance Committee.  The tentative budget for the next fiscal year is presented to the Finance Committee for review/discussion.

May Trustee Meeting - Board Approval of Tentative Budget .  Approval of tentative budget at the Board of Trustees meeting.  The full Board must approve the next year's tentative budget on a recommendation from the Finance Committee.  The Budget is considered tentative until the admissions results are identified for the Fall entering class.

October Trustee Meeting - Board Approval of Final Budget.  Approval of Final Budget by Executive Committee, Finance Committee, and full Board of Trustees if significant changes are made to the Tentative Budget. 

    This schedule will be amended annually to reflect changes in the academic and fiscal year calendars as necessary

• General Review
• Health Care
• Tuition Pricing
• Enrollment numbers
• Financial Aid
• Endowment
• Personnel Cost
• Other Insurance (e.g. P&C, Work Comp, Auto)
• Annual Fund
• Meal Plan Pricing
• Housing Pricing
• Administrative Efficiency Review
• Campaign Expenses
• Strategic Initiatives
  
  

Sub-Process :  General Review 

Personnel Involved
Vice President of Business & Finance 
Assistant Vice President of Business & Finance
All Budget Officers and Vice Presidents

Procedures

• Individual Budget line items should be monitored on a monthly basis by the budget department, as expenditures are made.  The Purchase Order and Requisition systems employed by the College within the Jenzabar software provide overall control of expenditures.  Certain dollar limits require executive approval of expenditures throughout the year.
• In preparation of financial information to the Finance Committee throughout the year, the Business Office compares YTD performance with historic YTD information and identifies variances (for further research) and timing differences.
• The Business Office will be responsible for overall review of spending patterns and will contact individual Budget Committee members for variance explanation when necessary.  The Business Office will also be responsible for analyzing the budget vs. actual data in different formats than just by individual department (e.g. total printing cost aggregated among all departments).
• Natural expense information is now available monthly as part of the close process and allows analysis of YTD results with historic information.

Sub-Process :  Health Care 

Personnel Involved
Vice President of Business & Finance 
Assistant Vice President of Business & Finance
Director of Human Resources

Procedures

• Monthly monitoring of claim payments.  On a monthly basis, claims payment history will be sent to the Business Office by Human Resources.  Any material changes in projected expense (based on year-to-date actual data) vs. budgeted expense will be reported to the Senior Leadership Team and included in budget updates to the Finance Committee and Board of Trustees.
• Periodic review of claim data, options for changes in plan, and new trends in health care with College's broker and any other professionals considered necessary to update projections in conjunction with meetings of the Finance Committee of the College.  See the Checklist of Finance Committee Meetings.

Sub-Process :  Tuition Pricing 

Personnel Involved
Vice President of Enrollment
Vice President of Business & Finance
Director of Financial Aid
Director of Admissions

Procedures

• Gather and provide tuition and fee schedules for both peer and competitor institutions.  Provide any additional comparative information and interpretation of the data necessary to expedite review by the Senior Leadership Team. 
• Recommend a tuition price increase based on consideration of overall net revenue when combined with the comprehensive discount rate and number of full-time students that will pay tuition to Hendrix (i.e. do not consider students in this number that are on non-exchange programs such as Hendrix-in-Oxford since these students do not pay tuition directly to Hendrix).  This recommendation should be made no later than October 31 ^st of each year.  If practice allows, multi-year pricing may be approved to be reviewed for changes prior to implementation with the new rules related to FASFA data requirements and effective dates.

Sub-Process :  Enrollment Numbers 

Personnel Involved
Vice President of Enrollment
Registrar
Associate Provost for Advising and Retention

Procedures

• Weekly report on Admissions data for class entering the next fall is presented to the Senior Leadership Team beginning by November.  Any trend variances should be explained and discussed.
• Semester review of retention data.  This data should be shared with the Senior Leadership Team, and any changes of plus or minus five students in the budget model as projected returning students should be reported.
• Quarterly review of the overall development of the enrollment model.  Any anticipated changes in projections for the next five years should be reported to the Senior Leadership Team.

Sub-Process :  Financial Aid 

Personnel Involved
Vice President of Enrollment
Director of Financial Aid
Vice President of Business & Finance

Procedures

• Monthly review of projected discount rate for both entering and returning classes and how it relates to overall net tuition increase objective established in the budget model.  Under this process, the VP of Enrollment and Director of Financial Aid will be constantly monitoring the projected aid for the next academic year and report any change of plus or minus $100,000 to the Senior Leadership Team.
• Quarterly review of future financial aid modeling by the VP of Business and Finance that feeds into the budget model.  Any update of these data will be reported to the Senior Leadership Team.

Sub-Process :  Endowment 

Personnel Involved
Vice President of Business & Finance 
Assistant Vice President of Business & Finance
Executive Vice President - Development
Other Development Personnel

Procedures

• Business Office - Monthly review by Business Office personnel when reports are received from custodian and consultant.  Endowment return reports will be reported to the Senior Leadership Team. 
• Business Office - Quarterly detailed review with consultant regarding past returns and forward-looking projections.  Any significant change in expected future returns will be reported to the Investment Committee.  Quarterly review will occur as soon as reports are available after the end of each calendar quarter (March, June, September, and December) generally occurring at the next Investment Committee meeting as determined by the committee Chair.
• Development Office - On a monthly basis, review endowment gift results for the year-to-date period.  Any planned change in expected endowment gifting will be reported to the Senior Leadership Team.

Sub-Process :  Other Insurance Projections (e.g. P&C, Work Comp) 

Personnel Involved
Vice President of Business & Finance 
Assistant Vice President of Business & Finance
Director of Human Resources

Procedures

• Semi-annual review with broker to determine anticipated trends in insurance market.
• Monthly monitoring of work comp claims by Director of Human Resources.  Any significant claims that are expected to affect the mod rate on the College's work comp premium will be reported to the Senior Leadership Team.
• Twice a year (when premium statements are received), the Business Office will adjust future projections based on past data and expected future increases and report to the Senior Leadership Team any adjustments.

Sub-Process :  Annual Fund 

Personnel Involved
Executive Vice President *
Development Officers

Procedures

• Monthly monitoring of budget vs. actual gifts to the annual fund.  This report should be shared with the Senior Leadership Team each month. 
• Annual review of five-year projections by the Development Office.  Any changes in the projections should be shared with the Senior Leadership Team and updated in the Five-Year Budget Model. 

Sub-Process :  Personnel Cost 

Personnel Involved
Vice President of Business & Finance 
Director of Human Resources
Provost and Associate Provost
All Vice Presidents

Procedures

• Quarterly review with the Provost of any anticipated changes in Faculty positions.  This should include anticipated new needs over the next two-year period.  These meetings should occur in October and April.
• Semi-annual review with the Vice Presidents and Provost regarding any anticipated changes in Staff positions.  This should include anticipated new needs over the next two-year period.  These meetings should occur in October and April.
• The Director of Human Resources and the Associate Provost will be responsible for compiling comparative data on Faculty salary information.  This data should be shared with the Senior Leadership Team, Faculty and Board when complete and should be shared at a minimum of once per year.
• The Office of Human Resources will prepare a monthly report of headcounts and salary levels.  This report will be shared with the Business Office and reported to the Finance Committee through its report of Key Budget Drivers.  The Business Office will use the information to update salary projections as needed in the current year.

Sub-Process :  Meal Plan Pricing 

Personnel Involved
Vice President of Business & Finance 
Director of Dining Services

Procedures

• In September, December, January, and May, a review of anticipated raw food costs will be discussed with the Director of Dining Services.  This sub-group will make a recommendation to the Business Office of mealplan charges for the next fiscal year by October 31.
• Quarterly meeting between the VP of Business & Finance and the Director of Dining Services to determine possible pricing strategies and multi-level meal plan arrangements that could enhance revenue.  Monthly report will be given to the Budget Committee.

Sub-Process :  Housing Pricing and Occupancy Rates

Personnel Involved
Vice President of Business & Finance 
Vice President of Student Affairs or Dean of Students
Vice President of Admissions

Procedures

• Semi-annual meeting will be held to discuss future pricing of residence facilities.  This sub-group will make a recommendation to the Senior Leadership Team of housing charges for the next fiscal year by October 31.
• Quarterly review of future housing needs based on growing or declining enrollment, construction, and/or acquisition.  A report is shared with the Senior Leadership Team in reviewing the long-term budget changes.

Sub-Process :  Administrative Efficiency Review 

Personnel Involved
Vice President of Business & Finance 
Assistant Vice President of Business & Finance (optional)
Director of Human Resources
Director of Facilities
Director of Dining Services

Procedures

• Weekly meeting with Facilities Management to review staffing, planned and unplanned capital repairs and budget impacts are to be held to maintain visibility of facilities spending in conjunction with utility and insurance costs.  Monthly meetings with the Director of Dining Services are held to review food costs and staffing level as student headcount numbers are available on a semester basis.  Impact of regulatory changes and changes to meet student needs to be reviewed along with depth and breadth of dining services provided.  Monthly information exchange of salary, headcount and insurance claim history from Human Resources provides a constant review of performance toward staffing and benefit targets.