A message from Dr. Cornelius Wooten, vice president for Administration and Finance:
The current economic climate, nationally and statewide, has required the IUP Administration to be increasingly diligent and creative in addressing funding challenges to ensure that the strategic goals and priorities of the university are met while maintaining the financial health and viability of the institution.
The initial temporary 4.25 percent budget rescission of state appropriations in Fiscal Year 2008–2009 for PASSHE institutions has now become a permanent reduction. This budget reduction equates to $2.8 million for IUP. IUP’s state appropriation allocation for FY 2009–2010 was reduced by $4.6 million, or 8 percent, from $58.3 million to $53.7 million. In addition to these decreases, the PASSHE Key 93 allocation has been eliminated entirely from the state budget for FY 2009–2010. This resulted in a decrease of $1.5 million for IUP’s deferred maintenance project funding.
The financial outlook for IUP will be very challenging in that PASSHE has suggested that the state institution plan for very austere budgets. Additional budget reductions are planned for FY 2010–2011 through FY 2011–2012. In addition, PASSHE has instructed the state institutions not to expect any increase in state appropriations for the next two years and to plan for only modest tuition increases.
In order to appropriately respond to recent reductions and future financial challenges, it was determined that IUP must revert to a more proactive management of personnel allocations in order to better manage the current budget situation.
Effective July 1, 2009, the IUP Administration reinstituted centralized personnel budgeting guidelines. This action was essentially designed to fund all general fund personnel costs (salary and benefits) centrally. The decision to reinstate centralized personnel budgeting guidelines was made after a great deal of deliberation. Ultimately, the final result was a decision by President’s Cabinet that reinstitution of the centralized personnel budgeting guidelines was in the best interest of the university.
The rationale for reinstituting a centralized personnel budgeting process includes the following objectives:
- To ensure the overall financial viability of the university
- To ensure the university has the financial wherewithal to fund university needs and priorities in a systematic and rational manner
- To strengthen the overall budgeting of the university
The financial impact of this change in the FY 2009–2010 budget model resulted in $3.5 million that was used to offset the budget imbalance and to allow IUP to fund mandatory and fixed cost increases without requesting additional permanent budget reductions from all divisions. This change will also provide future funding to offset anticipated cost increases and to maintain a balanced budget.
Currently, IUP’s personnel budget constitutes nearly 76 percent of its total operating budget. Consequently, efficient and strategic management of personnel resources in these difficult financial times is in order. The reinstituted centralized personnel method has built into it opportunities for input and information at various administrative levels. In the near future, operational elements of this initiative will be finalized. Prior to finalization, input from all sectors of the university will be invited to ensure the successful operation of this initiative.
