Budget process raises additional questions

Phat Nguyen, News Editor

Faculty and staff still have questions following several budget meetings with Vice President of Finance Loren Chip Prescott. Concerns include cuts to retirement, health care and academic department budgets. Along side these concerns, faculty said they have a sense that their input is not being considered.

They said one of the biggest problems facing Wilkes is the failure to adhere to the decision-making process.

“That was not done,” assistant professor English Marcia Farrell said. “We were not given an opportunity to recommend, or even given a chance to review decisions that were being made.”

Prescott held two budget forum meetings last week to present the proposed budget to faculty members. The budget is projected to include a 4 percent tuition increase, along with various cuts.

He said these budgetary decisions incorporated feedback from the campus community.

“There probably will be an ongoing discussion on whether the judgments we made were the best ones, and sometimes you can revisit those, but I think we got through with a lot of discussion, a lot of involvement by the budget committee, and by the president’s cabinet, and some interaction with others on campus,” Prescott said.

However, faculty members are upset with the decision-making and lack of input outside of the president’s cabinet.

Don Mencer, chair of the Faculty Affairs Committee, said he was hard-pressed to call this a standard operating procedure.

“It sounds like to me that they’re reacting to circumstances,” Mencer said.

Budgetary priorities have not been given to faculty, he added.

“We were not asked whether to fully fund depreciation or build revenue contingencies,” Mencer said.

Associate professor of pharmacy practice Jonathan Ference added his concerns about the communication process.

“There is a lingering concern that the process of communication was broken between faculty and administration. We don’t know what process by which decisions are made,” Ference said. “If we’re not familiar with this process, how are we able to make sure we are represented by part of that process?”

Ference said discussions about the 2013 fiscal year budget should not be happening in third week of April.

“We should be discussing the 2014 budget,” Ference said.

Prescott said in past years the budget has been reviewed and approved in April.

One of the biggest challenges that delayed the budget was state funding cuts to programs such as graduate teacher education. According to the Wilkes Fact Book, teacher education graduation enrollment has decreased from 3,720 in 2009 to 3,463 in 2010 and 2,673 in 2011. These losses have negatively affected the budget, Prescott explained.

Although losses and expenses are stemming from the graduate programs, the university still plans to expand some existing graduate programs and brand new graduate programs in nursing, engineering and education.

Despite budget cuts, Prescott said the university strives to continue to make progress reducing increases in tuition. According to the Wilkes Fact Book, the 2011 tuition increased 3.8 percent. The university is now planning a 4 percent increase, but hopes to eventually lower that increase in the future.

“One of the assumptions in that budget model was a tuition increase for the entire period to accurately project revenue,” Prescott said.

Prescott said he was disappointed the school couldn’t reduce the annual tuition increase as quickly as that model portrays. The model anticipates a 2 percent tuition increase in a couple years.

The budget is comprised of a combination of different groups including the president’s cabinet and a budget committee — composed of president’s cabinet, full-time faculty, student representatives and staff.

An ongoing process of meetings will examine expected revenue from a variety of sources, operating expenses and other expenditures — such as maintenance and new projects like the science building, Prescott said.

The finance administrator pointed out that 150 people on campus manage budgets, including academic areas such as deans for each of the colleges, who work closely with department chairs. Conclusions are then drawn to balance anticipated revenue sources and estimated operating expenses.

These savings are going to be different for each of the budget units depending on their mission and how they use resources.

“Budget managers know their operation best, they know their budgets best, and so they should be ones who in most cases are making judgments about where there are opportunities to save,” Prescott said.

Prescott plans to try to turn this year’s cuts into ongoing savings. He said there is a significant list of operating expenses that affect all the operating units such as food for on-campus events, office supplies and many categories of expenses that were reviewed by the finance office and budget committee with idea that they could operate more efficiently.

“As part of the budget process this year, we prepared, for the first time in a number of years, a long-range planning budget that projects, for budgetary purposes, the university’s operations out to 2020,” Prescott said.

Another issue that affects the budget is the $35 million science building. A $20 million capital campaign is intended to be ultimate source of funds, but construction will put the university $15 million in long-term debt, but he said donations and fundraising could lower that debt.

“The difficult thing with the last two years is that we didn’t do as good as job as we need to do in accurately projecting revenue, but the problem is when you create a budget you’re guessing on sources of revenue,” Prescott said.

He said the basis is an educated guess from past experience with programs,  but it really a guess with new programs.

“The budget for next year, I think, is more conservative on revenue estimates than it has been in the last couple years, and that’s intended to address that problem,” Prescott said. “The danger is being overly optimistic about revenue, and then later on having to come back to the budget and saying ‘well it turns out we didn’t have the revenue that we really thought,’” he said.

The handbook states that the Faculty Affairs Counsel should be consulted by administration before decisions are made. Faculty emphasized there should be an understanding in advance, which could have  avoided what they are calling  a very public and pesky quarrel.

Despite these issues, faculty said there are good things happening.

“There are people who are trying to do what they think is right for the institution,” Mencer said.

Mencer believes the breakdown in communication has led to many of the faculty concerns.

“We all understand that we have to live within budgets,” Mencer said. “There is no imaginary world that faculty live where they have unlimited salaries and budgets. However, there’s no doubt there’s deviation from this policy.”

Mencer said these meetings and time consumption also come with an opportunity cost.

“Faculty, staff and administration are all attending numerous meetings over budgetary decisions affecting morale and grading,” Mencer said.

In addition, he said faculty still works hard to uphold the values of the Wilkes community. Ference, a Wilkes alumni, has come back to Wilkes as a professor because he wanted to contribute to that community.

“I love being a Colonel, but part of this process is breaking my heart,” Ference said.

The next step in the budget process will take place Tuesday, April 24 when the FAC will have a joint meeting with deans and president’s cabinet regarding the 2012 fiscal year among other concerns.

Contributer: Kirstin Cook