Budget Planning Process
The operating budget planning process is a year-round endeavor that reflects the choices and priorities for allocating the College’s non-capital financial resources.
The process starts in September when the current year budget becomes the starting point for the five year projection. Assumptions driving the projection are updated, including enrollment data, the rate of increase for tuition, the College’s endowment return and distribution, faculty and staff salary increases, as well as the inflation factor used in determine revenue and expenditure increases. Once the baseline five-year projection is determined, additional assumptions and/or new initiatives are modelled. The five-year financial projection is presented to the Board of Managers’ Finance Committee the December meeting as well as the College Budget Committee (CBC) for their review. The projection is fine-tuned further, then reviewed again in February when the Board establishes the revenue budget for the upcoming year, which includes tuition, endowment spending, and other revenues. The operating expense budget is adopted in May after the departmental expense budgets have been finalized. The budget cycle ends with the completed operating budget uploaded to Banner on July 1.
What’s budgeted centrally: Tuition and Fees, Financial Aid, Endowment Distribution, Enrollment (projected), Gifts, federal and state support, debt service, new initiatives.
In November, The Vice President for Finance and Administration issues a budget call letter to all departments inviting academic departments and administrative offices to submit their budget requests for the upcoming fiscal year. Budget development is focused primarily on non-personnel expenditures. The current budget for both academic and administrative departments becomes the base budget for the following year. In December and January, units submit both their forecasts for how they will end the current year and their requests for additional budget for the upcoming year. During this period, the Vice Presidents will meet with their department heads to understand the justification for additional resources. If a department does not submit a budget request, then their current year budget will “roll forward” to become their next year’s budget.
Once the board establishes the revenue budget, the Budget Director and Assistant VP for Finance reviews budget requests and work with the President’s Staff and the departments to ensure expenditures matches the revenue budget. A finalized departmental expense budget is prepared by the Budget Director and is reviewed by the President and the VP for Finance and Administration before being presented to the Board of Managers at the May meeting for approval and adoption.
What’s budgeted at the departmental level? Revenue and expenses specific to the unit and/or program.
The Budget Office and Human Resources work in tandem to maintain the salary budget. During the budget development period, the various operating areas of the College work with their respective VPs to discuss additions or changes to their full-time equivalent positions (FTEs). All VPs must approve all new position requests and position modifications. Once the VP gives the approval, a department must contact Human Resources to receive access to the online position request form. The manager will provide justification for the new position or position adjustment. Human Resources (HR) will provide the compensation and benefits information.
The Budget Office and Human Resources receive all personnel budget requests for the upcoming year by early January and compile the information into a summary. Discussions take place during the course of the budget development cycle between the Budget Office, Human Resources, and Senior Staff, with decisions being made to approve positions based on need and funding availability. A final positions list is presented to the President and the VP for Finance and Administration for review before being presented to the Board of Managers at the May meeting for approval and adoption.
Capital Budgeting (Non-Operating)
The capital plan is Swarthmore’s annual document that encapsulates the College’s facilities capital needs. It is both an annual forecast and a five-year projection of projects, organized by category and arranged sequentially by importance and dependency. The Facilities and Capital Projects Division develops the capital plan with consultation from all members of President’s Staff. The Board of Managers approves the capital plan on an annual basis each spring as part of the overall budget approval process for the College.
What's included in the capital plan? Construction of new buildings, building and space renovation, major information technology projects (in consultation with ITS - Information Technology Services).