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Business Officer Magazine
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Vantage Point

Spotlight on an institution in one of the constituent groups: small institutions, community colleges, comprehensive/doctoral institutions, or research universities

By Choi Halladay

COMMUNITY COLLEGES
An Open Approach to Budgeting

Many higher education institutions set their budgets in a hierarchical manner: Faculty provide input to their deans, whose requests eventually make their way up through the organization to the level of president or chancellor. In time, after numerous closed-door sessions, an approved budget appears—almost as if by magic. If economic times are good, the original budget request might remain intact. In tougher times, the final budget might include severe cutbacks, layoffs, or even program closures that catch people by surprise.

That's definitely not how the budget process plays out at the Pierce College District in Pierce County, Wash. Since 2007—about the time state funding began a rapid descent—Pierce has taken a transparent approach to budget setting that invites participation and monitoring at every step.

In addition to the administrative services department, which manages all logistics related to the budget process, the key players include five planning groups and a 20-person budget team. Each planning group represents a particular area, such as instruction, student services, or institutional services. On the other hand, the budget team has campuswide representation; it includes someone from every academic area, from each of our unions, and from finance and operations. The budget team also has representation from each of our two colleges and our large military education site located at nearby Joint Base Lewis-McChord.

The road to our general fund budget, which totals around $50 million, begins in January. That's when the board of trustees and the executive team—the direct reports to Pierce's chancellor—discuss and decide on the budget priorities for the coming year. For the fiscal year that begins this July 1, for example, the board and senior executives asked each planning group for a budget that included enhancements related directly to a core priority, such as educational pathways, and also for proposed ways to cut its expenditures by 2 percent.

All Are Welcome

Guided by the year's priorities and instructions, and drawing on data provided by our institutional research office, the planning groups develop their proposals in February and March. Then, in April and May, the budget presentations and deliberations take place.

Our budget presentations are similar to a legislature's hearings. Done via interactive television, they are broadcast to all of our campuses and open to anyone who wishes to attend in person, either to provide input or simply listen. Each planning group has an assigned time (or two) to review its requests for budget additions as well as explain potential deletions to meet the reduction target. That's not to say the proposed deletions aren't important programs or projects in their own right—they simply fall under a lower priority in view of where the institution is heading in the next few years.

At this stage, the planning groups do not prioritize their options for budget deletions. Later, during the deliberation process, the budget team may ask, for example, which of the two options a group would prefer to keep in its budget. But there's no guarantee: The groups know fully well that identifying an option makes it susceptible to being cut. On the other hand, the budget team cannot override a group's suggestions and earmark something else for reduction.

Throughout the entire process, Pierce publishes on its district intranet the budget documents presented and the tool used by the budget team to track progress and decisions. This allows internal stakeholders to see all proposals and their current status.

The transparent budgeting process favored by the Pierce College District includes televising budget hearings at its two colleges and one military education site.

Funding Priorities

After the public hearings conclude, the budget team begins its deliberations. It's intense work. We talk about priority areas, how much a particular enhancement (or reduction) could affect various statistical measures, and compare the potential long-term results of different options. Acknowledging that Pierce simply doesn't have the resources for everything it would like to do, we discuss and decide upon the combinations that ultimately will make our institution stronger.

Done via interactive television, budget presentations are broadcast to all of our campuses and open to anyone who wishes to attend in person, either to provide input or simply listen.

For example, in 2014, the planning groups were instructed to budget for a 3 percent reduction in funding. That freed up funds to address some legal and process compliance issues that had been minimally funded in previous years; one strategic priority for the budget team was bringing Pierce back to top performance in those areas. It also enabled the district to implement more strategies related to closing achievement gaps measured through our involvement in the Achieving the Dream initiative.

The budget team typically finishes its deliberations in early June, so the budget can be finalized for board review and approval before July 1.

Accompanying the budget recommendation to the board is a resolution from another group of campus constituents—our cabinet, comprising student, staff, and faculty representatives. This group is essentially a governance watchdog. Its members are not decision makers, but observers of the budget process to ensure that it is open and fair. They verify that everyone who wanted to provide input or express an opinion had the opportunity to do so and that the process adhered to the budget principles and values adopted by the board.

Returns on Time Invested

Without question, our transparent budget process requires a large investment of time. The budget hearings alone take two or three hours for each of the five planning groups. Then the budget team spends another 50 to 60 hours on its deliberations, repeatedly asking questions and weighing how the answers would affect the institution. Most people at Pierce believe all this effort is worthwhile: In the past three years, other than a retirement, only one member of the budget team has changed. 

Of course, not everybody likes the process, especially when they are connected to a proposed program or project that is eventually accepted for reduction. Still, because our budgeting is done openly, those disappointed people are well aware of what their program was up against and what Pierce is aiming to achieve by allocating those budget dollars elsewhere.

Two years ago, for example, the budget focused on Pierce's strategic initiative to close achievement gaps. By ending some course offerings and cutting lower priority administrative support, we were able to shift resources to fund a mandatory course, for all first-year students, on college success skills. We can now prove, statistically, that first-year students are doing better—Pierce has fewer students dropping out between the fall and winter quarters and has improved fall-to-fall retention.

Chief business officers looking at our long, time-intensive process from the outside probably would say, "There's no way this can possibly work." And yet it does. The high level of transparency surrounding budget development makes it easier to communicate about the final budget. People are not surprised by layoffs or reassignments or program closings, because they already know why those choices were made. Having witnessed the back-and-forth debates about the pros and cons of various budget options, they understand why Pierce can or can't afford to do something.

Every Pierce budget reflects a consensus reached through many difficult decisions. Because they have seen and heard the budget being developed in real time, our constituents can't say the final product resulted from some backroom deal or magically appeared out of nowhere.

SUBMITTED BY Choi Halladay, vice president of administrative services, Pierce College District, Pierce County, Wash.


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