University of Saskatchewan

Financial Services Division (FSD)

Frequently Asked Questions – Detailed Operating Budget

This document is intended to provide additional guidance to individuals responsible for the development of the detailed operating budget for their respective college/unit. The questions below represent items where frequent clarification is requested by budget users. The responses represent budget practices currently in effect.

What does base-budget mean?

Base-budget means than an item is funded by the University’s Operating Budget. The University’s Operating Budget revenues are primarily made up of the annual operating grant from the Government of Saskatchewan, tuition and investment income. These revenues are allocated to various colleges/units to support the University’s general operations – i.e. teaching and instruction.

Other names for base-budget funding include: operating allocation, operating budget allocation, 59008 allocation and central funding.

The University has other revenues that fall outside the Operating Budget – for example, revenues from various funding agencies to perform research or undertake capital projects, gifts from donors, and government and other funding restricted for purposes other than general operations.

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How is the total base-budget funding for a college/unit determined?

Colleges/units’ operating allocations are based on a historically approved complement of positions (e.g. 8 Faculty, 3 ASPA and 2 CUPE positions), plus a fixed amount of funding for non-salary expenses.

This historical base-budget funding is rolled forward each year (and adjusted for projected salary increases) and is subject to change only if incremental funding is approved by the Provost’s Committee on Integrated Planning (PCIP) or if the college/unit  creates/deletes positions (see below for additional information on position creation/deletion).

Incremental funding approved by PCIP may be on a permanent, one-time or term basis so a decrease in base-budget allocation from the prior year may also occur when term or one-time funding ends.

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How are base-budget positions determined for a college/unit?

A very important distinction to make is that the salary component of a college/unit’s annual operating allocation is based upon an approved position complement and not necessarily upon actual positions in place. What this means is that every college/unit is entitled to a fixed historical number of positions (e.g. 8 faculty positions, 3 ASPA positions, and 2 CUPE positions) and the college/unit will receive operating allocation only for these positions, which are considered its base-budget positions.

If, for example, an additional CUPE position is created and hired into by the college/unit (total CUPE positions are now 3) the incremental position is considered to be non-base budget and the college/unit is responsible to fund this position from other funding sources (e.g. external revenues, opening fund balance) and will not automatically receive an annual operating allocation for this position.

Thus, when a college/unit is creating positions and hiring incumbents, they must be aware of the funding status of the position (i.e. base-budget or non-base budget).  They should identify a funding source for all non-base budget positions.

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What is the timing of the budget process at the University?

The University’s fiscal year (and budget year) runs from May 1 to April 30 of each year.  In order to have budgets in place within the UniFi financial system in May of each year, the cycle for the development of the detailed operating budget for a given fiscal year starts in December of the previous year.

Thus, the budget for the May 1, 2010 to April 30, 2011 fiscal year starts to be developed in December 2009.

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How is the amount of salary funding for a base-budget position determined?

Budgets for salary costs (which, in turn, determine the level of base-budget funding for positions) are developed in the December to March timeframe for the following May to April fiscal year. To do this, actual salaries for incumbents in all relevant positions are downloaded into the budget system from the payroll system (AboutUs).  Budget Management then works with Human Resources to apply projections for salary increases that will occur during the year. These projections are based upon actual collective agreements in force for each employee group.

When a current collective agreement is not in force for the entire budget year, Budget Management will estimate a budget for these increases and centrally create an aggregate accrual (i.e. they will not be projected at the individual employee level).  Once the distribution of these amounts is known (e.g. the settlement of a collective agreement), adjusting entries are made to distribute these centrally budgeted amounts, and related funding, to colleges/units.

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What amount of salary funding does a college/unit receive for a vacant base-budget position?

As a college/unit is entitled to receive funding for its approved position complement, operating allocation continues to be provided when a base-budget position is vacant. Vacant position funding is also called TBA funding.

The funding level for a vacant position is predicated upon the estimated cost that the college will incur to have these duties performed when such a vacancy occurs. For example, if a college has a vacant faculty position at the time that the detailed operating budget is established, the college will receive vacant position funding based upon the floor of the lecturer rate, as defined in the faculty collective agreement. This has been determined to be a reasonable replacement cost to have these duties performed until a permanent incumbent is hired.  The TBA funding will continue to be provided to the college/unit for as long as the position is vacant. The position valuation guideline (http://www.usask.ca/vpacademic/policies/index.php) (scroll to bottom of webpage for actual guideline) provides the vacant position funding rate for the various employee classifications.

It is important to note that, if a vacant position is filled during the fiscal year, the vacant position funding will not be adjusted to actual for that fiscal year. Instead, it is assumed that, in the aggregate, a college/unit’s turnover from filled to vacant positions offsets its turnover from vacant to filled positions during the year.  However, the vacant position funding will reflect the next incumbent’s actual salary when the budgeting cycle starts again for the following year.

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If a college/unit’s complement of approved base-budget positions is fixed, how can additional base-budget positions be created?

Colleges/units can create incremental base-budget positions by “purchasing” positions as defined in the position valuation guideline (http://www.usask.ca/vpacademic/policies/index.php) (scroll to bottom of webpage for actual guideline).

The position valuation guideline includes specified position creation rates for the fiscal year for each of the various employee groups (e.g. faculty, CUPE, ASPA, etc). The creation rates are based upon the average cost for the position over its life cycle at the University (for example, the faculty creation rate of $128,813 per the 2010/11 position valuation guideline, is based upon the average faculty salary in the most recently completed budget year) plus benefits and accountable professional expense.

Using the creation rate as an evaluation criterion, the college/unit can then elect to convert fixed base-budget non-salary funding to (salary escalated) base-budget position funding. For example, let’s assume a college’s operating allocation based on simply rolling forward the prior year approved complement and fixed non-salary funding is as follows:

 

Funding Element Salary Benefits Non-Salary Grand Total
Approved Positions:
2 Faculty (actual cost) $160,000 $22,400 $0
1 CUPE (phase 2) $45,000 $6,300 $0
Fixed non-salary $0 $0 $200,000
Total base-budget funding $205,000 $28,700 $200,000 $433,700

 

If the college elects to create an incremental faculty position at a cost of $128,813 to be applied against their non-salary funding the modified budget would appear as follows:

 

Funding Element Salary Benefits Non-Salary Grand Total
Approved positions:
3 Faculty (actual cost) $240,000 $33,600 $0
1 CUPE (phase 2) $45,000 $6,300 $0
Fixed non-salary $0 $0 $71,187
Total base-budget funding $285,000 $39,900 $71,187 $396,097

After an incremental base-budget position is created, the University centrally becomes responsible for all subsequent salary and benefit increases for this position. Although the level of funding is lower in initial year of creation, the base-budget allocation will increase each year with salary increases.

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