To the Campus Community:
As you know, CWU is transforming its understanding and use of financial systems in order to accommodate a new funding paradigm: nearly all of CWU's funding comes from students. In other words, CWU is basically a private university about four days a week.
This dramatic change has occurred over just four years. And we're moving quickly to adapt to our new reality, which affects the work and the lives of all CWU employees. I want you to know how the university is addressing this transformation and how you can participate.
It might be helpful to know that state funding, sadly, amounts only to about 13 percent of the total university budget. That's the only part of our budget that is "given" to us, "appropriated" from the state General Fund.
Everything else is an earned dollar. The old notion of "base" funding doesn't really exist anymore.
We must treat each dollar we earn--during the summer or during the school year--as a precious resource that can help support the operation the university, from teaching students to maintaining buildings and grounds.
To reinforce the awareness of how money flows, CWU already has decentralized management decisions. Deans, in collaboration with chairs, are managing college budgets and setting college priorities. This approach to management, this new way of working and thinking, is called "responsibility-centered management" (RCM).
CWU is approaching the total university budget in a way that ensures the coordinated and intentional use of all funds: fees, housing and dining, the Wildcat Shop, continuing education, as well as state and tuition funds. Summer school funds, too, are now one more piece of our funding puzzle. In order to better coordinate the use of limited university resources, by the end of this quarter, summer-school funds also will be managed by unit leaders to meet college costs.
In the past the money generated by summer programs was considered different because it was all tuition with little or no state support. Now, that's the rule. Financially, summer is simply the fourth quarter and those funds are accumulated and budgeted just as are all other tuition funds. Once, "non-state" was a special status; now it is the rule in terms of overall budget need and management.
Responsibility Center Management rewards academic departments for the work it takes to serve students. We measure it in credit hours. For example, faculty lines will increase as the student credit hours and number of majors grows. The deans will be able to distribute discretionary fourth-quarter funds for equipment, supplies and professional development to jumpstart or sustain their endeavors. They also will be able to use funds so that even small programs can sustain academic quality and student success.
As we have discussed, CWU anticipates a budget shortfall of about $6.5 million for fiscal year 2015 (July 1, 2014 - June 30, 2015). In the past, CWU might have addressed a shortfall by making across-the-board, enduring budget cuts, or by freezing or eliminating positions. Now we have the option of managing to this new number. We could just cut. But another option is to look for opportunities to meet student demand for programs or to change the way we offer existing programs.
For the upcoming year, we will use a portion of our one-time resources to maintain and expand our successes and financial sustainability just for the coming year. This will give us time to look for new revenue, new approaches, and, yes, cost savings. By definition, using one-time funds is a stop-gap strategy we won't be able to use again. Specifically, CWU will use the following strategies to close the budget gap.
1). Consolidate management of all reserve funds at unit level (i.e., deans, executive directors) in order to better coordinates their management. We will look across the university at all funds to meet the needs of the university.
2). Close the budget gap
• $4.6 million in one-time, "Rainy Day" funds. These are funds available at the end of the year because they were not spent from budgeted accounts across all university divisions.
• Use one-time tuition reserves to supply the balance, $1.87 million.
3.) Invest some reserves to support the academic mission and student success.
• Fund advisors in each college - $500,000 per year. CWU retire bonds associated with the remodel of Shaw-Smyser. Retiring the bonds frees up $500,000 per year that otherwise would have been used to make bond payments. These funds now are available to fund advisors. Retention is a key enrollment strategy.
• Create an academic equipment pool - $1.75 million. There are serious equipment needs across the four colleges for sciences, arts, and professional programs, as well as equipment for Science II, scheduled to open fall 2016.
CWU's financial viability, including enrollment / retention, is the responsibility of every CWU employee: book keepers, professors, custodians, graphic designers, adjunct faculty, and everyone else! Everyone will help close the budget gap. Everyone will help retain and recruit students. And every fund is a university fund that will help support the work of making students successful.
James L. Gaudino