Virginia Highlands Community College   Faculty & Staff Manual
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Section 4 Title

Section 1 - Introduction

Section 2 - Organization & Responsibility

Section 3 - Personnel

Section 4 - Administrative Rules and Regulations

Section 5 - Educational Programs

Section 6 - Student Development Services

Section 7 - Miscellaneous Information



4.5 Budget Development and Management

4.5  Contents

4.5.1 Budget Policy

The purpose of this policy is to describe the general guidelines for developing budgets of the College and for the internal reporting, review, management, and redistribution of budgets. All budgets are developed in accordance with guidelines approved by the State Board for Community Colleges. Policies and procedures related to Administration and Finance are found in section 4 of the VCCS Policy Manual. Section 4 is available at http://www.vccs.edu/Portals/0/ContentAreas/PolicyManual/SEC4.pdf. Section 2B of the VCCS Policy Manual also contains policies related to the fiscal operation of the College. It is available at http://myfuture.vccs.edu/Portals/0/ContentAreas/PolicyManual/SEC2-B.pdf

Budgets are the financial representation of the College’s plans. The college budgeting procedures take into consideration results of the institutional planning process and the official strategic plan as well as historical expenditures and divisional and departmental requests.

Budgets are also controls. It is a violation of state policy for an agency to exceed its appropriation. For more information see Section 20100 of the Commonwealth Accounting Policies and Procedures Manual. It is available at http://www.doa.virginia.gov/Admin_Services/CAPP/CAPP_Topics/20105.pdf. Accordingly, budget managers are not to exceed spending in excess of authorized limits. Budgets may also be used as performance measures helping to determine whether programs and management are delivering expected financial performances.

Budgets adopted by the College are recorded in the accounting system (Financial Records System) in a timely and effective manner. As such, the budget must be prepared and reported on a basis consistent with the chart of accounts approved by the Virginia Community College System (VCCS) and consistent with generally accepted accounting principles. The actual revenues and expenses in execution of the budget are subject to audit by the VCCS Internal auditor and by the Commonwealth of Virginia Auditor of Public Accounts.

Based upon its membership in the VCCS and the various sources of funds, the College prepares and operates with the following budgets:
  • State Funds:
    • Educational & General (E & G)
    • Information Technology Plan (includes Equipment Trust Fund, Technology Fee, and limited E & G)
    • Capital Outlay
       
  • Local Funds:
    • Localities Appropriation Fund
    • Vending Commissions Fund
    • Student Activity Fee Fund
    • Bookstore Commissions Fund
    • Plant (Capital) Funds
    • Grant Funds

4.5.2 State Funds Budgets

4.5.2.1 State Funds Educational & General (E & G) Budget

State Funds Budgeting Process: The Commonwealth of Virginia has a biennial budget system which means it adopts a two-year budget. The biennial budget is enacted into law on July 1 in even-numbered years and can be amended in odd-numbered years. Developing the Commonwealth’s budget is a process which takes many months and involves many participants. It is described on the Virginia Department of Planning & Budget website available at http://www.dpb.virginia.gov/budget/faq.cfm. In summary, the process includes five distinct phases:

  1. Agency budget preparation phase. State agencies analyze their programs and needs. Based on this analysis, agencies prepare and submit requests for funding to the Department of Planning and Budget (DPB). Agencies generally present their proposals to DPB in the early fall.
     
  2. Budget development phase. DPB analyzes the budget requests of agencies to verify costs, confirm the need for services, investigate any alternatives for funding, and identify policy issues for the Governor’s consideration. This analysis takes place during the fall. In the late fall, the Governor and his Cabinet Secretaries work together to prepare a proposed budget which reflects the Administration’s priorities. The Governor submits his budget proposals to the General Assembly on or before December 20 in the form of a bill. He also distributes a budget document which sets forth an explanation of his proposals.
     
  3. Legislative action phase. The General Assembly convenes each year on the first Wednesday of January. In each house, the Governor’s budget bill is referred to committees which hold public hearings and committee discussions. The committees may introduce amendments to the budget bill. After committee review, the amended budget bill is brought to the floor of each house, where other amendments may be made. Each house votes on the amended budget bill. After each house votes on its own version of the budget bill, the bill “crosses over” to the other house where it is again debated and voted on. Before the General Assembly adjourns for the session, a conference committee resolves any differences between the versions passed by the two houses. The General Assembly then sends the budget bill to the Governor for his signature.
     
  4. Governor’s review phase. The Governor reviews the bill passed by the General Assembly. He may sign it, veto the entire bill or certain line items, or recommend amendments. If the Governor vetoes the bill or any items of the bill, it goes back to the General Assembly during a reconvened session in the spring. If he recommends amendments, the bill is returned to the reconvened session for consideration and action by the General Assembly on the Governor’s proposed amendments.
     
  5. Budget execution phase. The budget passed by the General Assembly and enacted into law goes into effect on July 1 in even-numbered years and on the date of passage in odd-numbered years.

    The VCCS represents all member institutions in the statewide budgeting process described above by working with the Governor’s office, the General Assembly, and the Department of Planning and Budget. While the College, through the President and designees of the President, may interact with the various entities, official requests are forwarded from the VCCS.

    Funds appropriated from the General Assembly are called general funds and typically are intended for the base operation of the College. The primary uses of general fund appropriations are salary and benefits for faculty and staff, and fixed costs such as utilities and insurance.

    Appropriations are recognized in the Code of Virginia. The State Board for Community Colleges (State Board) is responsible for the control and expenditure of funds appropriated. General funds approved for community colleges are typically appropriated to the VCCS, not to individual colleges. The VCCS then distributes funds to each member institution and the central administration units through a budget allocation model. (Funds designated for a particular college by the General Assembly are held in whole for that college but distributed with the budget allocation model.) The Fiscal Services unit of the VCCS manages the budget allocation model. While the model is complex, the primary focus for distributing resources is recent enrollment figures. Other important factors include the number of campuses, the types of approved instructional programs, employment levels, and average salaries. The model was developed and recommended by the Advisory Council of Presidents (ACOP) to the Chancellor. The Chancellor and the State Board for Community Colleges subsequently approved the model.

    The General Assembly also appropriates non-general funds entitling the College to collect and expend tuition, fees, indirect costs, grant and contract funds, and miscellaneous funds. Non-general appropriations are distributed through the Budget Allocation Model but are based on actual revenue collections.

    After the model calculations are performed by the VCCS, each college receives a “Resource Distribution” packet which details the funds appropriated for the fiscal year. The resource distribution packet typically does not arrive until early or mid May, although the date varies and is subject to the legislative process. It is the goal of the College to have a proposed spending plan approved by the end of June. Again, these dates vary and are subject to VCCS and legislative processes.

    The College’s E & G budget is developed in two parts (a) personnel services and (b) other than personnel services-OTPS. The personnel budget covers salaries for all full and part-time personnel as well as fringe benefits. Personnel costs historically account for over 85% of the total E & G budget. The OTPS budget is for all non-personnel operating expenditures of the institution and has been very limited in recent years.

    The President’s Advisory Cabinet (PAC) is involved in all major steps in the budget development process. Each PAC member solicits input from his or her division or department so that ultimately every employee has a voice in the budget development process.


    The following calendar is a general guideline for the development of the College’s State Funds E & G Budget:

DATE

ACTION

RESPONSIBILITY

January PAC       meetings

Begin Planning for Upcoming Year.  Begin budget development and planning for the next fiscal year.  Conduct preliminary discussion of vacant faculty and administrative positions and requests for new positions.  The “VHCC Request For Hire” form is utilized to ask PAC to fill vacant positions or establish new positions.  (Vice President of Instruction & Student Services maintains a prioritized list of vacant faculty positions as well as new requests.  This list is based on availability of adjuncts, courses taught, full-time faculty in discipline, and division dean’s ranking.) 

PAC

 

 

 

 

 

 

 

 

 

February PAC meetings

Make Faculty & Administrative Decisions for Upcoming Year.  Depending on preliminary information for the upcoming budget, decide whether to proceed with recruitment process for selected faculty and administrative positions.  (It is desired that faculty and administrative positions be advertised prior to the end of the academic year.)

PAC (with supporting data from Vice President of Financial and Administrative Services

February PAC meetings

Request Prioritized Lists for Upcoming Year.  Solicit from PAC prioritized lists of operating budget requests, equipment requests, and new classified/wage position requests for upcoming year. 

 

Solicit input from divisions and departments. Members are responsible for reviewing items received from their areas for feasibility and to ensure conformance with approved operating plans as well as the College’s strategic plan. 

 

Develop consolidated list of requests for upcoming year is from data submitted by PAC members.

President

 

 

 

PAC

 

 

 

Vice President of Financial and Administrative Services

April PAC meeting (1st)

Make Classified Staff/OTPS Decisions for Upcoming Year.  Discuss vacant classified and wage positions and new requests. Decide which positions to fill and/or budget for in upcoming year.

 

Make limited decisions for OTPS funding for college-wide required items such as accreditation.

PAC

 

 

 
PAC

April, mid

Prepare Estimated Resource Needs/Consolidated Spending Plan for Upcoming Year.  Determine resources needed for personnel costs for (1) currently filled permanent positions  (2) faculty and administrative positions as approved by PAC in February  (3) classified and wage positions as approved by PAC in April.  (Depending on the legislative and VCCS processes, salary increase amounts may not be definite.  In addition, fringe benefit rates may not have been published.)

 

Determine resources needed for other than personnel costs.  Include departmental budgets at current year level of funding.  Project college-wide expenses such as utilities and insurance based on historical trends.  Include costs for college-wide required items as approved by PAC in April.  Include one percent of the estimated total validated resource distribution as contingency reserve. 

 

 

Assemble personnel and OTPS resource needs into a consolidated spending plan.

 

 

Maintain list of funding requests from PAC that are not included in consolidated spending plan.   

Vice President of Financial and Administrative Services

 

 

 

 

  

Vice President of Financial and Administrative Services

 

 

 

 

 

 Vice President of Financial and Administrative Services

 

Vice President of Financial and Administrative Services

May PAC meeting (1st)

Review Estimated Resource Needs/Consolidated Spending Plan.  Review resource needs as projected by VP of Administration for personnel and OTPS.

 

Provide enrollment projection for upcoming year.

PAC

 

 

 Vice President of Instruction and Student Services & Director of Admissions

May PAC meeting (2nd)

Provide Update - Status of Upcoming Year Budget.  Advise PAC of budget status based on information received from legislature and VCCS.

President & Vice President of Financial and Administrative Services

Prior to June PAC meeting (1st)

Develop Draft Budget Document.  Update consolidated spending plan as salary increase and fringe benefit amounts are finalized.  When validated resource distribution is received from VCCS, compare total resource needs for personnel services and OTPS to funds available.  Adjust revenue projections according to enrollment estimate provided by Vice President of Instruction & Student Services and Director of Admissions.  Prepare draft budget document.  In summary, this draft includes:

 

(1) currently filled permanent salaries, wages, and fringe benefits

 

(2) additional faculty and administrative positions as approved by PAC in February.

 

(3) additional classified and hourly positions as approved by PAC in April

 

(4) departmental budgets funded at prior year level

 

(5) college-wide expenses such as utilities and insurance as projected based on historical trends

 

(6) costs for college-wide required items as approved by PAC in April

Vice President of Financial and Administrative Services

June PAC meeting (1st)

Present Draft Budget Document to PAC.  Present draft budget.

 

 
If total projected expenditures included in the draft budget exceed expected resources, work with divisions or departments to establish priorities within the College’s strategic plan.

 

Maintain list of requests that were not included in the draft budget for consideration as additional resources become available.

 

If total projected expenditures included in the draft budget are less than expected resources, work with divisions or departments to establish priorities from the pending list.

Vice President of Financial and Administrative Services

 

PAC

 

 

 
Vice President of Financial and Administrative Services

 

 

PAC

June PAC meeting (2nd)

Recommend Final Budget. If total projected expenditures included in the draft budget exceeded expected resources, determine what reductions to make to bring expenditures in line with revenues.

 

If total projected expenditures included in the draft budget are less than expected resources, determine which items from the pending list to fund.

 

Recommend and submit final budget to President.

PAC

 

 

 

 PAC

 

 

 PAC

 

By June 30

Approve Final Budget.  Approve Final Budget.

President

July 1

Notify Divisions and Departments.  Upon approval of final budget, notify divisions and departments of budgets for new fiscal year by providing comprehensive budget document to PAC.

 

Communicate budget data to divisions and departments.

 

Place copy of Final Budget on reserve in Library.

Vice President of Financial and Administrative Services

 

 

 PAC

 

 Vice President of Financial and Administrative Services

September meeting

Review Final Budget.  Review final budget as approved by PAC and President.  As required by VCCS Policy Manual section 2A.IX, the Local Board is kept informed of the fiscal status of the College by the President and receives summaries of the biennial financial plan and the annual spending plans.

Local Board

 

LOCAL FUNDS

 

November

Begin Planning for Upcoming Year.  Request input and suggestions for Localities Appropriation Fund Requests.

Vice President of Financial and Administrative Services

December

Review Budget Proposal.  Review and recommend proposed Localities Appropriation Fund Requests to be submitted to Local Board.

President’s Administrative Staff

January Meeting

Review and Approve Budget Proposal.  Review and approve proposed Localities Appropriation Fund Requests as recommended by PAC.

Local Board

January/February

Submit Budget Requests to Localities.  Submit proposed Localities Appropriation Fund Requests to localities.

President and Vice President of Financial and Administrative Services

July

Analyze revenue projections for Student Activity Fee and Vending Commissions.  Analyze the estimated revenue collections for Student Activity Fee and Vending Commissions and formulate draft of budgets.

Vice President of Financial and Administrative Services

August meeting (2nd)

Review and Approve Budget Proposal.  Review and recommend proposed Student Activity Fee Fund and Vending Commission Fund Budgets.

PAC

September meeting

Review and Approve Budget Proposal.  Review and approve proposed Student Activity Fee Fund and Vending Commission Fund Budgets as recommended by PAC.

Local Board

The following calendar is a general guideline for the management of the College’s State Funds E & G Budget:

 

DATE

ACTION

RESPONSIBILITY

August PAC meetings

Review Carry Forward Funds.  Inform PAC of amount of carry forward from prior fiscal year.

 

Discuss and/or decide to approve requests and projects from the EOY list or requests that were not funded in current year.   

Vice President of Financial and Administrative Services

 
PAC

As Needed

Review Vacant Positions.  Review proposals to fill positions that are vacated by retirement or resignation.

PAC

September PAC meeting (1st)

Current Year Status.  Provide up-to- date comprehensive budget document. 

 

Review and revise budget as needed.

Vice President of Financial and Administrative Services

 PAC

November PAC meeting (1st)

Current Year Status.  Provide up-to- date comprehensive budget document.

 

Review and revise budget as needed.

Vice President of Financial and Administrative Services

 PAC

January PAC meeting (1st)

Current Year Status.  Provide up-to- date comprehensive budget document.

 

Review and revise budget as needed.

Vice President of Financial and Administrative Services

 PAC

March PAC meeting (1st)

Develop Prioritized Lists for Current Year.  Ask PAC to compose prioritized lists of one-time greatest needs for consideration for possible end-of-year spending of contingency and uncommitted funds.

 

Solicit input from divisions and departments. Members are responsible for reviewing items received from their areas for feasibility and to ensure conformance with approved operating plans as well as the College’s strategic plan.

 

Prepare consolidated list of requests for end-of-year spending from data submitted by PAC.  Develop estimate of current year funds that might be available for use on one-time projects or acquisitions.

President

 

 

 

 PAC

 

 

 

 
Vice President of Financial and Administrative Services

March PAC meeting (1st)

Current Year Status.  Provide up-to- date comprehensive budget document.

 

  Review and revise budget as needed.

Vice President of Financial and Administrative Services

 PAC

April PAC meeting (1st)

Review EOY Spending Requests and Make Recommendations.  Review consolidated list of requests.  Decide amount of EOY funds to spend as well as which projects or acquisitions to fund.  (Legislative process for upcoming year may impact EOY spending decisions.)

PAC

May PAC meeting (1st)

Current Year Status.  Provide up-to- date comprehensive budget document.

 

 

 Review and revise budget as needed.

Vice President of Financial and Administrative Services

 

PAC

May, first week

 

Notify PAC of Current Year Spending Freeze & EOY Close Out.  Communicate to PAC the upcoming freeze on current year state funds expenditures to be effective in last week of May.  This is necessary in order to ascertain current year balances and secure any potential carry forward. 

Vice President of Financial and Administrative Services

May, last week

Implement Current Year Spending Freeze & EOY Close Out.  Freeze expenditures of current year state funds except for emergency items and Master Card purchases. 

Vice President of Financial and Administrative Services

June 10

Implement Spending Freeze On Small Purchase Credit Card (SPCC) Purchases.  Freeze expenditures from departmental SPCCs.

Vice President of Financial and Administrative Services

June 10

Transfer Fund Balances to Contingency.  Pool all departmental fund balances and transfer to contingency fund for carry forward and redistribution by PAC in upcoming year.

Vice President of Financial and Administrative Services

4.5.2.2 State Information Technology Plan Budget

One component of the State budget is the information technology plan which is funded with special legislative appropriations, the State Council of Higher Education’s Equipment Trust Fund program, and student technology fees. Per Section 4.3.0(a) of the VCCS Policy Manual a technology fee of $5.50 per credit hour is charged for all credit courses including those delivered by distance learning. Section 4.3.0(a) is available at http://www.vccs.edu/Portals/0/ContentAreas/PolicyManual/SEC4.pdf#page=8.

Each year the College must submit a Technology Plan to the VCCS for approval. The Technology Plan must be approved by the VCCS Chancellor prior to funds being released to the College. The plan is developed by the Director of Library and Instructional Services with guidance and input from the Coordinator of Academic Computing and Technology and the Library and Information Technology (LIT) standing committee. Various initiatives, mandates, standards, and guidelines from the state and the VCCS form the framework around which the technology plan is written and implemented. In addition, input from each department of the college is gathered and used in making decisions and setting priorities within the Technology Plan each year.

VCCS purchases of computing, printing and networking systems, software licensing and services are incorporated into the College’s plan. The plan also covers fixed networking costs such as monthly line charges, warranties and maintenance agreements and infrastructure for the network.

The Technology Plan as developed by the Director of Library and Information Technology and the LIT standing committee is presented to PAC for review and approval.

4.5.2.3 State Capital Outlay Budgets

Capital Outlay projects must be approved by various state agencies and bodies. As such, the VCCS collects and submits projects on behalf of all member institutions. There are two broad categories of Capital Outlay, capital projects and maintenance reserve projects. Capital projects include the acquisition or proposed acquisition of property, including any improvements thereto, a new construction project or improvements to state-owned property, a renovation, maintenance or repair project, an equipment acquisition or improvements to state-leased property that are financed by public funds. Maintenance reserve projects are a single undertaking that involves major repair or replacement to plant, property or equipment, normally costing from $25,000 to $500,000. Further information regarding the policy for capital projects may be found in VCCS Policy Manual, Section 10.0 http://myfuture.vccs.edu/Portals/0/ContentAreas/PolicyManual/sec10.pdfas well as in the VHCC Faculty and Staff Manual, Section 7.5.2.

4.5.3 Local Funds Budgets

The College has and exercises the authority to establish and operate certain Local Funds Budgets. Management of local funds is the responsibility of the Local Board and the college administration. Local funds budget expenditures are reviewed by the Local Board annually in the form of cash basis financial statements presented by the Vice President of Financial and Administrative Services. Information regarding the establishment and procedures for local funds may be found in the VCCS Policy Manual, Section 4.2.2 available at http://www.vccs.edu/Portals/0/ContentAreas/PolicyManual/SEC4.pdf#page=5.

4.5.3.1 Localities Appropriation Fund Budget

Each year, the College prepares and submits, with the approval of the Local Board, Localities Appropriation Fund Requests to the governing bodies of the political jurisdictions within the College's service region. Funds from this budget are used for student financial aid, community service and community information programs, site development, economic development and other expenditures not a part of the State operating budget. The Localities Appropriation Fund Requests are developed in accordance with guidelines of the VCCS. The formula used to determine the amount requested from each locality uses Enrollment, Population, and Property Value percentages by locality giving twice the weight to enrollment as to population and property value.

In addition, requests for capital outlay funds are submitted to the governing bodies on an as-needed basis.

In November the President receives input and suggestions to be included in the next year’s budget. President meets with Vice Presidents and Accountant to review details and recommendations. A rough draft is formed and presented to the President’s Administrative Staff in December for their review and approval. Proposed budget is presented to the Local Board at the January meeting for review and approval. Following approval by the Local Board, budget is presented to the various local governing bodies for consideration of funding.

4.5.3.2 Vending Commissions Funds Budget

The Vending Commissions Funds are derived from commissions from auxiliary enterprises, primarily the operation of the Snack Bar and vending machines as well as limited funds from the rental of lockers. Each year the College prepares a budget for the expenditure of these funds. Vending Commissions funds are used for faculty and staff activities, Faculty Senate, Classified Support Staff Association and Arts Array as well as for Alumni Association and Student Government association support.

The Vending Commissions Budget is funded by revenue collections in the previous fiscal year. In July the Vice President of Financial and Administrative Services analyzes the collections from the previous fiscal year and reports the amounts to the President. The President receives input and suggestions to be included in the current year’s budget. President meets with Vice Presidents and Accountant to review details and recommendations. A rough draft is formed and presented to PAC in August for review and approval. Proposed budget is presented to the Local Board at the September meeting for review and approval.

4.5.3.3 Student Activity Fee Budget

Student activity fees may be established by the local boards subject to approval of the State Board. Further information regarding this policy may be found in VCCS Policy Manual, Section 4.3.1.4 available at http://www.vccs.edu/Portals/0/ContentAreas/PolicyManual/SEC4.pdf#page=16 In accordance with this policy, the College assesses a student activity fee of $1.00 per credit hour for all credit courses. Each year, the College prepares a budget for the expenditure of proceeds from the student activity fee. These funds are used for student development, student government association, Arts Array, local drama productions, commencement, photo identification cards, new student orientation, local wellness program, and diplomas.

The Student Activity Fee Budget is funded by revenue collections in the current fiscal year. In July the Vice President of Financial and Administrative Services analyzes the revenue projections and reports the amounts to the President. The President receives input and suggestions to be included in the current year’s budget. President meets with Vice Presidents and Accountant to review details and recommendations. A rough draft is formed and presented to PAC in August for review and approval. Proposed budget is presented to the Local Board at the September meeting for review and approval.

4.5.3.4 Local Bookstore Commissions Fund Budget

The Campus Bookstore is leased to a contractor. Commissions received from the contractor are deposited as unrestricted funds to VHCC Local Funds. At the discretion of the Local Board, Bookstore commissions are transferred to Local Plant Funds for use toward capital projects as described in Section 4.5.3.5 below.

4.5.3.5 Local Plant (Capital) Budgets

Policies and procedures related to Physical Facilities are found in section 10 of the VCCS Policy Manual. http://myfuture.vccs.edu/Portals/0/ContentAreas/PolicyManual/sec10.pdf For capital projects, including the construction, repair, and maintenance of parking facilities, the College must seek site development funds from local and private sources. Further information regarding this policy may be found in VCCS Policy Manual, Section 10.0.1.0.2.

As required by VCCS Policy Manual Section 10.0.1.0.2 referenced above, the College must develop sufficient reserves for ongoing maintenance and replacement of parking facilities. The College maintains a Capital Outlay Parking Auxiliary Plan and corresponding fund to provide for the construction, repair, and maintenance of parking facilities. This plan and fund are approved by the Local Board. In lieu of a parking fee, the College transfers a portion of Bookstore commissions to the Capital Outlay Parking Auxiliary fund. The formula used is $10 per annual FTE for the prior academic year for VHCC as well as for the Southwest Virginia Higher Education Center. Each year the SVHEC is asked to provide the annual FTE generated at that site for each institution using the facility.

In addition to the Parking Auxiliary fund, the College also maintains various other local capital funds on an as-needed basis. These funds are established by and controlled by the Local Board. Examples of some funds in the past include New Access Road, Buildings and Grounds Facility, Greenhouse, Entrance Sign, and Landscape Master Plan.

Funding for the local capital accounts is derived from commissions earned from the operation of the Bookstore as well as contributions from local jurisdictions within the College’s service region. The funding formula is described in Section 4.5.3.1 above.

4.5.4 Grant Funds Budgets

Grants and contract budgets are developed based upon the funds awarded. As grant applications are submitted, budget proposals are developed by the project director, Director of Institutional Advancement, Vice President of Instruction and Student Services, Vice President of Financial and Administrative Services, Accountant, and Business Manager.

Upon receipt of a grant award, these individuals then develop a negotiated budget for submission to the granting agency.