Budgeting

To provide procedures that will insure conformity in the gathering of information and the eventual discernment of that information on a District-wide basis while efficiently employing the resources and time of the District’s employees.

The budget planning process will allow the Board to be in compliance with the objectives as stated in the Lone Star College System Policy Manual, Sections CC (Legal & Local) and CAA (Local).

The scope of this section is to provide guidelines to the development of an annual budget that complements the General Fiscal Philosophy as stated in the Lone Star College System Policy Manual, Section CAA (Local):

The Board of Trustees shall approve an annual budget by August 22 of each year that accounts for funds required to secure the personnel, facilities, equipment, materials and services required to accomplish effectively the approved functions of the District.

These guidelines will outline specific functions to be performed, the timing of those functions and the designated responsible individuals involved from both the Colleges and District Offices.

Board Policy, as it relates to the Budget Planning process can be found in Sections CC (Legal & Local ) and CAA (Local) of the Lone Star College System Board Policy Manual. Specific references have been extracted into the guidelines below, as functionally appropriate, and have been highlighted in italics. However, a general policy statement concerning the Annual Operating Budget Planning Process found in Section CC (Local) states:

Budget planning shall be an integral part of overall program planning so that the budget effectively reflects the District’s programs and activities and provides the resources to implement them. In the planning process, general educational goals, and alternatives for achieving program goals shall be considered. Budget planning and evaluation are continuous processes and should be a part of each month’s activities.

The Chancellor or his designee shall determine and assign budget preparation responsibilities.

The Chancellor shall serve as budget officer for the District. The Budget officer’s duties shall include:

The Chancellor shall designate the Vice Chancellor for District Services as deputy budget officer. The deputy budget officer shall assist in professional and technical aspects of the budget preparation.

Lone Star College System Policy Manual, Section CC (Legal)

The budget preparation calendar and any revised calendars shall be prepared each year by the Director of Business Affairs in conjunction with the Vice Chancellor for District Services.

The Chancellor or designee shall supervise the development of a budget calendar and a specific plan for budget preparation that ensures appropriate input from all levels of operation within the District.
Lone Star College System Policy Manual, Section CC ( Local).

The annual budget building process will begin late in the Fall Term or early in the Spring Term with the budget to be adopted by the Board of Trustees at either the July or August meeting.

An itemized budget covering the operation of the District shall be approved on or before September 1 of each year for the fiscal year beginning on September 1 of each year.
Lone Star College System Policy Manual, Section CC ( Legal).

A copy of the approved budget must be filed with the Texas Higher Education Coordinating Board Legislative Budget Board, and Legislative Reference Library.

Copies of the annual operating budget shall be furnished to the Coordinating Board for distribution to the Governor’s Budget and Planning Office, Legislative Budget Board, state auditor, and Legislative Reference Library and as required by contractual agreement.
Lone Star College System Policy Manual, Section CC ( Legal).

The Lone Star College System Annual Budget shall be prepared by the Director of Business Affairs.

After adoption by the Board of Trustees, the budget will be distributed by the Director to each College for its replication and further distribution.

After adoption, the Director of Business Affairs will distribute one complete copy to each location library or Resource Learning Center.

The Budget is developed using information from the following major areas:

1. Strategic Plans & Assumptions

2. Revenue Sources

3. Location Allocation

4. Expenditures

5. Staffing Plan

6. Capital Needs

Each area has been explained, in more detail, below.

Each College President and Department Head is asked to submit a strategic plan for the upcoming year. This plan should include assumptions about enrollment, future instructional goals, changes in current processes, procedures and laws and any other area that will require a future commitment of resources that will need to be allowed for in the planning process.

The Chancellor and Vice Chancellor for District Services will review these plans and decide on projected enrollment levels and which projects should/must be addressed in the upcoming Budget in conjunction with the Executive Council.

Revenue is derived from many different sources, as outlined below. A more in-depth discussion of revenue can be found in the Treasury section of this manual.

1. Tuition & Fees - The enrollment projections, by College, are used to arrive at expected tuition and fees revenue. The Board will be requested to establish a tuition rate sufficient to support the educational plans and the projected expenditures necessary to implement those plans.

2. Tax Levy Collections - Information from Appraisal Districts’ tax rolls is used to approximate tax revenues. Rates are estimated that will allow the District to finance operations and to pay the principal and interest on general obligation long-term debt.

3. State Appropriations - Appropriations come from the State Legislature at contact hour rates established by the Texas State Coordinating Board.

4. Interest Income - This is estimated from an investments schedule prepared by the Treasury Department. The District’s investments consist of fully collateralized or insured certificates of deposit, US Treasury securities, and US government agency obligations.

5. Other Income - This includes but is not limited to Sales of Assets, Contributions, Grants and Income from Auxiliary Activities.

The Colleges will receive an budget allocation based on a combination of the following:

1. Fixed Allocation

2. Allowance for Maintenance based on square footage and academic credit hours.

3. Funding for Estimated Contact Hours directly relating to Academic, Vocational-Technical and Community Education classes to be offered.

4. Staff Benefits

5. Net Continuing Education Income

6. Net Laboratory and Other Fees

7. Miscellaneous Income

8. Other Differentials originating from District-wide priorities (i.e. the establishment of new centers)

The allocation will consist of Projected Revenues and Use/(Surplus) of Fund Balances Less amounts for the District Office Budget, Debt Service Obligations and other non-distributable expenses.

The budget must be itemized in detail according to classification and purpose of expenditure and shall be in the format required by the "Annual Financial Reporting Requirements for Public Community and Junior Colleges in Texas."
Lone Star College System Policy Manual, Section CC (Legal)

Classifications and definitions of Educational and General Expenditures (Elements of Institutional Costs) as required by the State of Texas, are detailed below in Appendix A.

The District utilizes Expenditure Account Codes to allow for accurate classification, collection and summarization of expenditures. These account codes are detailed below in Appendix B.

Staffing Plans are developed by each College/Department with the assistance of the Department of Human Resources. All additions to staff must be approved, in advance, by the Chancellor. Please refer to the Personnel section of this manual for more complete information.

Continual planning and regular evaluation of the District’s programs and activities are integral parts of the process to insure that general educational goals and specific program goals are effectively being accomplished. The Executive Director of Finance and Treasury shall report to the Board, on a monthly basis, the actual financial status of the District as compared to the planned goals and budgets previously established for the operations of the District.

To enable the Board to accurately know the policy impact of financial decisions and to allow the District to meet budgetary and operational goals, Financial Planning is required as a continuing process. Financial Planning is the responsibility of the Finance Department, under the direction of the Executive Director of Finance and Treasury.

Fund requirements for the District are met through the collection of tuition, fees, state allocations, ad valorem taxes, federal and state grants, interest on investments, other auxiliary sources, maintenance of fund balances and issuance of bonds (general obligation, combined fee revenue and contractual obligation) which are based principally on future revenues from property taxes, tuition allocation and investment income. A more in-depth discussion of this area can be found in the Treasury - Investments section of this manual.

Salaries, wages and all other costs for the following functions and activities.

1. General Administration

   1. Government of the Institution - Costs incurred on behalf of the governing body in discharging its responsibilities. Example: Governing Board.

   2. Executive Direction and Control - Costs incurred in the executive direction, control and implementation of policies of the governing board and the Chief Executive Officer. Excluded are costs of academic administrative functions. Examples: Offices of Chief Executive Officer, Chief Academic Officer and Assistants.

   3. Business and Fiscal Management - Costs incurred in the attainment of financial goals through proper and effective accounting records and procedures and budgetary and cost controls. Examples: Business Office, Financial Office, Personnel Services, Purchasing, Property and Inventory Control, Internal Audit, Systems and Procedures, Tax Office.

2. Student Services

   1. Admissions and Registration - Costs of administering admission activities, Processing and maintenance of student records and reports and the registration of students. Examples: Registrar’s Office, Dean of Admissions

   2. Other Student Services - Costs of Administering and coordinating the development and maintenance

General Institutional Expense - Expenses of a general nature which benefit the entire institution and are not related solely to any specific department or division. Included are salaries, wages and all other costs for the following functions, services or activities (excluding Auxiliary):
Public information (i.e. Bulletins, Catalogues, Publications, etc.)
Institutional memberships
Convocations and public lectures
Official functions
Mail service
Development activities
Costs of maintaining alumni records for educational evaluation
Central telephones (excluding long distance and equipment costs)
Insurance (excluding property and benefits)
Central Administrative Computing (Information Technology)

Includes premiums or costs toward staff benefit programs. Examples: Group Insurance, Faculty Development Leaves, Retirement Plans, Workers Compensation Insurance, etc.)

1. General Academic Courses - Includes all functions directly related to teaching, classified as follows:

   1. Faculty Salaries - Salaries and wages of those engaged in the teaching function (including heads of departments, teaching assistants, laboratory assistants, teaching fellows and lecturers) who are responsible for a class, quiz, drill or laboratory section. Not included are guest lecturers, student assistants or other assistants whose primary duties involve grading, clerical functions, storekeeping or other subordinate functions.

   2. Departmental Operating Expenses - Salaries, wages, supplies, travel, equipment and other items necessary for the operation of the instructional departments, other than faculty salaries.

   3. Instructional Administration Expense - Salaries, wages, supplies, travel, equipment and other items necessary for the operation of the offices of Academic Deans or Directors of Teaching Departments. Examples include, but are not limited to: budget planning, faculty recruitment, development, curriculum expansion, student academic advisement and maintenance of scholastic and admission standards.

   4. Organized Activities Related to Instructional Departments - All costs of activities operated for the purpose of giving professional training to students as a necessary part of the educational work. Examples include: College farms, nursery schools, etc. Does not include practice teaching.

2. Vocational/Technical Courses -

   1. Faculty Salaries - Same as above, except as applicable to Vocational/Technical courses.

   2. Departmental Operating Expenses - Same as above.

   3. Instructional Administration Expense - Same as above.

   4. Organized Activities Related to Instructional Departments - Same as above.

Salaries, wages, other operating costs, books, periodicals, binding costs and equipment of separately organized libraries (including archives).

1. Salaries, Wages and Other Operating Expenses

2. Books and Equipment

Salaries, wages and other costs of separately organized research divisions such as research bureaus, institutes and investigations. Departmental and other research not separately budgeted are not included.

1. Extension and Public Service - Costs of activities designed to serve the general public. Examples include: correspondence courses, adult study courses (avocational), public lectures, radio and television stations, institutes, workshops, demonstrations or any other activity offered in response to community interest and need.

1. Physical Plant General Services - Costs to carry out duties of physical plant administration, planning and general services.

   1. Administration - Salaries, wages, travel and other costs required to administer the physical plant facilities.

   2. Planning - Salaries, wages, travel and other costs required to prepare architectural and engineering plans and specifications for the expansion renovation and rehabilitation of the physical plant facilities.

   3. Other General Services - Acquisition and repair of general classroom and laboratory furniture, central receiving, stores of supplies, safety (including fire, hazard control, sanitation), trash disposal, hauling, moving, storing, property insurance, and truck and automobile expenses.

2. Campus Security - Salaries, wages, supplies, travel and other expenses to carry out the traffic and security services.

3. Building Maintenance - Salaries, wages, travel and other costs necessary to maintain each building in good appearance and usable condition. Examples are: minor repairs and alterations, costs of materials and personnel to make repairs.

4. Custodial Services - Salaries, wages, travel and other costs necessary to keep buildings in clean and sanitary condition. Examples included: care of floors, stairways, landings and restrooms, cleaning of chalkboards, windows and furniture and removal of trash.

5. Ground Maintenance - Salaries, wages, travel and other costs related to the upkeep of all lands (improved and unimproved), including courts, patios and inner court/gardens. Examples include: Landscaping improvements, Circulation systems, streets, roads and parking areas, traffic controls, walkways, fences, fountains, lighting, greenhouses, etc.

6. Utilities - All costs to purchase, manufacture and deliver utility services, including: electricity, steam heat, water, storm sewers, sanitary sewers, compressed air, gas. Also includes owned telephone systems, repairs and preventive maintenance.

Costs of items not included in any of the other areas.

1. Major Repairs and Rehabilitation of Buildings and Facilities - Includes salaries, wages and other costs required to perform major repairs, rehabilitation and renovation of existing buildings and facilities.

2. Auxiliary Enterprises Expenditures - Costs for services which are operated for the benefit of the students, faculty and staff and which are intended to be self-supporting. Includes Cafeterias, Bookstores, Transportation, Intercollegiate Athletics, etc.