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Budgeting

FY 2018 Budget Guidelines - Urbana-Champaign Campus

Budget Guidelines

SALARY RATE INCREASES

A general personnel salary program consisting of a merit-based 1.0% increment was announced by President Killeen this week. The effective date of the increases for academic employees is August 16, 2017 and for civil service is August 27, 2017. There are no formal campus-imposed eligibility exclusion parameters included in this program. This means, for example, that employees who received a salary increase or promotion after a certain date are not automatically excluded, as has been the case in recent salary programs. Thus, it is assumed that the vast majority of employees are eligible. Salary increase decisions for individuals funded with restricted funds are subject to the same guidelines as govern such decisions for individuals funded with State funds. Details by employee category follow, and your revised budget allocation sheet, which will be forthcoming soon, contains the details of your allocation.

As in the past, Provost Office approval is required for specific cases. Note that instructions for obtaining approval are included below. Thus, there is no need to submit a supplementary listing to the Provost Office:

  • Salary increases greater than 7.0%. Justification should be noted in the comments field of Salary Planner. These will be reviewed by the Provost Office in Salary Planner. Therefore, no additional justification is required.
  • Academic salary assignments of $90,000 that are new appointments or are meeting/exceeding this salary level for the first time (per Communication No. 3). These will be reviewed by the Provost Office in Salary Planner, therefore, no additional justification is required.
  • Zero-percent increases. Justification should be noted in the comments field of Salary Planner. These will be reviewed by the appropriate central HR office and the Provost office in Salary Planner and therefore, no additional justification is required.

ACADEMIC EMPLOYEES

Tenure-Track Faculty

Promotional increases for tenure-track faculty effective August 16, 2017, do NOT disqualify them from participation in the general salary program and are not intended to replace merit increases.

Academic Professional Employees

Units should have conducted performance appraisals in accordance with campus policies prior to recommending increases. Completed appraisal forms should be retained in the unit.

AP employees who have been issued a notice of non-reappointment based on performance shortcomings should not receive a salary increase.

The minimum salary for 12-month full-time academic professional staff is $30,826, pro-rated for FTE and service basis.

Academic Collective Bargaining Units

Salary increases for employees in these represented categories are governed by the collective bargaining process and negotiated agreements.

Non-Tenure Faculty Coalition (NTFC)

The negotiated agreement with the Non-Tenure Faculty Coalition (NTFC) specifies that members are eligible to participate in whatever general salary program is announced, thus they are eligible for this 1.0% merit-based program.

Promotional increases for non-tenure track faculty members to be effective August 16, 2017, do NOT disqualify them from participation in the general salary program and are not intended to replace merit increases. Consistent with the agreement, any salary determination is at the sole discretion of the unit.

The minimum salary for a 9-month, full-time non-visiting non-tenure track faculty member is $43,000.

Please contact Sharon Reynolds, (sreynlds@illinois.edu or 217-333-0033) with questions.

University Laboratory High School Faculty Organization

The negotiated agreement with the Uni Faculty Organization (UFO) specifies that members are eligible to participate in whatever general salary program is announced, thus they are eligible for this 1.0% merit-based program.

Please contact Sharon Reynolds, (sreynlds@illinois.edu) or 217-333-0033 with questions.

Visiting Academic Professionals (VAP)

The Visiting Academic Professionals (VAP) agreement establishes that all VAP bargaining unit employees who are employed as of August 15, 2017 shall be eligible for a wage increase on their individual appointment renewal date occurring between August 16, 2017 and August 15, 2018.

Please contact Heather Horn, (hwilson@illinois.edu or 217-333-0033) with questions.

Graduate Employees Organization

The Graduate Employees Organization (GEO) agreement establishes specific wage provisions, including:

TA/GA – Represented

Minimum: Based on the collective bargaining agreement with the GEO, in AY17, the minimum salary for a 50%, nine-month appointment is $16,360.80. Appointments of a different duration or percentage shall be figured proportionately. The appointing unit may pay above the minimum amount.

At this time, the University is in active contract negotiations with the GEO and no increases can be granted to represented assistants until such time as an agreement has been reached. After a new contract is executed, any raises will be processed at that time.

RA/PGA/TAR – Not Represented

Minimum: The minimum salary for a 50%, nine month appointment remains at $16,360.80. Appointments of a different duration or percentage shall be figured proportionately. The appointing unit may pay above the minimum amount.

Continuing: Continuing assistants are those that are reappointed in the same job and in the same unit that the assistant held in the previous semester (summer excluded) or within the three previous academic years. Continuing, non-represented assistants (RA, PGA) are eligible for an increase of 1.0% based on the general salary program.

Minimum salary ranges can be accessed at: http://humanresources.illinois.edu/assets/docs/AHR/Grad-Asst.-minimum-rates-2017-2018.pdf

Please contact Heather Horn, (hwilson@illinois.edu) or 217-333-0033 with questions.

Processing

Units should use the HR Salary Planner to submit the bulk of their academic salary increase recommendations. Job or title changes for non-tenure system academic employees should be processed through the normal approval and HR Front End processes. Academic Human Resources will manage the academic salary planner processes. The deadline for units to complete all changes is August 18, 2017. Academic HR will provide detailed Salary Planner instructions to those with Salary Planner access.

Questions about using the HR Salary Planner for processing Academic salary increases or about the Academic salary program in general should be directed to Stephanie Haas (shaas@illinois.edu) or Doug Lamb (dougl@illinois.edu) at 217-333-6747.

CIVIL SERVICE EMPLOYEES

Open Range Employees

It is expected that increases for open range employees, as a group, should match the increases for academic professionals. Employees in a probationary period are not eligible for consideration for a merit increase until they have successfully completed their probationary period. Employees serving a probationary period at this time may be granted a merit increase within 30 calendar days following completion of the probationary period. Units are reminded to conduct performance appraisals for all Open Range employees prior to recommending merit increases.

Processing

Units should use the HR Salary Planner to submit their Open Range salary increase recommendations. Staff Human Resources will electronically retrieve the final Open Range increases from units. The deadline for units to complete all changes is August 28, 2017.

Questions about using the HR Salary Planner for processing Open Range salary increases or about the Open Range salary program in general should be directed to Robbie Witt (rswitt@illinois.edu) or Philip Stanton (prstanto@illinois.edu), Staff Human Resources, 217-333-2136.

Civil Service Collective Bargaining Units and Prevailing Wage Categories

Salary increases for employees in these represented categories are governed by the collective bargaining process and units must consult the appropriate collective bargaining agreement for details concerning salaries. Please contact the Staff Human Resources office if you have questions about specific civil service contract provisions.

For questions related to civil service employees covered by a collective bargaining agreement, please contact Leslie Arvan (arvan@illinois.edu or 217-333-3105). As always, units are responsible for funding the costs of negotiated agreements.

TUITION REVENUE GENERATION

The Revenue Generation Table supports the budget allocation sheet by providing data related to distributed tuition as detailed in Provost Communication 1. The FY 2017 and FY 2018 levels of distributed tuition are shown. Changes in undergraduate base-rate tuition are distributed based on $110 per IU and $2,500 per major. Undergraduate differentials are distributed to the generating units. Note that 15% of incremental differential tuition is held to supplement financial aid. The balance of the general tuition increase and surcharge funds are not distributed but are used to help fund incremental costs, including financial aid.

Under Provost Communication 1, units do not receive a summer session allocation but generate summer budgets from the instructional units they teach during summer. Summer allocations for FY 2018 are based on estimated summer 2017 undergraduate income and summer 2016 instructional units. In the fall, adjustments will be recorded to reflect summer 2017 instructional units and actual summer 2017 tuition earnings.

The earned funds portion of the budget process is complicated. The Office of Business and Financial Services has placed explanatory materials on the web at the OBFS website at /budgeting/urbana-champaign-campus/budget-reform/budget-reform-spreadsheets. If you have questions, please visit this website and contact Suzanne Rinehart if questions remain.

FY 2018 BUDGET ASSESSMENTS

As a central part of our budget strategy, we must reduce our reliance on the State of Illinois. In order to do that, we will reduce costs, reorganize within and among units, and invest strategically to grow our net revenue. Our strategies must advance our reputation and our net revenue. As we have discussed, one of those strategies involves reallocating $10.6 million in recurring funds from activity-based units. From that $10.6 million, we will create an investment pool of nonrecurring funds to support growth and reorganization proposals. We realize that meeting these reductions is challenging for units, but the budget impasse in Springfield compels us to act now to reduce our reliance on state appropriations and to act in ways that ensure our strength and long-term success. Select centrally-budgeted units will also sustain budget reallocations.

Central campus funding will cover the hiring program, Medicare and Worker’s Compensation increases, or other common costs this year. Thus, units will not receive an additional reduction of their State, Income Fund, and allocated ICR bases to fund these programs.

CONTROL OF FUNDS DURING FY 2018

In developing the budget for State funds, units will be allowed to reallocate funds from one budget category (academic salaries, nonacademic salaries, wages, expense, and equipment) to another. Each major academic unit may have an "unassigned account" in which all funds for vacant academic positions, new allocations, or dollars generated through the reduction or elimination of programs by the college will reside until the relevant Vice Chancellors, Deans and Directors determine the utilization of the resources.

Vice Chancellors, Deans and Directors will continue to control salary dollars related to academic leave lines. Units will retain control of all funds related to academic and civil service staff salary lines that become vacant during the year. Units are encouraged to give serious consideration to infrastructure needs (wages, expense, or equipment) when making personnel decisions.

There is considerable budget uncertainty since, at this time, the State of Illinois Legislature has failed to pass a State budget for the third straight year. The FY 2016 and FY 2017 stopgap legislation resulted in an allocation of only about 25% and 50%, respectively, of the campus’s FY 2015 funding, and it is not clear when and to what extent this gap of approximately $306 million will be funded by the State. Therefore, activity-based units are also required to hold non-recurring budget in a separate account that can be accessed by campus when it is known if additional FY 2017 funding will be provided by the State. The amount each unit must hold is equal to 1.25 time their permanent reduction amount and is included at the bottom of the FY 2018 draft budget allocation sheet. Note that it may also be necessary to implement a similar contingency plan in the event of an FY 2018 cash shortfall.

ALLOCATION OF ICR FUNDS

Unless another distribution formula has been approved for a unit, 45% of indirect cost recoveries (ICR) related to facilities and administration will be distributed to the college and department. In addition, 75% of earnings related to tuition remission will be distributed to the academic college of the student generating the remission. Remission funds may be used to fund graduate education and support graduate students. These funds can be used by units to fund partial fellowships required as student’s salaries reach the NIH salary cap.

The procedures to be followed in preparing the FY 2018 budget for ICR earnings are as follows:

  1. An estimate of the F&A earnings portion of the total indirect cost to be recovered during FY 2018 is to be made by the college and department and recorded as a revenue and expense budget in the appropriate C-FOP via the budget development application. Program codes used for budgeting F&A related ICR should have the ‘E’arned attribute.
  2. An estimate of the tuition remission earnings portion of the total indirect cost to be recovered during FY 2018 is to be made by the college and recorded as a revenue and expense budget in the appropriate college-level C-FOP via the budget development application. The program code used for budgeting remission related ICR should have the ‘T’uition remission attribute.
  3. Do not include expected carry-over in the FY 2018 budget process.
  4. The recorded budget for F&A earnings will be reflected in monthly detailed F&A earnings statements. Budget adjustments will be made semi-annually to reflect the actual and projected earnings for the year.
  5. The recorded budget and actual tuition remission earnings will be reflected in quarterly tuition remission earnings statements. The budget office will transfer “actual” tuition remission revenue on a quarterly basis to the designated college-level tuition remission FOP; the budget will be adjusted to reflect actual recoveries at the end of FY18. The college is responsible for distributing the tuition remission based on their internal ICR policy.
  6. Since allocations for both F&A and tuition remission earnings will be adjusted to reflect actual earnings, units will not be either advantaged or disadvantaged by the level at which they set their earnings estimate.

In the case of interdisciplinary programs, there may be some question as to the distribution of ICR funds. If the parties involved are unable to resolve a problem, they should consult the Office of the Provost.

Please remember that no F&A funds should be budgeted or expended for the direct support of instructional programs. Instructional programs are those courses which are credit bearing and/or courses which lead to a credit-bearing degree. Additionally, ICR funds should not be expended in administrative units whose only activity is the support of instructional programs.

While every effort will be made to accommodate the individual ICR carry-over requests of departments, the campus, as a whole, is limited to a carryover of 30% of the total ICR budget. Please work with the budget office of the Office of Business and Financial Services if you anticipate a large increase in your year-end balance.

BUDGETING ENDOWMENT INCOME

Units receiving endowment income will be notified of the assigned FY 2018 budget excluding carry-over balances. The FY 2018 budgeted amount is based upon 4.0% of a six-year moving average of the endowment pool market value.

The income budgeted for FY 2018 is guaranteed; however, additions or withdrawals from the endowment pool made prior to June 30, 2017 will result in a budget adjustment. Over or under realizations of income at the end of FY 2018 will be charged or credited to the account which holds gains or losses from sales of securities.

RESTRICTED FUNDS

Restricted funds include all grants, contracts, self-supporting and auxiliary activities, storeroom and service departments, and other similar accounts, the use of which is restricted to specific purposes. Expenditures made from these funds are subject to the Board of Trustees general rules governing such expenditures and must be within the total income accruing in the account involved.

It is the responsibility of department heads and similar officers to see that funds are available for all positions or other items listed under restricted fund accounts. Salary minima, union negotiations, and other University regulations governing appointments and the use of funds apply to restricted funds. Salary increase decisions for individuals funded with restricted funds are subject to the same guidelines as govern such decisions for individuals funded with State funds.

CONCLUSION

Questions concerning these Budget Guidelines should be addressed to Vicky Gress or Andrea Hoey at 217-333-4493 or Suzanne Rinehart at 217-333-9526.

Last Updated: August 3, 2017

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