Chancellor’s office announces how it will address $20 million budget shortfall
Scholarships, fellowships and financial waivers that are provided by the university will not be affected by this round of cuts.
Mar. 08, 2017
The Office of the Chancellor has begun action to address the $20 million shortfall in the university’s budget determined by the state government in January.
Interim Chancellor Hank Foley said in an email sent to students, faculty and staff at about 2:15 p.m. Wednesday that the chancellor’s office has created a set of “guiding principles” that will dictate where the cuts will be made.
The chancellor’s office began using a formula that will determine the amount of money that each college, school and division will need to cut from its budget for this semester. MU spokesman Christian Basi said the office acted with input from various divisions on campus.
Though no specific timeline has been set for when each college, school and division will be notified of the amount they will need to cut, Basi said amounts should be determined in the next couple of weeks.
From there, each division will make decisions about how they will reduce their budget for the remainder of the fiscal year.
The principles set forth by the chancellor’s office include:
Scholarships saved from cuts
According to the documents, general operating fund allocation for campus-based scholarships, fellowships and waivers will be exempted from the reduction formula. Students who receive financial assistance through an MU program should not see a decrease in their aid.
Auxiliaries not off the hook
MU auxiliaries, which are university-affiliated organizations that do not receive funding from the university, will be treated the same way as other units and will also be subject to the formula.
This means organizations like the Department of Residential Life and Campus Dining Services will need to contribute funds to cover the funding shortfall, even though they do not receive monetary allocations from the university.
Emphasis for cuts on reserved funds
In determining the amounts that each college, school and division will need to cut, more emphasis will be placed on the amount of money the divisions have in reserves than their annual fund allocation, which is the amount each receives from the university for the year.
According to the chancellor’s office, 70 percent of the weight in the funding formula will be put on amount of reserves the division has and 30 percent will be put on their annual funding.
Though reserve funds are generally not budgeted for necessities within departments, they are often earmarked for different things that can include facility upgrades or new equipment. Basi said that while these funds do not go toward day-to-day operations, planned projects or purchases departments may have planned to fund may be halted because of the mandated cuts. He said specific decisions about those sorts of reductions have not yet been made.
This formula only applies to the $20 million withheld by the state government for this fiscal year and therefore does not apply to next semester’s funding.
Edited by Kyle LaHucik | firstname.lastname@example.org