FAS Maps Budget For Departments

The Faculty of Arts and Sciences has prepared a road map for its departments and centers as they construct the budget for the upcoming fiscal year in the face of an $80 million deficit.

Earlier this month, Dean of Administration and Finance Leslie A. Kirwan ’79 presented administrative heads of FAS units with a time frame detailing the planning process of the budget for the fiscal year beginning this July. The budget will be finalized by May 30.

Kirwan’s letter dictates that all FAS departments, centers, and tubs submit budget forecasts to FAS Dean Michael D. Smith by the end of February. Between Feb. 28 and March 15, each unit will work with FAS administrative deans and finance analysts to fine tune their respective budgets.

Kirwan calls for a more centralized budgeting process that will place decisions in the hands of FAS finance administrators. In accordance with the “first-dollar principle,” units are being asked to work with FAS administrators to determine “core expenses” and to duly prioritize the units’ restricted resources.

Kirwan’s letter does not define the exact nature of these “core expenses,” choosing to leave interpretation open to the collaborative efforts between the unit, the appropriate divisional dean, and the central Recording Secretary’s Office.

By the end of March, administrators will draw up an estimate of FAS’ total expenses for the fiscal year ending in June 2011 and reevaluate the status of the deficit, which currently stands at $80 million.

Departments will then vie for subventions—unrestricted funds that Smith will distribute to units as he chooses.

In the past year, FAS has undergone a tumultuous budgeting process that included various town hall meetings conducted by Smith, who trumpeted the need for massive “reshaping” to confront a looming $220 million deficit brought on by the financial crisis.

As the financial picture soured in the fall of 2008, Harvard’s endowment fell 22 percent in the span of four months.

University administrators then awaited the endowment payout for the coming fiscal year, but the news from the Corporation—the University’s top governing board—did not materialize until March 2009.

But this spring, budgetary planning for fiscal year 2011 will proceed on a more traditional schedule, given that FAS will be working off of long-standing projections.

In the month following the March 2009 announcement of the payout, Smith projected the 2011 fiscal year budget would see an additional 12 percent decrease in the payout to FAS.

“We are already working collaboratively with departments, centers, and other units of FAS to develop [fiscal year 2011] budgets in line with the guidance issued on February 4,” FAS spokesperson Jeff Neal wrote in an e-mailed statement on behalf of Kirwan.

Armed with the schedule and tentative projections, department administrators are entering into the early stages of the budgeting process.

“Last year was so unusual of course,” said Sociology Chair Robert J. Sampson. “Hopefully this year will be smoother.”

—Staff writer Noah S. Rayman can be reached at nrayman@fas.harvard.edu.

—Staff writer Elyssa A.L. Spitzer can be reached at spitzer@fas.harvard.edu.