Effects of Budget Cuts Explained in Greater Detail
Posted: March 8, 2001 at 1:00 am, Last Updated: November 30, -0001 at 12:00 am
Editor’s note: The following article was written by senior vice president Maurice Scherrens and provost Peter Stearns regarding Gov. Jim Gilmore’s decision to reduce the budgets at all colleges and universities throughout Virginia and implement an immediate hiring freeze. The article, which outlines the effects this will have on the George Mason community, is printed in its entirety.
As a result of the General Assembly not reaching an agreement on the amendments to the 2000-2002 budget, the governor has imposed a temporary freeze on hiring and discretionary spending, effective Feb. 24, 2001, for all educational and general programs. This freeze does not apply to sponsored programs, overhead, or auxiliary enterprises. However, you will not be able to transfer expenditures from these ledgers to E&G programs once the freeze has been lifted as that action could be interpreted as a way to circumvent the governor’s directive. Our interpretation is that equipment trust fund transactions are also exempt from this freeze.
Along with other actions, this freeze is necessary to balance the state budget. While detailed guidelines have not been released, we have received some information regarding the spending categories.
We have been advised that discretionary expenditures are those not necessary to continue the essential functions of a department. Allowable purchases will therefore include consumable operational supplies necessary for a department to operate. These include: automotive repair parts, janitorial supplies, maintenance and repair parts for building systems, instructional supplies (science lab supplies, nursing, engineering, etc.), graduation supplies, athletic expenses (travel costs, officials, media coverage), repairs or repair parts for essential equipment for a department’s function (copiers, computers, fax machines), unique expenditures essential for the operation of units, and repairs that if not made would pose a safety or health hazard (chemical spill, sewer leaks, etc.). The discretionary categories identified by the state include travel, equipment purchases, and printing.
Furthermore, we are defining discretionary expenditures as those expenditures that can be delayed or eliminated for a period of time without affecting the day-to-day operation of the university. Therefore, we are asking that you carefully review needs for printing and equipment (other than purchases through the equipment trust fund). You should postpone all such expenditures not critical to the immediate needs of your daily operations, as well as those that can be delayed until we have a decision on the outcome of the budget or know that a budget reduction plan must be implemented. We are interpreting discretionary travel to be travel related to conferences, workshops, professional meetings, and training programs where faculty and staff are not on the program to deliver papers or participate in panel discussions, or where faculty and staff are not directly responsible for the program. We would ask that you pay particular attention to monitoring international travel. Discretionary travel expenditures should be delayed until the governor and General Assembly reach an agreement on the budget amendments to the 2000-02 Appropriation Act. We trust that such an agreement will be reached within the month.
Travel will be allowed only if “substantial” payments or nonrefundable commitments were made prior to Feb. 26. Such payments could cover airline tickets, hotel deposits, or conference fees. Perhaps shifting your travel commitments to private funds should be considered, although these expenses will not be transferable back to the E&G budget after the temporary freeze has been lifted. We are taking the position that student recruitment activities, including travel, are necessary business expenses and should continue as usual.
Rather than put together a central administrative review committee to monitor each non-personnel expenditure, the senior approving official will be responsible, and thereby empowered, to review and approve these expenditures consistent with the guidance included in this memorandum. This means that all limited purchase orders, requisitions, check requests, and American Express statements must be signed by a senior approving official. If you need further guidance, this listing can be found at the Fiscal Services web site. Please do not hesitate to call either one of us or Donna Kidd, director of budget, if you have other questions.
While we are hopeful that the hiring freeze will be lifted once the administration reviews spending reduction plans, the president will be requesting an exemption from the secretary of education for specific positions. If you wish to have an exemption on a recruitment in your area, please submit your request to Human Resources. The Request for Position Exemption form and procedures can be found on the Human Resources website. Because we expect that the freeze will be temporary, and in an effort to minimize disruption to our instructional and research programs, we encourage departments to continue with their recruitment and interviewing efforts for all teaching and research faculty positions. We will seek approval for an exemption for all teaching and research faculty positions. However, offers of employment may not be extended to candidates without prior approval by the university administration and until we have the approval of the secretary of education. If you have a search already underway, an exemption request will need to be submitted and approved before an offer can be made.
Until that exemption is acted upon, all hiring involving general funds remains under the freeze and any exemptions must be submitted to the secretary on a case-by-case basis. You may continue to recruit, but until the freeze is lifted or we receive an exemption, you may not make an offer to hire.
While we believe that the budget situation will be resolved within the month, we would ask for your understanding as we work through this process. We must remind each of you that the preliminary budget reductions that we received from the governor for both this year and next year are substantial. If these are reaffirmed later this month, we will all be required to reduce our budgets immediately and significantly. Therefore, to be financially prudent, we must be very restrictive in our interpretation of “non-discretionary” spending for the remainder of this month. As soon as we receive additional information or guidelines from the state, we will pass these on to you.