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FY21 Budget Message

SDSU Community –

As we finish this academic year, we would like to first thank you for all of your efforts in this unprecedented year of change. Your commitment to our students and university has been exceptional and the response of the campus as a whole to the COVID-19 pandemic has been truly amazing.

From a financial standpoint this year has also had its challenges. We began the year with our September campus communications on our enrollment challenges, followed by continued communication of Faculty Budget Committee FAQs, budget adjustments updates and finally our Annual Budget Hearings which had to be communicated in a voice recorded format as opposed to our typical face-to-face meetings.

Throughout this process we have discussed our projected revenue shortfall of $2.2 million for FY20 and anticipated additional decrease of $3 million in FY21. Because of the hard work of many across campus and the cost reducing strategies we implemented in the fall, such as travel restrictions, holding open positions and limiting discretionary spending, we continue to be on pace to achieve our goal of balancing our FY20 budget. Thank you to all for your work on achieving this goal.

As we look towards FY21, we are better positioned financially than many universities across the county because of the difficult decisions that we made and executed throughout this past nine months. With that said, one does not have to search very hard to find numerous articles on the uncertainty facing higher education in the coming fiscal year. Uncertainty about the impacts of COVID-19 on enrollment, residential life occupancy, and fundraising will remain in the weeks and months ahead. It is not clear which units will be most greatly impacted, as tuition, program fees, fundraising and auxiliary income will probably all be impacted to varying degrees.

As a result of this uncertainty, the University Budget Oversight Committee recommended to President Dunn that a taskforce be formed to look at temporarily moving the university to a centralized budget model during FY21. This request was also discussed with the Faculty Budget Committee. The taskforce will provide recommendations to President Dunn on the principles of this move including guiding principles for entering and existing the centralized model, timing of decisions, suggestions for maintaining units current financial positions to the extent possible when we return to the RCM and other topics related to this temporary transition.

It is important to note that the university remains committed to our RCM model but with the unprecedented uncertainty that exists for FY21 across all areas of campus the group believed it would be more transparent for the university to move to a centralized model for the next year. This includes communication informing units that salary salvage and operating budget savings will be pooled centrally and then will be distributed to units to ensure the university’s financial stability.

While this challenging time, we believe that this temporary transition in concert with the difficult decisions made in FY20 keeps the university in the most sound financial position as we move through this pandemic. Transparency and shared governance will be as important in this transition as ever, so committees such as the University Budget Oversight Committee, Faculty Budget Committee and processes such as are annual budget hearings will remain intact.

We will continue to update the campus through campus communications, but int the meantime please direct any questions or comments to the Office of Finance and Administration.

Thank you again for all for all your support of our great university. Together we will continue to address the challenges of today while meeting the needs of our students and the state of South Dakota.

Sincerely,

Dennis Hedge, Provost and Vice President for Academic Affairs

Mike Holbeck, Interim Vice President for Budget and Finance