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Probation Area 5.A: Strategic Budgeting

Task: As stated in the HLC action letter, Highlands must provide evidence that the institution has ameliorated the findings of non-compliance identified in this action that resulted in the imposition of Probation, Core Component:

  1. University accomplishments, plans and results in increasing and stabilizing its CFI, primary reserve ratio, and University reserves;
  2. use of new institutional capital planning strategies demonstrating progress to keep projects on time, within scope and on budget; and
  3. mission-driven, integrated and transparent strategic planning and budgeting decisions;

More information was provided in the HLC action letter:

The University is out of compliance with Criterion Five, Core Component 5.A, “the institution’s resource base supports its current educational programs and its plans for maintaining and strengthening their quality in the future,” for the following reasons:

  • The University has not demonstrated that it has the financial resources to support its programs and its plans for maintaining and strengthening their quality, nor has it demonstrated appropriate financial practices in this regard, because:
    • the University’s history is marked by recurrent and unresolved fiscal concerns including revenue declines, an unstable CFI score, little evidence of sustained planning activities, and a 15-year history of financial concerns, as expressed in the 2000 Comprehensive Report leading to a 2004 Focused Visit, a 2009 Monitoring Report, and 2013 Financial Indicators Report, which indicate the University’s challenge in meeting this requirement;
  • The University has not demonstrated evidence of a completed integrated planning process, any accomplishments attained for Strategic Plan-HU Vision 2020, or sustained processes for strategic plan implementation or established budget procedures; and
  • While the University in its August 2016 response described positive cash flow as well as the likelihood of additional cuts from the state, there appeared to be no new financial resources since the Commission’s recent evaluation to assure improved financial support for educational operations now and in the future.

Resolution: Highlands needs to accomplish things to resolve Probation Area:

  1. Provide evidence of accomplishments, plans, and results in increasing and stabilizing our CFI, primary reserve ratio, and University reserves.
  2. Provide evidence of our new institutional capital planning strategies, including our success in completing the Trolley Barn on time and under budget.
  3. Create a mission-driven, integrated, and transparent strategic planning process (see Probation Area 5.C) and budget process.
  4. Show evidence of integrated and transparent budgeting decisions.

Note: The evidence of the integrated and transparent strategic planning is present in Probation Action Plan 5.C.

Background: As noted by the HLC, Highlands has had 15-year history of financial concerns. The core of this probation area, along with Probation Area 5.C, ties to our lack of sustained evidence of budgeting to strategic planning, and then transparently presenting those budget decisions to the university community.

  Milestone Completion Responsibility Evidence
Creation of plan to increase and stabilize the CFI, primary reserve ratio, and University reserves Fall 2016 VPFA Discussed in 5.A. of Assurance Argument
Fall 2016 report to Board of Regents and Campus Community on our accomplishments regarding this plan November VPFA 2015-2016 Audit (approved by regents and NM Department of Finance and Administration; contains section on reserves)
Spring 2017 report to Board of Regents and Campus Community on our accomplishments regarding this plan Spring 2017  VPFA Budget approved at April 28, 2017 meeting
Fall 2017 report to Board of Regents and Campus Community on our accomplishments regarding this plan Fall 2017 VPFA HLC Assurance Argument 5.A. (shows CFI, reserves; presented to Regents on September 6, 2017), Audit will be completed November 2017
Creation of new institutional capital planning strategies (ICPS) to keep projects on time, within scope, and on budget Prior to Trolley Barn Project Director of Facility Services

 

Facilities Management Procedures for Building Renovation and Construction Projects Over $1 Million

Application of new institutional capital planning strategies to Trolley Barn project Summer 2016 (completion of Trolley Barn) Director of Facility Services Trolley Barn Budget and Timeline
Revision of ICPS based on Trolley Barn project Fall 2016 Director of Facility Services Facilities Management Procedures for Building Renovation and Construction Projects Over $1 Million
Formal approval of ICPS by Administration and Board of Regents Spring 2017 Board of Regents Board of Regents Minutes
Discussion of strategic plan and ICPS with Campus Master Planning Firm Spring 2017 Director of Facility Services Campus Master Plan
Drafting of new Campus Master plan Spring 2017 Architecture Planners Campus Master Plan
Application of ICPS to Rogers Administration Project 2018-2019 Director of Facility Services Rogers Building Budget documents
Drafting of strategic budgeting process, with feedback from administration and faculty Fall 2016 VPFA Budget Process
Approval of Budget Process by Faculty Senate September 14, 2016 Faculty Senate Faculty Senate Minutes
Formal launch of Financial Year 2017-2018 Budget Process Fall 2016 VPFA Global e-mail, linked on VPFA page
Distribution of FY18 Strategic Priorities Fall 2016 VPFA FY18 Priorities
Fall 2016 Listening Sessions Fall 2016 VPFA Listening Session documents
Formation of Campus Budget Committee (CBC) October 2016 VPFA Budget Process (description of committee); Meeting Minutes
Budget requests due with explicit links to strategic plan October 18, 2016 VPFA Budget requests
Budget hearings with individual units November 2016 Budget Director Budget Timeline
Winter 2016 Quarterly meeting of CBC November 17, 2016 VPFA Meeting minutes
Budget prioritization based on strategic goals and yearly priorities November 2016 – January 2017 Executive Management Team Found in VP budget prioritizations
Fiscal Year 18 Budget presentation to campus March 2, 2017 President, VPFA Zoom recording; Presentation on Priorities
FY18 Budget approved by Board of Regents Spring 2017 Board of Regents April 28, 2017 meeting minutes
Spring 2017 Quarterly meeting of CBC Spring 2017 VPFA Meeting minutes
FY19 Budget priorities set August 2017 (delayed by state legislature not approving Higher Ed budget) Strategic Planning Group FY19 Priorities
  Units work on budgets and strategic plans Fall 2017 Units FY19 Budget Timeline
  Fall 2017 Listening Sessions August 30, 2017 VPFA Listening Session documents
Budget requests due with explicit links to strategic plan Fall 2017 Units FY19 Budget Requests
Budget meetings between VPs and Deans and departments/units Fall 2017 VPs/Deans VP/Dean Budget Prioritizations
Winter 2017 Quarterly meeting of CBC Winter 2017 VPFA Meeting minutes
Budget prioritization based on strategic goals and yearly priorities Winter 2017 Executive Management Team FY19 Budget Prioritization
Fiscal Year 19 Budget presentation to campus Winter 2017 President, VPFA Zoom recording
FY19 Budget approved by Board of Regents Spring 2018 Board of Regents Board of Regents minutes