   |
PENN STATE'S STRATEGIC PLANNING AND BUDGETINGPROCESSStrategic PlanningThrough the strategic planning and budgeting process, Penn State has taken aggressive steps for many years to reduce costs and create more effective and efficient ways of operating, while at the same time preserving and enhancing academic quality. Specifically, the University has shifted resources from administrative functions to support teaching, research, and service, moved resources to the most promising and effective programs, and eliminated duplication in programs and services. Since 1992-93, for example, Penn State's Board of Trustees has approved 62 program eliminations or mergers. |
The first five-year strategic plans for all academic and administrative units at Penn State were developed in 1983. Beginning in 1992, a deliberate process of budget recycling and reallocation was incorporated into the strategic planning process. The University's current strategic planning process integrates planning, budgeting, and continuous quality improvement. This helps to ensure that the budget allocations will be based on sound and well-thought-out plans. Strategic planning at Penn State is both a 'top-down' and a 'bottom-up' process. As part of the 'top-down' process, a University-wide strategic plan was completed in 1997 for the years 1997 to 2002. The University is currently in the fourth year of this five-year planning cycle. The University Planning Council, comprised of deans, faculty members, administrators and students, reviews the strategic plans of each academic and support unit, considers requests for resources, and recommends funding levels. The 'bottom-up' process includes five-year strategic plans developed by each of the 33 major academic and administrative support units. Academic departments and colleges review their program offerings, taking into account student interest, societal and Commonwealth needs, developments in the field of study, and faculty expertise. Strong programs and those central to the mission of the University are recommended for enhancement. Low enrollment programs are identified to determine if they should be continued, merged with other units, or eliminated. Each unit's strategic plan complements and supports the goals of the University-wide strategic plan. Annual updates are prepared to measure progress and refine goals. Several years ago, University-level strategic performance indicators were developed. The indicators are tied to the six overarching institutional goals in the strategic plan and attempt to answer the question, "How well are we doing?" Strategic indicators are tracked regularly to chart progress in meeting Penn State's goals. In addition, each college and administrative unit prepares its own list of strategic performance indicators that relate both to University goals and to unit goals and performance. Budget Reductions and Reallocations Given scarce resources, Penn State has turned to internal budget reductions and reallocations to fund strategic priorities and critical operating needs. Beginning in 1992, a deliberate process of budget recycling and reallocation was incorporated into the strategic planning process. Since that time, the University's budget priorities have been to reallocate funds from administrative and support activities to its core missions of teaching, research, and service. Guided by the strategic planning process, colleges and support units have reallocated nearly $84 million since 1992. This represents more than 12 percent of departmental operating budgets. The budget plan for 2001-2002 includes further budget reductions of $3.4 million to help cover projected operating cost increases and for modest reinvestment in new faculty positions and other selected areas of critical need. This will be the tenth consecutive year that an internal budget reallocation process has been in effect. Administrative Streamlining Comparisons with similar universities show clearly that Penn State serves more students with fewer faculty. Benchmarking data also show that the University's administrative functions are among the most efficient when compared with peer institutions. Data show that Penn State has lower fund-raising costs, lower physical plant costs, and lower overall administrative costs than most of its peers. To continue and improve essential services, Penn State has adopted a strategy of re-engineering and process improvement to streamline its administrative operations. For example, Penn State's award-winning electronic approval system enables the University to eliminate hundreds of thousands of paper forms as well as the associated costs of mailing, copying and filing. Computer imaging has streamlined record keeping in employee applications, graduate admissions, student aid, and in our financial systems. Using the new Purchasing Card has consolidated payments and substantially reduced paperwork. About 6,900 purchasing cards have been issued to University employees for departmental purchases. Since the program began in October 1996, Penn State has processed nearly 650,000 purchasing card transactions. Another example is the Web-based admissions application. This year, 24 percent of undergraduate applicants and 12 percent of graduate applicants submitted their applications to Penn State via the Web. This is up significantly from last year. Continued dramatic increases in the use of the Web for student applications are anticipated in the next several years. eLion has become one of the nation's most comprehensive and user-friendly college advising and information modules that helps satisfy the guidance needs of thousands of University students. This on-line system assists students in making informed academic decisions. Students use eLion to check course availability, calculate their expected semester and cumulative grade point averages, audit their degree progress, and look up Penn State policies and procedures. Penn State's research program is one of the largest in the nation. To administer this program, which totaled $440.3 million in 1999-2000, the University has implemented an on-line system to follow research grants and contracts from the proposal stage to completion of the contract. Up-to-date information is now available to principal investigators and research administrators throughout the University. Finally, the University employs continuous quality improvement to enhance administrative services and to reduce costs. To date, approximately 400 CQI teams have identified ways to improve processes and increase customer satisfaction, saving millions of dollars for the University over the past few years. |
   |
| Next Page - Budget Plan and Appropriation Request |
| Return to Table of Contents |