UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN FY 2012 BUDGET GUIDELINES

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1 UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN FY 2012 BUDGET GUIDELINES SALARY RATE INCREASES The general personnel salary program consists of a merit-based 3% increment, except where union settlements dictate otherwise. As a merit-based program, it is expected that there will be a range in salary increases within a unit. Details by employee category follow, and your budget letter contains the details of your allocations. As in the past, written justifications are required for 0% salary increase recommendations. Increases greater than 7% must now have the approval of the Provost and should be submitted along with completed budgets. Academic salary assignments of $90,000 or more must also have the approval of the Provost if they are new appointments or are meeting/exceeding this salary level for the first time (per Communication No. 3). In order to facilitate the processing of your budget, you should enclose a copy of the zero and seven percent report and the AP salary threshold report, along with justifications, to the Provost s Office when your budget is completed. Zero percent increases will be reviewed with Academic Human Resources prior to approval. With advance written approval from the Provost s Office, you will be allowed to reallocate additional funds for salary increases beyond those provided by the campus. Reallocations can only be used to the extent that your unit has available funding. Additionally, the unit must also have a salary deficit shown on the annual DMI salary analysis. Because the campus is required to track reallocations funding, units must provide reallocation totals to the campus (Michael Andrechak, Associate Provost). Faculty The competitiveness of faculty salaries has been, and continues to be, a major concern of the UIUC campus. Additional targeted funds (beyond 3% of base) are being allocated to colleges for strategic faculty salary needs. These additional funds (up to.5% of a college s filled faculty base) should be targeted to compression, market, equity and retention issues. The funds should be assigned to individuals in addition to normal participation in the 3% general salary program. It is expected that this additional pool of funds will generally be limited to no more than one-half of your faculty and staff and that the vast majority of these funds will be directed to faculty. Funds are also provided for faculty promotions. The campus amounts provided for promotions are $5,000 for promotion to associate professor and $10,000 to full professor. Since the intention of increasing the promotion supplement is to increase the salaries of promoted faculty, these additional funds are not intended to replace unit promotion supplements.

2 Academic Professional, Other Academic and Open Range Employees Units can allocate additional funds beyond the general salary program to address compression, merit, market and equity problems for this group of employees. It is expected that increases for open range employees, as a group, should match the increases for academic professionals. Units are to conduct performance appraisals for all academic staff and open-range members prior to recommending merit increases. Completed forms from the appraisals should be retained in the unit. Academic Employees The minimum salary for 12-month full-time academic staff remains at $28,556, pro-rated for FTE and service basis. Academic Human Resources (AHR) will monitor to ensure all academic staff are appointed in alignment with the minimum. Units should use the HR Salary Planner to submit the bulk of their academic salary increase recommendations. Academic Human Resources will manage the academic salary planner processes. Questions about using the HR Salary Planner for processing salary increases and reappointments should be directed to Cheryl Hahn, or AP employees who have been issued a notice of non-reappointment based on performance shortcomings should not receive a salary increase. AHR will monitor to ensure no increase is given in these situations. Employees who have been hired (new hire or new position) after March 1, 2011 or who received a significant pay increase effective March 1, 2011 or after will not generally be considered for an August 2011 increase, unless a prior commitment was made. Units should provide a justification for the requested August 2011 increase. Additional Information Concerning Open Range Employees Current salary minima will be increased by 3% and maxima will be increased by 3%. Salaries below the new minima must be raised accordingly. This adjustment is separate and apart from the merit increase program and will require no action on your part, but the necessary funding is a unit responsibility. For this group of employees, documentation for any individual increase of 0% or greater than 7% should be forwarded to the Office of the Provost for approval. Employees in a probationary period are not eligible for consideration for a merit increase until they have successfully completed their probationary period. Units are reminded to conduct performance appraisals for all Open Range employees prior to recommending merit increases. 2

3 Units should use the HR Salary Planner to submit their Open Range salary increase recommendations. Staff Human Resources will electronically retrieve the final Open Range increases from units. The deadline will be announced at a later date. Questions about using the HR Salary Planner for processing Open Range salary increases or about the Open Range salary program in general should be directed to Robbie Witt or Tonya Wagner Staff Human Resources, Collective Bargaining and Prevailing Wage Categories Salary increases for employees in these categories are governed by negotiated agreements and units must consult the appropriate collective bargaining agreement for details concerning salaries. Please contact the appropriate Human Resources office if you have questions about specific contract provisions. For questions about the Visiting Academic Professional or Graduate Employees Organization contracts, please contact Joe Bohn, Academic Human Resources, For questions related to civil service employees covered by a collective bargaining agreement, please contact Connie Foran As always, units are responsible for funding the costs of negotiated agreements. Visiting Academic Professionals The Visiting Academic Professionals (VAP) agreement expires on August 15, The campus is currently undertaking negotiations for a successor contract. Until an agreement is reached on a new contract, there can be no August 16, 2011 increases process for VAP s. Academic HR will monitor to ensure no VAP increases are given prior to a contract settlement. AHR will coordinate processing of any increases in accordance with the collective bargaining agreement once an agreement has been reached. As always, units are responsible for funding the costs of negotiated agreements. Graduate Assistants For graduate students we are allocating 3% on 95% of the salary base. The agreement with the GEO increases the minimum salary for a 50% nine month appointment to $14,820. In general, all assistants, regardless of GEO representation have the same salary program. Assistants continuing in a position must receive an increase of at least 3% over the stipends for the position in which they are continuing. Minimum salary ranges can be accessed at Wages There will be no increases provided on wages, subject to a limited number of exceptions. 3

4 PRICE INCREASES No general price increase funds are being provided in FY PROTECTION OF AFFIRMATIVE ACTION PROGRAM In implementing these Budget Guidelines, please remember the commitment of this campus to equal opportunity and affirmative action. Particular attention should be given to the question of equitable compensation for women and members of underrepresented minorities who are appointed to faculty, academic professional and staff positions. Only a continuing commitment to the goals of affirmative action will translate the opportunities provided by that mechanism into a reality. We continue to be concerned about salary equity between males and females. As you make salary decisions, please be sensitive to this issue. SUMMER SESSION Under Budget Reform, units do not receive a summer session allocation but generate summer budgets from the instructional units they generate in the summer. Summer allocations for FY12 are based on estimated summer 2011 undergraduate income and summer 2010 instructional units. In the fall, adjustments will be recorded to reflect summer 2011 instructional units and actual summer 2011 tuition earnings. FY 2012 BUDGET ASSESSMENTS Units are receiving a reduction of.2% of their State, Income Fund and ICR bases to fund the TOP/Dual career/faculty Excellence program, Medicare and Worker s Compensation increases, and system-level cost increases. In addition, units will be required to contribute.35% of their State, Income fund and ICR budget to common costs, including the restoration of the building maintenance and floor cleaning budgets. Units will also receive an assessment to fund the FY 2012 salary program (3%). Units generating undergraduate tuition will receive an offsetting allocation proportionate to the portion of a unit s budget funded by base rate tuition. Overhead units directly or indirectly supporting undergraduate education may also receive full or partial support for their salary program. Units will also receive a cash assessment equal to one percent of State, Income Fund and ICR bases. These funds will be used to fund certain critical infrastructure projects. It is likely that this assessment will continue for three years. The cash assessment will be collected in September. In the FY 2011 budget, we removed 50% of each unit s budget reduction target. The remaining 50% was removed in anticipation of FY 2012 budget reductions. Since our state appropriation was more favorable than anticipated, we will return most of these funds to 4

5 their former holding accounts within your units. These funds will remain sequestered and are not available for permanent assignment for use within your unit. Some portion of these funds may be released for cash use within your unit in FY It is unlikely that the released cash will exceed 25% of the sequestered funds. CONTROL OF FUNDS DURING FY 2012 As much flexibility will be given to units as possible. In developing the budget for State funds, units will be allowed to reallocate funds from one budget category (academic salaries, nonacademic salaries, wages, expense, and equipment) to another. Each major academic unit may have an "unassigned account" in which all funds for vacant academic positions, new allocations, or dollars generated through the reduction or elimination of programs by the college will reside until the relevant vice chancellors, deans and directors determine the utilization of the resources. Vice Chancellors, deans and directors will continue to control salary dollars related to academic leave lines. Units will retain control of all funds related to academic and civil service staff salary lines that become vacant during the year. Units are encouraged to give serious thought to infrastructure needs (wages, expense, or equipment) when deciding whether or how to replace personnel. Aside from the sequestered funds mentioned above, units have control of their budget. There will be no required cash set-aside this year. ALLOCATION OF ICR FUNDS Under Budget Reform, units received 82% of the incremental ICR that they earned. Beginning with the FY 2011 ICR Budget allocations, units no longer receive the addition of 52% of the indirect cost earnings increment (30% of the FY 2011 ICR was distributed to departments and colleges through the variable earning account mechanism during FY 2011). Ten percent of the ICR earnings increment is being allocated to the Vice Chancellor for Research. Unless another distribution formula has been approved for a given unit, the variable earnings portion of indirect cost recoveries are distributed as follows: 1) 5% to the College 2) 25% to the Department When earnings are adjusted at mid-year and year-end, we will remove any earnings associated with the F&A and tuition remission rate increase. The F&A rate increase is entirely the result of utilities cost and any earnings growth attributable to that rate change will be assigned to the utilities budget. The growth in remission earnings due to the rate change will be assigned to the student s college and department on quarterly basis. It is expected that at least 70% of the tuition remission provided in this manner will be passed on to academic departments and used to fund graduate education and support graduate 5

6 students. These funds can be used by units to fund partial fellowships required as student s salaries reach the NIH salary cap. The procedures to be followed in preparing the FY 2012 budget for earned programs are as follows: 1) An estimate of the variable earnings portion of the total indirect cost to be recovered during FY 2012 is to be made by the college and department and recorded as a revenue and expense budget in the appropriate C-FOP via the budget development application. (Please review current year recoveries as compared to the original FY 2011 budget, per the ICR Analysis Report distributed monthly, and adjust the FY 2012 budget accordingly for new or terminated awards.) 2) Do not include expected carry-over in the FY12 budget process. 3) The recorded budget for earnings will be reflected on the monthly statements. Budget adjustments will be made semi-annually to reflect the actual and projected recoveries for the year. 4) Since allocations of the variable earnings portion of ICR will be adjusted to reflect actual recoveries, units will not be either advantaged or disadvantaged by the level at which they set their earnings estimate. In the case of interdisciplinary programs, there may be some question as to the distribution of ICR funds. If the parties involved are unable to resolve a problem of this nature, they should consult the Office of the Provost. Please remember that no ICR funds should be budgeted or expended for the direct support of instructional programs. Instructional programs are those courses which are credit bearing and/or courses which lead to a credit-bearing degree. Additionally, ICR funds should not be expended in administrative units whose only activity is the support of instructional programs. While every effort will be made to accommodate the individual ICR carry-over requests of departments, the campus, as a whole, is limited to a carryover of 30% of the total ICR budget. Please work with the budget office of the Office of Business and Financial Services if you anticipate a large increase in your year-end balance. BUDGETING ENDOWMENT INCOME, FY 2012 Units receiving endowment income will be notified of the assigned FY 2012 budget excluding carry-over balances. The FY 2012 budgeted amount is based upon 4.0% of a six-year moving average of the endowment pool market value. 6

7 The income budgeted for FY 2012 is guaranteed; however, additions or withdrawals from the endowment pool made prior to June 30, 2011 will result in a budget adjustment. Over or under realizations of income at the end of FY 2012 will be charged or credited to the account which holds gains or losses from sales of securities. RESTRICTED FUNDS Restricted funds include all grants, contracts, self-supporting and auxiliary activities, storeroom and service departments, and other similar accounts, the use of which is restricted to specific purposes. Expenditures made from these funds are subject to the Board of Trustees general rules governing such expenditures and must be within the total income accruing in the account involved. It is the responsibility of department heads and similar officers to see that funds are available for all positions or other items listed under restricted fund accounts. Salary minima, union negotiations, and other University regulations governing appointments and the use of funds are applicable to restricted funds. Salary increase decisions for individuals funded with restricted funds are subject to the same guidelines as govern such decisions for individuals funded with State funds. CONCLUSION Questions concerning these Budget Guidelines should be addressed to Mike Andrechak ( ) or Pat Hoey ( ). 7

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