So, what happens if a Department at the University has a certain amount of money budgeted for activity X, but it saves money on it? Say they have 500 bucks set out for it, and they end up spending only 350. What happens to the other 150 that's left over?

I heard a rumor that they zero their account, even if it means wasting all of the money, so that their funding won't be cut the next year. Is this true? Is this why there are tons of shit that seems a bit extravagant around campus?

8/3/2006 2:11:32 PM

I know for research, it just seems to disappear and no one cares. When I was a senior we did a project and received a few thousand from an outside source. Our project mentor put the money in some account and we got reimbursements from money we spent, but we did not use up the few thousand. We tried to get the mentor to tell us what happened to the rest of the dough, but he just said he'd check on it. My guess was that he used it on crack and hookers.

8/3/2006 2:18:59 PM

The extravagance you see on campus is mostly bonds that have to be used or foregone.

Now, the way University funding works is that they get some money for a certain project for a certain time. They may use it or divert it somewhere else.

Most of the times the PI has the freedom to use it anyway he/she seems fit.

8/3/2006 2:19:55 PM

Does this happen for departments as a whole, too? Why do I see gigantic, flat big screens everywhere?

8/3/2006 2:26:20 PM

If a department comes in under budget, then there's a good chance that the money they saved is deemed as "non necessary", so the next time they do the budget, that department gets less money for the next year. Hence why most departments love to buy stuff...the more they buy, the more money they get.

8/3/2006 2:44:55 PM

Quote :

"Does this happen for departments as a whole, too? Why do I see gigantic, flat big screens everywhere?"

You'll see lots of purchases near the end of the fiscal year. Usually the end of the fiscal year is June 30th and the cutoff for purchases is the end of May/beginning of June. I remember a lot of nice new chairs for the students in the CSC advising office ... it's not all bad.

Quote :

"Is this why there are tons of shit that seems a bit extravagant around campus?"

You take away the ability for departments to individually determine how funding needs to be allocated, you will NEVER see supplies/equipment prepared in a timely fashion.

If you want to change the way money is allocated in the department, you should speak to the department head and ask to be a student liaison. Then you get hold meetings, form commitees and gather the "voice" of the students in your department. I'll save you the trouble and say, while most students complain, none really care enough to take the time to do anything about it.

[Edited on August 3, 2006 at 5:10 PM. Reason : grammar ninja attack]

8/3/2006 5:10:05 PM

Unfortunately, this is standard operating procedure for most forms of government, McDanger. It's commonly referred to as use-it-or-lose-it methodology. As Perlith posted, prior to the end of the fiscal year, funds must be spent OR encumbered.

If a given department or other entity does not spend what was budgeted in a given fiscal year, those officials determining the budget will usually figure that the entity did not need that much money, and said officials will likely reduce the next year's budget by at least the unspent or unencumbered amount.

The type of situation that you described is one reason you often hear a certain term bandied about: zero-based budgeting. With this approach, all expenditures are justified each year--instead of just tacking on increases or decreases of the past year's budget by a percentage. Such an approach seems reasonable to me.

8/3/2006 7:59:21 PM