How UNC-Chapel Hill’s all-funds budget process fosters collaboration, integrates data-driven decision-making, and aligns unit priorities to strategically allocate resources for the upcoming fiscal year.
With a total budget for fiscal year 2024-25 of $4.2 billion, more than 30 campus units, and a total University enrollment of 32,438, the budget process at UNC-Chapel Hill is complex. Recognizing this, Finance and Operations has implemented an annual all-funds budget process that offers the University community the opportunity to plan strategically for investing Carolina’s financial resources.
A Collaborative Approach
Now heading into its fourth year, this process enables each unit on UNC-Chapel Hill’s large, decentralized campus to more easily communicate budget needs to the Budget and Data Analysis team, lessening units’ need to operate in isolation.
Lindsay Farling, associate vice chancellor for budget and data analysis, utilizes her expertise in financial analysis and her knowledge of the UNC System and state budgeting to enhance the University’s financial strategies and decision-making processes. She and her team are committed to supporting finance leads and units in creating a budget that helps strengthen their work.
What’s New This Year
This year, the budget process for fiscal year 2025-26 began in October, two weeks earlier than previous years. This enables the University’s base budget process to align with the state’s budget process. Farling explains the importance of ensuring that the base budget for the current year is reviewed and adjusted so that it provides an accurate starting point.
“The base budget process is essentially getting your best estimate for the current year set before you think about the next year,” she said. “We’re only a quarter into FY25 but it is our starting point for the FY26 budget. We want to make sure that we are aware of anything that has changed between now and when we developed the FY25 budget last spring.”
By incorporating these changes into the base budget, campus unit finance leads and the central budget office are able to utilize accurate numbers as a foundation for the new budget.
Chancellor Lee H. Roberts established four Chancellor Initiatives Working Groups over the summer of 2024 that reflect key areas of focus for the future of Carolina. These committees brought together University leaders, the Board of Trustees, faculty, staff and alumni to work together and build on our strategic plan, Carolina Next: Innovations for Public Good. These initiatives will also inform the budget priorities for fiscal year 2025-26: fiscal responsibility, campus renewal and expansion, return on investment (ROI) to the state, and empowering research excellence.
Refining the Process
After expansion budget requests are submitted in November, budget meetings will be held in December. These meetings — comprised of the dean or vice chancellor and the finance lead of each unit, along with Farling and other staff from the central budget team, Vice Chancellor of Finance and Operations Nate Knuffman, and the provost and chancellor as needed and available — allow decision-makers to learn about the priorities and needs of the units.
In January, discussion of requests and final budget decisions will be made, while final documents will be completed in February. Farling said that while this is not a new process, they are implementing some additional steps this year.
“We essentially have a revenue sharing approach in which the central University and the academic units have a formulaic way that they share in tuition and enrollment revenue,” she said. “In the past, academic units had their list of needs, but now their funding is going to be tied to the revenue they generate to the University.”
The goal is to align the priorities of the units and the central University so that the groups can work in harmony and not at cross purposes.
Supporting Campus Units
Tiffany Farina, associate dean for finance and business at the Gillings School of Global Public Health, believes the all-funds budget process will benefit her unit and her colleagues.
“I’m excited about having thought partners within campus finance who are looking at trends in our enrollment and helping us think through impacts to campus-based tuition, to school-based tuition, and to state appropriations,” she said. “It feels like we’re in this together.”
Farina, who served on the committee that helped evaluate the new campus funding model, said there are a host of benefits to having a well-thought-out budget.
“It allows us to have a plan and be strategic about where we invest our resources,” she said. “Knowing that I have a solid budget helps me make good decisions leading up to and throughout the fiscal year.”
Farling agrees and encourages fiscal managers to see the all-funds budget process as a helpful management tool.
“I think it’s really a missed opportunity if finance leaders are not having strategic conversations within their units about what they think their resources are going to look like next year, how they want to prioritize, and what are their strategic goals,” she said. “Units have a fair amount of flexibility in how they decide to use their resources. They don’t have to spend money the same way this year as they did last year.”
Farina said that for the first time in the history of Gillings, she can help department chairs and program managers think through the bottom line of potential changes with a higher degree of accuracy.
“Now when someone tells me, ‘I’m thinking about doubling enrollment’ or ‘I’m thinking about closing this program because of low enrollment,’ I can help them better understand the potential financial impacts,” said Farina.
Farina appreciates the broad discussions and regular communications that are part of the new process.
“It feels like a bit of the pressure is off. I have more time in this process and there are many more people who are looking at what we’re doing,” she said. “This is an exciting and a pivotal time in the University’s history to add this new financial tool to our tool chest.”
Looking Ahead
Vice Chancellor for Finance and Operations Nate Knuffman says this year’s process refinements mark an important milestone in the maturity of all-funds budgeting at Carolina and is hopeful the evolution of the process will be even more informative and impactful.
“When we first launched the all-funds budget process, our initial focus was on transparency and improving understanding of funding allocation, and I’m proud of the progress we have made in that regard,” said Knuffman. “As the process evolves and matures, and we enter the fourth year, we are starting to enable more thoughtful discussion beyond just resource allocation to metrics and discussions about performance, so we can better draw informative lines from allocations to success.”