The Budget Cycle

            

Berkeley’s budget process is a continuous cycle of actions throughout the year that helps the campus, divisions, and departments evaluate their financial position, determine where they wish to go, and chart a path for how to get there.

Take a look at the information below to see how money circulates through our institution and how divisional budgets are developed.

How does money flow through our institution?

The flow of money through Berkeley begins with the campus’ central ledger, where tuition and fees, state appropriations, and other revenue are recorded and allocated to campus divisions on an annual basis.

In addition to this revenue, certain university-wide expenses are also recorded in the central ledger - for example, fees charged by UC’s Office of the President for programs that serve the entire UC system.

After these expenses are paid, money in the central ledger then flows out of it to the component parts of the campus. There are three major areas of the campus that receive this funding:

  • Berkeley’s academic divisions, which receive approximately $700 million annually;
  • The Office of the Vice Chancellor for Research, which receives approximately $60 million annually; and 
  • Central support divisions (Student Affairs, Equity & Inclusion, Finance, Capital Strategies, Administration), which receive approximately $500 million annually. Scholarships for students are distributed here and make up a large portion of this allocation.

Aside from the money they receive from the central ledger, the divisions that comprise these three groups also take in money from other sources at the local level. For instance, academic divisions supplement the funding they receive through the central ledger with additional income produced by their researchers’ contract and grant activity, through revenue-generating academic programs, and through philanthropy.

Central ledger funding flow to the component parts of the campus

How is money to allocated to each division?

The Executive Vice Chancellor and Provost leads the campus’ annual budget planning process, working with vice chancellors and deans to allocate funding from the central ledger in a way that best serves campus, division, and department priorities. While the EVCP office coordinates the process, divisions’ actual budget planning is done at the local level, giving deans and vice chancellors the flexibility and responsibility to generate revenue as well as make cuts where they deem most appropriate within their division.

Each year, the process goes like this:

December to January: Strategic Planning

  • The EVCP and CFO offices review the central ledger’s revenue and expense projections for the coming year, and based on those estimates they develop and share with each division its provisional multi-year budget targets.
  • At the same time, since strategy drives budget priorities, each division prepares a strategic plan for a three-year period. These plans identify a division’s goals, the actions needed to support those goals, and the resources required to achieve them.
  • During this process, the EVCP invites small groups of similar divisions - such as professional school deans - to discuss their strategic plans and cultivate ideas for cross-functional programming and collaboration. This can often lead to saving money by not duplicating efforts, or to new ideas for revenue generation.

February to March: Budget Preparation

  • With provisional budget targets in hand, the deans or vice chancellors of each division work with their staffs to determine how to meet their targets. A dean or vice chancellor can chose to meet targets through generation of new revenue or through cost reductions.

April: Divisional Budget Submission

  • Once divisional budgets have been finalized and submitted, the deans and vice chancellors of each division meet with the EVCP and CFO to discuss their plans and the challenges and opportunities their divisions face. They use customized divisional budget dashboards to guide their discussions.
  • When budgets are submitted to the EVCP and CFO, divisions’ revenue projections are also submitted to New Academic Ventures at Berkeley, a support function that assists academic divisions in the development of new programming.

May to June: Budget Finalization

  • Having gained perspective from their review of budget submissions and from their meetings with division leaders, the chancellor, EVCP, and CFO then make final decisions about budget allocations for each division. Finalized budget allocations are released to each dean and vice chancellor, who use those targets to refine budgets for each department within his or her division.
  • During this last step, the chancellor, EVCP, and CFO also make strategic funding decisions that reflect campus priorities. For example, last year the campus committed additional funds to sexual violence and sexual harassment prevention initiatives during this step in the process.

UC Berkeley's budget cycle