L&S Summer Budget Model

This document explains the L&S Summer Term Budget Model. You may find the following documents helpful for your summer planning:

• Instructions for completing the Summer Budget Proposal: L&S Summer Budget Proposals 
• Guidance for selecting and scheduling summer courses: Summer Course Guidance in L&S 
• Guidance for summer sessions appointments: Guidance for Summer Sessions appointments in L&S 

Background of the L&S Summer Budget Model

Starting in summer 2016, UW-Madison adopted a new summer-term budget model intended to better serve student needs, expand summer enrollments, and make more efficient use of campus resources.This model provides departments with more flexibility to expand summer course offerings, and the potential to develop a new revenue stream. However, it also requires careful planning, with close attention to revenues and expenses. L&S may reject summer budget proposals in whole or part if departments lack adequate resources to cover potential losses.

Budget Model Definitions

• Paid Credits are credit hours associated with students who paid tuition to the campus tuition pool.
  • Student credits are regarded as paid credits regardless of factors that determined the amount of tuition paid, like residency status (in-state or out-of-state) or level (undergraduate, graduate, or special student).
  • Students in non-pooled programs (e.g., 131 capstone or masters programs) or who received full tuition waivers (e.g., graduate students with tuition remission, or students with veteran’s benefits) do not generate paid credits. 
  • Please consult the department’s Financial Report with Revenue from previous summers (available in Box). These reports shows both student credit hours (both paid and unpaid) as well as paid credits for each course taught.
• Revenue per paid credit is the fixed dollar amount that departments will receive for each paid credit. This college-wide amount is $300. This amount is pegged to the in-state tuition rate, and is unlikely to change unless in-state tuition changes.
• Actual costs are the expenses incurred by the department. These costs will be paid on fund 131, and so must include actual fringes on salaries. The proposal spreadsheet computes estimated fringes, which may be higher or lower than actual fringes.
• Department surplus is the net dollar amount earned by the department. Department surplus is equal to $300 per paid credit minus their actual costs.

Initial Summer Budget Proposals

L&S departments will complete a Summer Budget Proposal spreadsheet. The spreadsheet and its technical instructions are available on the Gateway: L&S Summer Budget Proposals

The call for proposals typically goes out in September with proposals due mid-October. The College will send approvals/responses to departments in November. 

The Summer Budget Proposal spreadsheet includes a Financial Summary, which shows an estimated departmental surplus based on the following formula:

• $300 * estimated paid credits minus estimated instructional costs

The Financial Summary page also shows the estimated contribution of each course to department surplus, along with the paid credits needed for the course to break even.  

While planning for the upcoming summer, departments should not review each course in isolation. Because elimination of one course might increase enrollment on the remaining courses, even courses that make a positive contribution to department surplus deserve scrutiny. However, courses that decrease department surplus require special attention. Departments will be permitted to run such courses as long as the department maintains a positive surplus overall and as long as the department has adequate funds to cover potential losses.

More guidance regarding course selection and scheduling is available on the Gateway: Summer Course Guidance in L&S

Preliminary enrollment & financial data

In mid-April, the College will distribute preliminary Financial Reports using early enrollment data on Student Credit Hours (SCH). Based on past experience, we anticipate that preliminary mid-April SCH may be 10% to 15% higher than final end-of-summer paid credits (due to tuition waivers and students dropping courses throughout the summer). Thus, the preliminary Financial Report is likely to overestimate the surplus generated by individual courses and the department overall. We encourage you to compare your preliminary 2020 Financial Report with your final 2020 Financial Report with Revenue to see this effect for yourself; both reports are available in Box. While mid-April SCH data is problematic, we need to provide students with adequate notice of summer course cancellation. We thus use the preliminary Financial Reports for this purpose, imposing a 10% correction for the anticipated decline in credits.

Once the preliminary Financial Reports are distributed, James Montgomery will consult with the divisional associate deans, and then contact departments to discuss any projected losses. In general, as long as the department’s overall surplus is projected to be positive, decisions about course cancellation will delegated to the department, which may decide to run courses as planned or cancel courses to avoid financial losses. If the department’s overall surplus is negative, the College will ask the department for a plan to address anticipated losses. Beyond course cancellation, the department may consider reducing or eliminating fixed costs (e.g., some or all of the summer chair’s salary), shifting costs to non-summer (e.g., gift) funds, or confirming that losses will covered by the collateral source identified in the department’s proposal (thus allowing the course to be taught as originally planned). The department’s plan is subject to College approval, and the College may cancel courses (and eliminate other costs) if the department plan is unacceptable.

Even in cases where decisions are delegated, departments should promptly inform the College of any course cancellation. Once teaching plans have been finalized, departments will receive revised initial Financial Reports reflecting any change in courses, instructors, or expenses.

While this cancellation policy is intended to help departments avoid losses, it does not eliminate all risk. The mid-summer decline in credits may exceed 10% in some departments. More generally, this policy should not be viewed as a substitute for careful advanced planning. Cancellations may create significant problems for students who have formed summer plans based on the courses they expected to take. In the long run, substantial numbers of cancellations may undermine student interest in summer term. Courses likely to be poorly enrolled and ultimately cancelled should not be proposed in the first place.

Related policy: L&S Course and Class Section Cancellation Policy

Revenue Reporting

The College will distribute final Financial Reports with Revenue in late August/early September each year. This report shows actual instructional costs charged to departmental summer 131-A48##93 accounts, enrollments, student credit hours, paid credits, and department surplus. Costs may ultimately be higher (and departmental surplus lower) if some costs have not posted to WISER at the time of the report.

The L&S Budget Office will post summer revenue to the 131-A48##93 accounts in early October. The end-of-October balance in the 131-A9348## account reflects the department’s summer surplus. In November, the L&S Budget office will transfer any balances from the 131-A9348## accounts to departmental 131-A48##07 accounts. Once the November transfer has been made, the 131-A9348## accounts will have zero balances, and should not be used again until next summer.

Summer Materials & Box

Departmental materials are available in Box. Folder name = '48-#### Summer Sessions'. Department chairs/directors and managers have access to this folder, and will need to distribute these materials to their appropriate staff.

Documents sent via Box

• Initial approval from L&S: Distributed by L&S in November.
  • Expense Details: This report contains specific details for instructors, student appointments, and supplies & expenses. This will be updated as changes occur based on hiring, enrollment, etc. This document should be shared with whomever is responsible for payroll/HR tasks in your department.
  • Initial Financial Report: This report compares estimated costs vs. the department’s paid enrollment estimates. Similar to the Expense Details report, this report may be updated during the academic year as changes occur.
• Preliminary Financial Report: This is an updated version of the initial Financial Report, which compares estimated costs vs. enrollment figures from mid-April.
• Financial Report with Revenue: This is the final document for summer, which shows actual costs and paid credit information. This is typically distributed in late August/early September each year.

Primary Contacts for L&S Administration

• James Montgomery, Associate Dean for Fiscal Initiatives (backup: Shirin Malekpour Associate Dean for Teaching & Learning)
• Amanda Mahr, Instructional Planning Coordinator

See Also:

• Memorandum of Agreement in Summer Term
• L&S Summer Budget Proposals
• Summer Accounting in L&S
• Guidance for Summer Sessions appointments in L&S
• L&S Course and Class Section Cancellation Policy