Administration asks departments to reduce budgets

In December 2024, the president’s council asked deans and division chairs to examine and reduce their budgets. The notice followed the June 2024 budget implementation and a $1.4 million discrepancy identified in July.

Over the past several years, Augustana has used a predictive analytics model to estimate budgets under three scenarios: worse, base, and better. The “worse” scenario identifies financial pressure points, the “base” is standard, and the “better” allows for increased spending. In recent years, the Board of Trustees approved “base” budgets, but confidence in rising enrollment led the administration to push for an expanded “better” budget.

In April 2024, the Board of Trustees approved the “base” budget, allowing a month for review before reassessment. By June, President Stephanie Herseth Sandlin said the model still showed the budget in the “better” range.

In a June meeting of the Board of Trustees, the “better” budget was approved, and departments planned for the fall semester accordingly.

“At the end of July, things got shaky,” Herseth Sandlin said. 

In the summer of 2024, international students who had already put down deposits on Augustana couldn’t get visa approvals or visa appointments. In August, Herseth Sandlin said, administration knew they were going to be roughly 70 international students short of their projected estimate — which left the finalized budget short by roughly $1.4 million.

At the start of the 2024-2025 academic year, the president’s council informed faculty leaders they should plan to evaluate their budgets.

Deans and division chairs reached out to faculty in their areas last fall, tasking departments and programs with a budget greater than $50,000 to make three plans: cases in which their budgets would be reduced by 3%, 5% and 8%. Then the president’s council identified $800,000 to $900,000 in reductions that fall.

At the December 2024 Board of Trustees meeting, the president’s council was given instructions to balance the budget, requiring an additional $500,000 to $600,000 in reductions.

Shortly after, deans and division chairs were once again informed of the need to reevaluate their budgets. Simultaneously, administration eliminated some administrative and support staff positions.

“That’s wounding,” Herseth Sandlin said. “Those are true cuts, but the alternative is that we don’t have a balanced budget or we have to reduce everyone’s salaries.”

In humanities and natural sciences, departments with budgets over $50,000 that already made 5% cuts were asked to consider an additional 10%. Those with budgets between $25,000 and $50,000 were asked if a 15% reduction was possible.

Gubbels was glad departments and programs were given the opportunity to evaluate their own budgets to identify potential efficiencies.

Moving forward, the president’s council plans to be vigilant with the budget by performing quarterly forecasting and reporting monthly on the budget deficit, Herseth Sandlin said.

To reduce future error in the projected enrollment of international students, Herseth Sandlin said admissions will review international student applications sooner, meaning students can request visa appointments sooner.

Peter Folliard, dean of the School of Music and director of innovation, and Chief Financial Officer Shannan Nelson are working on a budgeting strategy that is based more on current information rather than prediction.

“The aspiration is that the Board of Trustees will approve salaries so that we can get contract letters out at the April board meeting, [and] there will be a special meeting of the board later in the summer when we can actually pair it up with anticipated enrollment and not just projected,” Folliard said.

Nelson did not respond to requests for comment. 

Divisions and schools responded to budget reductions by delaying major purchases and cutting costs where possible. For instance, Gubbels postponed lab equipment purchases and reduced teacher’s assistant jobs, and Folliard offset reductions to the School of Music through donor support.

Herseth Sandlin said the goal with budget reductions was to avoid scenarios that were student-facing. Ultimately, she wants to acknowledge and learn from the hardships.

“It’s a hard, arduous process, but it always illuminates opportunity, and people can then deepen their understanding of their own budgets,” Herseth Sandlin said.