UM Navigates Budgetary Planning in Time of COVID-19

June 29, 2020


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Dear UM Colleagues, 


I write today to share an update on our continued planning and response to the COVID-19 pandemic. Our plans for a return to in-person learning for the fall are well underway, and last week’s information sessions were an important step in developing our UM Healthy Fall 2020 plan.


Prior to COVID-19, we had made good progress in bringing our budget into balance. Academic affairs implemented instructional staffing plans to achieve a portion of our needed expense reductions, and strong efforts around recruitment and retention were having a positive effect. Unfortunately, COVID-19 has substantially disrupted our continued budgetary progress.


Like every university across the country, we are responding to severe economic impacts associated with COVID-19, both those that have already occurred, as well as those that are likely to occur this coming fiscal year. The ultimate impact of COVID-19 on our student enrollment, and the level of resources provided to the University from their attendance cannot be determined with precision, but are estimated to be substantially lower than in prior years. Already this year, we’ve experienced millions of dollars of COVID-19 financial impact from increased costs, canceled events, refunds from the spring semester for housing and dining, increased waivers provided to students enrolled in summer courses, reduced revenues in nearly all auxiliary operations and reduced endowment distributions to support the University’s operations. In April, President Bodnar shared these challenges with the campus in a note that announced temporary furloughs within auxiliary operations. Subsequently, other employees have been furloughed throughout our campus, including athletics.


In May, I sent guidance to our deans and executive leadership regarding FY2021 scenario planning. In that guidance, I asked each unit to work with fiscal personnel to identify the actions available to reduce general fund spending by 8, 11 and 14%. This exercise was not intended to set levels of across-the-board spending reductions, but rather to both identify our options and understand the severe consequences from reductions of such magnitude. 


We also have shared additional fiscal guidance for academic affairs and, specifically, with our deans to inform their planning for FY2021. Provost Jon Harbor provided each dean with a reduced spending target from which they will build their proposed budgets for the coming year. This was not an across-the-board reduction, rather differential targets were informed by the 8, 11, 14% scenarios, strategic considerations and the instructional staffing plans developed previously. Deans will be working to develop their FY2021 budgets and allocating their available resources strategically to best serve our students across the University. As we learn more about our projected enrollment to inform our plans, they will be revised and adapted to respond accordingly.


Within the next two weeks, managers in administrative, research and athletic sectors will receive FY2021 spending targets and build their budgets. At the same time, our fiscal managers are busy working to close out FY2020, after which, the budget for FY2021 will be loaded into our system and made available. As we continue our response to the challenges presented by the COVID-19 pandemic, our students and our campus community are foremost on our minds as we make decisions about how best to allocate resources across the University.


Paul Lasiter
Vice President for Operations and Finance
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