Budget Basics

At its core, a budget is a way to compare the costs associated with specific activities to the income those activities are expected to generate. By creating a budget, an organization can assess its financial well-being, determining whether it will end a given period with a surplus (when income exceeds costs) or a deficit (when costs outweigh income).

In FY24, UC San Diego managed approximately XXXX in funding to support its mission of teaching, research, patient care, and public service. Maintaining financial stability is crucial for UC San Diego's operational health. This requires balancing total income with total expenses. Beyond tracking financial health, budgets at UC San Diego serve as tools to align institutional and divisional priorities, make the best use of available resources, and coordinate efforts toward achieving strategic objectives.

Explore the sections below to learn more about how UC San Diego approaches budgeting.

Scholarships and Fellowships: This category includes financial aid provided to undergraduate and graduate students to help them cover the costs of their education.

Supplies and Materials: This category includes consumables used in day-to-day campus activities, such as lab equipment, office supplies, and other essential materials.

Salaries and Wages: Higher education revolves around people, so the largest share of the campus budget is dedicated to paying faculty and staff. UC San Diego aims to offer competitive compensation to attract and retain top-tier professors and staff who contribute to the university’s mission.

Benefits and Retirement: Closely tied to salaries, employee benefits represent the second-largest area of spending. These include healthcare, retirement plans, and other forms of support provided to employees.

Utilities: Like the utility bills individuals pay at home, UC San Diego incurs costs for electricity, water, natural gas, and other resources needed to power and sustain campus operations. Research labs and other high-energy facilities contribute significantly to these expenses.

Depreciation, Amortization, and Interest: These expenses include loan payments for past capital projects and other financial activities. Depreciation and amortization refer to spreading the cost of an asset—like a building—over its expected useful life, with a portion of the cost recorded annually.

The Campus Budget Office (CBO) has responsibility and overview of the UC San Diego operating budget and the process by which funds are acquired, allocated and utilized.

The focus of the campus budget process is on core funds provided by the State or generated by the University. When combined, these funds account for approximately one-fourth of the total receipts for UC San Diego.

Academic Affairs receives a portion of these funds. The Academic Affairs Finance and Administration (AAFA) office takes responsibility for the distribution of these funds to schools and administrative units within Academic Affairs. 

Within AAFA, the Budget and Financial Unit is responsible for managing the Academic Affairs operating budget which includes the allocation of permanent and temporary funds from a variety of funding sources. In addition, this unit oversees budget planning and allocation processes including those associated with the Program Review Committee (PRC) and its various subcommittees.

Each year the Campus Budget Office (CBO) provides funding to the EVC to support Academic Affairs. From that allotment and various other funding sources, the Office of the EVC, through AAFA, distributes most of this funding to schools. Prior to 2014, there was no standard model by which this funding was distributed.

In 2014, the Divisional Support Model (DSM) was created to standardize the metrics by which resources are allocated to schools. The DSM model identified the general components needed to administer a department and/or school and the resource allocations were then determined by the actual variables per department/school. In the past, the DSM referred only to this school operation and administrative allocation model component. 

In the Fall 2023, the ASM was rolled out as a new concept to refer to the school allocation sub model (or DSM) plus the other six Academic Affairs allocation models for a total portfolio of seven models.  

• School Allocations (formerly Divisional Support Model or DSM) 

• Graduate Student Growth and Excellence Initiative (GSGEI),   

• Block Grant,   

• Masters Growth Incentive Program Model,   

• Temp FTE Allocation Model,  

• IDC  

• Teaching Assistant Allocation Model, and  

• Faculty Compensation. 

These seven allocation models distributed on the order of $507M in 2022/2023 among the schools, colleges, ORUs and administrative units of Academic Affairs. Some members noted that an increasingly important component of the academic mission – resources generated by summer session courses, are not explicitly included in the distribution of resources to Academic Affairs and its constituent schools.

The campus budget process typically takes place during the period of March through August. The CBO prepares the proposed resource allocation package and presents it to the Campus Budget Committee for consideration. After a review period, during which the vice chancellors consult with their respective financial officers, the committee makes its recommendations to the Chancellor for final approval. All information on incremental allocations to the campus are shared with the Campus Budget Committee and become part of the campus resource allocation package.

The campus budget process is an open process largely driven by long standing allocation methodologies developed and modified over time by consensus of all stakeholders. This approach provides a framework that facilitates long term planning. The vice chancellors receive their funding based on the campus models mentioned above. Each vice chancellor has his or her own process for distributing these funds to their divisions allowing maximum funding authority along with responsibility to follow applicable policies.