Town Hall looks at how belt-tightening, modernization impacts budget approach

October 15, 2019

UNIVERSITY PARK, Pa. — Upcoming changes to the University’s budgeting process, efforts at controlling costs, and the transition to a new integrated budget and accounting system were among the topics discussed at a Town Hall meeting with Penn State leaders on Oct. 15, focused on financial efficiency, transparency and modernization.

Penn State Executive Vice President and Provost Nick Jones hosted the meeting and was joined by David Gray, senior vice president for Finance and Business, and Mary Lou Ortiz, the University’s budget officer. The event took place in Kern Building at University Park and was livestreamed for community members at every Penn State campus to view.

The Town Hall provided an early opportunity for faculty and staff to learn and ask questions about a new budget approach and long-range strategies the University will implement over the next few years to more efficiently and transparently manage resources, create a more sustainable financial model, and keep tuition affordable for Pennsylvania residents.

“In a period of disruptive change across U.S. higher education, Penn State and other universities are challenged more than ever before to think strategically about their finances. Periods of rapid, transformational change require transformational responses,” Jones said. “Penn State is entering a new era in budget management, implementing financial tools and processes that will help the University continue to achieve its goals.”

Among the efforts underway, the University has been modernizing its core administrative systems over the past few years, including the transition to LionPATH in 2015, WorkLion in 2017, and upcoming implementation of SIMBA, a new online financial system to replace the current business information system, to go live on July 1, 2020.

SIMBA — the System for Integrated Management, Budgeting and Accounting — will offer better financial tracking, reporting, and forecasting and increase transparency, which is a desire of the public and University and Board of Trustees leadership, according to Ortiz.

“Enterprise systems of the past no longer align with Penn State’s complex nature and needs, and new technologies will put the University on a strong trajectory to be nimble and agile,” Ortiz said.

In addition to the work to implement SIMBA, Penn State reexamined how the budget is developed and managed. In 2018 Jones and Gray charged the Strategic Budget Task Force to look at Penn State’s current budget processes, benchmark best practices and explore financial tools. The task force recently released a report of nine recommendations to enable the University to streamline its budgeting approach.

Among the proposed changes are a shift — beginning in July 2020 — to a five-year budgeting cycle, elimination of “permanent” and “temporary” categories in the General Fund budget, and a move to a regular centralized budget review, among others, according to Ortiz.

Audience questions ranged from how unit budgets will be impacted to long-term planning and multi-year budgets.

In response to a question about whether fixed-term and standing positions would be impacted, Gray said as we make the shift in budget approach, we also should be making shifts in our human resources distinctions and move away from “fixed term” and “standing” positions, since in many cases fixed-term positions are renewed annually and the terminology can cause concern for some who hold those positions.

When asked about whether there will be another Voluntary Retirement Program offered in the future, Jones said “at this point there is nothing specific being contemplated, but whether or not there is, for perhaps obvious reasons we cannot talk about it in advance.”

The task force recommendations have been socialized among various groups and within the next few weeks the implementation working groups will develop timelines and processes to begin to put the budget recommendations into action.

“The change to a new budgeting format will touch every area of the University, as our goal is to help units and departments become more flexible, have better clarity and forecast long-term operational needs,” according to Ortiz.

The new budget process is one piece of a complex financial puzzle that also includes identifying cost-savings.

In response to a question about whether there will be budget cuts, Jones said there will be a 1% reduction across-the-board this year in current unit budgets. Ultimately, these efforts are driven by Penn State's longstanding commitment to providing an accessible and affordable education for students and families throughout the Commonwealth, Jones reiterated. 

Audience questions also focused on the progress of the Resources Optimization Initiative (ROI) and when results from that effort would be shared.

Gray said the 11 working groups under the ROI initiative are still in the midst of analyzing the information gathered, and that while progress and regular meetings are proceeding, no specific deadline has been set for implementing recommendations or changes.  

When asked if upcoming budgeting changes, combined with efforts to control costs by the ROI workstreams, would impact jobs, Gray said that difficult decisions will have to be made and, where warranted, there may be adjustments to the workforce.

“We know the question of how this will impact you is on your mind, and it’s on ours too. We will work to minimize the effect on our people, who are our single greatest resource. Our plan is to first look at freezing vacancies and leaving some positions unfilled,” Gray said. “Finding the 1% reduction is up to budget executives. All units should be thoughtful and selective about filling empty positions and look carefully at where dollars are being spent.

“Our employees are the best experts on their respective roles and have great insight into creative ways to find savings,” he said. “This is an opportunity to engage and contribute even in small ways, to leave no stone unturned. Everything adds up and each employee has an opportunity to play a contributing role.”

Examples for cost savings could include putting a hold on replacement hires; cutting back on meals, conferences and travel expenses; or taking advantage of Penn State’s buying power and economies of scale for purchasing. For example, in the IT space, direct and indirect savings have been made over the past few years by decommissioning and consolidating a multitude of firewalls and data centers, and transitioning to one University-wide email and calendaring system.

“Despite the challenges we face, we have kept tuition rates flat for Pennsylvania undergraduate students in three of the past five years. We know how important that achievement is. Without our students, there is no Penn State,” Jones said.

In addition, Jones also noted that admissions are strong, fundraising is robust, research dollars have grown to a record amount, new state-of-the-art facilities are set to open in the next few years, and the institution continues to receive good financial ratings.

“It’s absolutely essential we make these investments in new technologies, and Penn State is making every effort to make the transition to new systems and technologies as smooth as possible. We understand that any change is disruptive by nature and we are taking measures to communicate about these efforts clearly and often,” Gray said.

More information will be shared in the coming weeks and months, and closer to May and June 2020, training opportunities will be provided for staff and administrators with budgeting and financial roles and for those who will use SIMBA.

“We will work constructively with everyone throughout these changes,” Jones said. “Penn State is in a position of strength. We are transcending challenges and you are all helping to make that happen.”

Since 2015, Town Hall meetings have provided opportunities for members of the Penn State community to receive updates on University initiatives, hear from administrative leaders about key issues, ask questions and provide feedback. Archives of previous Town Halls and other related content are available at

Last Updated September 04, 2020