Are operating budgets developed from a “bottom-up” approach or “top down approach”?
The term “bottom-up” implies that each year budgeting starts from zero and units must justify every dollar requested; “top-down” implies that central leadership sets budgets for all units. At WFU we use a combined approach. In the Fall of each year, all deans and VPs review salary and program needs (existing and new). These needs are reviewed with WFU leadership to prioritize alignment with the strategic plan and funding availability. Due to funding limitations, multiple iterations of these proposals are required, and final recommendations to the WFU Board of Trustees (BOT) are not completed until March. The BOT votes on these budget adjustments at the April meeting; the changes are then loaded into the budget templates and rolled out to the end user departments. Each template contains a “set” total budget for the department that reflects any approved overall budget revisions; the department is able to shift the budget among expense lines but cannot exceed the total authorized budget.
Related Questions
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- Are operating budgets developed from a "bottom-up" approach or "top down approach"?
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