1103 PR.02 University Budgeting: Out-of-Budget Requests and Approvals

Revision Date: 
June 28, 2023


1.     Overview

2.     Submitting a Request

3.     Reviewing the Request

4.     Communicating the Decision

5.     Actions Post Decision

1. Overview

This procedure exists to promote sound budgeting practices.  It describes and specifies the steps a Planning Unit financial leader is required to take in order to receive approval of an Out-of-Budget expense. 

A. What is an out of budget expense?

The annual operating budget is prepared in the late winter/spring by each planning unit of the university.  The annual operating budget is reviewed and approved by the Yale Corporation during the June Corporation meeting.  Once approved, the planning units are obligated to conduct monthly financial reviews in accordance with their approved budget for the July 1st to June 30th fiscal period.  During the course of the fiscal year, planning units may encounter changes in strategic initiatives, externally imposed mandates, etc. that may require a different set of expenses than initially included in the approved budget.  Planning units may internally reallocate existing budget amounts to meet the evolving needs of their organization.  If a planning unit is unable to cover new costs with existing budget resources, and/or is proposing any incremental full-time employees (“FTEs”) regardless of funding, the planning unit is required to complete and submit an Out-of-Budget request to the budget office. 

An Out-of-Budget request should be carefully considered prior to submission.  Have there been any new non-General Appropriations (“GA”) funds received since the original budget development that could be used to support cost on GA, thereby freeing up GA funds to support the unit’s emerging need?  Are there any budgeted positions and/or non-salary costs that could be suspended allowing the unit to cover FTEs and/or expenses for the new activity?

B. Exceptions to this procedure

If one or more of the points below apply to the activity under consideration, the activity is exempt from this procedure. If none of the points below apply to the activity under consideration, follow this procedure to submit the request and obtain proper approval before proceeding with the planned activity.

  • Sponsored research funded activity;
  • Faculty and Postdoc FTEs which coordinate with the Provost’s Office; and
  • Self-Support Schools – School of Medicine, School of Management, School of Nursing, School of Law, Yale School of the Environment, Jackson School of Global Affairs, and School of Divinity.  

2. Submitting a Request

The planning unit lead administrator should work with unit leaders to define the out of budget request.  Prior to submitting an Out-of-Budget request, unit leaders should evaluate all existing funding sources to determine if the activity can be funded internally.  Similarly, if an incremental FTE is being requested, units should be confident there are no budgeted positions that could be repurposed to support the new activity/initiative.  Lastly, the unit should have documentation on how the new activity/initiative supports the unit’s mission/strategic priorities and is critical to occur more immediately than the standard budget cycle.

With the above analysis being complete, the unit financial leader may prepare an Out-of-Budget request for consideration.  Using Form 1103 FR.02 University Budgeting: Out-of-Budget Request and any supplemental documentation necessary, address all the required items on the request form. Out-of-Budget requests may be submitted between July and December.  Requests arising after December should be included in the unit’s budget proposal for the following year.  Exceptions to this time frame may be discussed with the Assistant Vice President for Financial Planning & Analysis.

Submit the request via email to Lisa Merola-Grimm, lisa.merola@yale.edu, with a copy to the planning unit’s Budget Office analyst.

3. Reviewing the Request

Once submitted to the Budget Office, a complete request is submitted for consideration to Budget Strategy.  Budget Strategy typically meets weekly.  The Assistant Vice President for Financial Planning & Analysis adds the request to the Budget Strategy agenda in the earliest possible available agenda slot.  If the request is large or complicated, the planning unit leaders may be invited to join the Budget Strategy to review the request in detail.  Otherwise, the request is reviewed within the Budget Strategy meeting.

Budget Strategy reviews the request and renders a decision.  The decision may be one of the following:

  • Fully approve as requested;
  • Partially approve;
  • Deny; or
  • Defer decision and direct the planning unit to include the request in the next budget development cycle.

4. Communicating the Decision

When Budget Strategy makes a decision on the request, the Assistant Vice President for Financial Planning & Analysis, or delegate, sends an email to the lead administrator/requestor informing them of the decision.  Only Budget Strategy may approve an Out-of-budget request.  “Approvals” provided by any other individual/group are not considered an official approval and the request must follow this outlined procedure to go through the formal request process.

5. Actions Post Decision

After receiving confirmation of approval as described above, a planning unit may proceed with recruiting and/or procurement activity to support the activity as approved by Budget Strategy.  Incremental costs over budget should be included in the unit’s Q2 forecast cycle and/or the year end variance explanations as approved out of budget activity.  Approved activity should be included in the following year’s budget proposal and defined as an out of budget approval.  Items approved out of cycle do not need to be discussed during the planning unit’s budget presentation.