III.B.1. Annual Operating Budget

III.B.1.1. Policy

The College constructs, adopts, and administers its annual budget following all legal requirements. The budget adheres to requirements of the Texas Higher Education Coordinating Board and the Southern Association of Colleges and Schools Commission on Colleges.

III.B.1.2. Definitions

(a) Expenditure Target means the statewide median of expenditures per full-time student equivalent for all Texas community colleges according to the THECB, for the most recent year for which data is available, multiplied by the number of projected full-time student equivalents in the current budget year.

(b) Fiscal Year means September 1 through August 31.

(c) Property Tax Revenue means funds the College receives through ad valorem taxes levied on the assessed valuation of real and personal property in the College’s taxing jurisdiction.

(d) Rollback Tax Rate means the maximum ad valorem tax rate that the College may adopt without potentially facing a voter-petitioned rollback election as provided in Chapter 26 of the Texas Tax Code or its successor statute; under current law, this rate would raise approximately 108% of the tax revenue for operations that the College levied the year before, excluding tax revenue from new property.

(e) Student Revenue means funds the College collects for in-district tuition and all student fees except the out-of-district fee and out-of-state fee.

(f) THECB means the Texas Higher Education Coordinating Board. 

III.B.1.3. Budget Planning

Budget planning ensures that the College’s budget effectively reflects its goals, programs, and activities, and that the College has sufficient resources to implement and support them. The process seeks to achieve the following Budget Goals:

(a) Ensure sufficient resources to expend funds equal to the Expenditure Target.

(b) Equalize Property Tax Revenue and Student Revenue.

(c) If Property Tax Revenue is less than Student Revenue, include a proposed property tax rate that increases Property Tax Revenue, but this rate may not exceed the Rollback Tax Rate.

(d) If Student Revenue is less than Property Tax Revenue, include proposed tuition and fees that increase Student Revenue, but not by more than eight percent per credit hour above the tuition and fees charged during the most recent fiscal year.

III.B.1.4. Budget Schedule

The Chancellor or designee supervises the budget calendar development and the specific budget preparation plan, ensuring appropriate input from all College locations and levels of operation.

III.B.1.5. Budget Adoption

On or before September 1, the Board shall approve an itemized budget covering College operations for the fiscal year beginning September 1 of each year.

The adopted budget provides authority to expend funds for the purposes indicated and in accordance with state law, Board policy, and the College’s adopted purchasing procedures. The budget shall:

(a) Include general revenue, local funds, and estimated institutional funds;

(b) Include detail by department for current and prior year;

(c) Include a summary by functional categories for current and prior year;

(d) Include a summary of the instructional budget by college for the current and preceding year;

(e) Include a summary by amount and method of finance for each listed informational item in the General Appropriation Act;

(f) Be prepared within the limits of revenue available; and

(g) Include a statement as to whether the budget achieves the Budget Goals and a five-year forecast of adjustments required to achieve the Budget Goals.

The Chancellor or designee ensures that funds are expended in accordance with the adopted budget.

III.B.1.6. Public Hearing

The annual public hearing on the proposed budget follows the law, and has the following parameters under this policy:

(a) Before the hearing, the Board may establish time limits for speakers and may determine the number of speakers for group presentations;

(b) The Board Chair shall request at the beginning of the hearing that all persons desiring to speak should register in advance;

(c) Speakers shall confine their remarks to the appropriation of funds as contained in the proposed budget; and

(d) No officer or employee of the College shall be required to respond to questions from speakers at the hearing.

III.B.1.7. Budget Amendment by the Board

The Board may amend the adopted budget at any time during the fiscal year.

III.B.1.8. Budget Availability

After the proposed budget is presented to the Board, and before its adoption, a copy of the proposed budget will be available for inspection at the College’s administrative offices during regular business hours.

Copies of the budget shall be furnished to the THECB and Legislative Budget Board, with five additional copies retained for distribution to legislators upon request, and a copy shall be maintained in the College’s libraries.

III.B.1.9. Financial Reports and Statements

The Chancellor or designee will submit periodic financial and budget reports to the Board outlining budget progress at least at every regularly scheduled board meeting and the status of all College funds and accounts. These financial and budget progress reports indicate revenues and their sources, and expenditures and their classification for the period.

LSCS Policy Manual Section adopted by the Board of Trustees on September 6, 2018

III.B.2. Indirect Costs

III.B.2.1 Policy

The College renews and maintains a federal indirect cost rate in conformance with federal law.

III.B.2.2. Definition

(a)   Indirect costs means the expenses of doing business not readily identified with a particular grant, contract, project function, or activity, but necessary for the organization’s operations and activities. Examples of indirect costs are: (i) maintenance of shared facilities; (ii) depreciation of shared buildings and equipment; (iii) accounting services; (iv) human resources; (v) financial and accounting services; (vi) library and computing services; and (vii) utilities of shared facilities.

III.B.2.3. Charging Indirect Costs on Grants and Contracts

College personnel must seek the maximum indirect cost allowed by the funder for all grants and contracts. The Chancellor must approve any exception in writing.

LSCS Policy Manual Section adopted by the Board of Trustees on February 2, 2017