Dear Colleagues,
As you may be aware, Stony Brook has been actively working on the development and implementation of a New Economic Framework (NEF), designed to potentially replace our existing incremental budget model and establish a more sustainable and transparent financial budgeting process for our institution. This work has been underway since the fall of 2023, and we are looking forward to beginning a ‘parallel year’ during the next budget cycle (July 1, 2025, through June 30, 2026). During this time, our units will have the opportunity to observe both their current budget model, as well as a proposed model under the NEF for their individual areas. The NEF aims to provide VP Areas greater autonomy to manage their operations and potentially allow the university to invest more strategically, with improved alignment with the four priorities in our Strategic Plan. Please take a moment to review the progress we have been making on the BFP&A website.
Considering Changes to University Administrative Rates
As our teams continue to explore financial modeling to support the NEF, it has become increasingly clear that our current process of assessing university rates has led to inconsistencies in how we account for expenses, particularly personnel expenses, across funding sources. This has resulted in an incredibly labor-intensive, paperwork-heavy process for our staff to adjust these mismatches, potentially creating a significant audit risk for our institution and making reporting difficult.
To address this, the institution is considering changes to how SBU transacts payroll assessments and overhead among state-appropriated funding. Specifically, we are exploring the possibility of moving towards a Standardized Administrative Rate (we would call this StAR). The StAR would create a single rate that could be assigned to the following state-appropriated funding sources:
- Revenue offset or state purpose accounts
- General income fund reimbursable (IFR) accounts
- State University Tuition Reimbursable Accounts (SUTRA) in the Academic Enterprise
- The Dormitory payroll assessment is also being considered - the StAR program would potentially bring Dorm in line with the other self-sustaining funds like Hospital and Veterans Home
This proposed change would be tested during the FY 25/26 ‘parallel year’, at which time units will be able to preview what this change looks like for their area. We will be actively seeking your feedback during the ‘parallel year’ on the StAR, and will provide more details on how we’ll collect this feedback in the fall.
Potential Impacts of the StAR
Stony Brook’s effort to explore equivalency marks a significant strategic consideration, and aims to address current inconsistencies and inefficiencies in our existing processes. Some of the potential benefits this could bring to our institution as a whole are as follows:
- More accurate financial planning through budget to actuals alignment
- Increased transparency
- Simplified budget development
- Greater consistency and accuracy in budget development and modeling
- Maximization of IFR and SUTRA fund balances
- Alignment with methodology and best practices used at research institutions and our AAU peers
- Reduction in administrative burden on those responsible for developing and maintaining budgets and financial planning resulting from a reduction in transfers between funding sources (i.e., State to IFR)
- Removes barriers in using all of the above funds for payroll expense
We believe that exploring the incorporation of the StAR, as part of our continued development of the New Economic Framework, could potentially promote improved budgeting through a more equitable distribution of administrative costs. This approach would enhance transparency and flexibility across university funds, enabling units to align with the institution's economic realities. Ultimately, it would better support our strategic priorities and more accurately reflect our values as a comprehensive public flagship university, dedicated to teaching and research.
Join Us to Learn More
Our Sponsors, Senior Budget Officers, and the Office of Change Management will be reaching out to you soon to discuss these potential changes in greater detail. In the meantime, we invite you to visit our StAR microsite, which elaborates on this potential change in greater detail, lists FAQs and includes a feedback form.
As always, thank you for your continued support of Stony Brook University.
Sincerely,
The New Economic Framework and StAR Sponsors
Jed M. Shivers
Senior Vice President for Finance & Administration
Stony Brook University
Carl Lejuez
Provost and Executive Vice President
Stony Brook University
William A. Wertheim, MD, MBA
Executive Vice President
Stony Brook Medicine
