A. Capital Planning and Budgeting

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A. Capital Planning and Budgeting

  1. State Delegation of Authority
    1. State law (RSA 187-A:16) delegates to the Board of Trustees "management and control of all the property and affairs of the University System of New Hampshire" and its institutions. State law prescribes procedures by which the Board of Trustees requests and secures State funding and borrowing authorization for the acquisition of real property and the construction, renovation, and repair of all facilities.
  2. Trustee and Financial Affairs Committee Authority
    1. The Board of Trustees, upon recommendation from the Financial Affairs Committee, retains sole responsibility for (a) approval of the biennial capital budget request submitted to the State of New Hampshire, (b) approval of 20-year campus master facilities plans, (c) approval of any external debt, including capital leases, associated with real property, and (d) all individual capital acquisitions, dispositions or projects valued at $10 million or greater. (See also, BOT IV.B, Internal Borrowing)
    2. The Board of Trustees delegates to its Financial Affairs Committee responsibility for all other capital planning and budget matters, including overseeing the development, coordination, implementation and monitoring of all long-range capital planning for USNH and its component institutions.
    3. The Financial Affairs Committee is responsible for overseeing the development and maintenance of capital planning and budgeting processes, approvals and monitoring mechanisms to (a) ensure that limited USNH financial resources are allocated to appropriate priority purposes, (b) ensure adequacy of proper funding sources prior to making capital commitments, (c) provide for proper upkeep of existing physical assets to address deferred maintenance and protect USNH's investment in the physical plant, (d) optimize benefits to all USNH institutions from common investments in information technology, (e) identify promptly projects that are behind schedule or over budget, and (f) promote efficiency, effectiveness, value and fairness with respect to the construction process.
    4. The Financial Affairs Committee will review a multiyear USNH comprehensive capital projects plan, updated at least semi-annually on a 'rolling' basis. The multiyear capital plan will identify all projects expected to cost $2 million or more planned within the next five years regardless of funding source and will articulate with the campuses' multiyear financial plans. To the extent that fundraising is listed as the funding source for projects on the capital projects plan, a multiyear fundraising forecast/plan will be provided by the campus at the same time. The purpose of the five-year capital projects plan is to engage the Financial Affairs Committee early in planning for major projects by campus, year and funding source to develop common USNH trustee and management understanding and support of priority capital needs and resources needed to fulfill those needs in advance of actual project submittal for approval.
    5. An annual capital budget, representing the first year of the multiyear capital projects plan, will be approved by the Financial Affairs Committee by the start of each fiscal year. The implications of the annual capital budget on the annual operating budget (such as use of cash and debt financing, expected restricted gifts, construction expenditures, depreciation, additional utilities and other operating costs, and additional revenues) will be reflected in the annual budget approved by the Board of Trustees.
    6. Educational and general and auxiliary plant renewal and adaption ("R&A") budgets are expected to be used for physical assets when there is an expected useful life of five years or more and will be for (a) major repairs or replacements of systems and components to extend the life and/or restore systems to their intended function, (b) projects required to incorporate or comply with externally imposed codes and requirements including life safety, building codes, ADA and environmental requirements, including abatement of hazardous materials and environmental cleanup, or (c) major projects that adapt buildings and campus infrastructure to meet the institution's evolving needs and standards, including those that incorporate new technology or support new faculty/staff, classroom changes, or changes in disciplines or curricula. Use of R&A budgeted amounts is allowable for campus master plans and similar studies. Use of R&A budgeted amounts for repayment of internal borrowing is allowable only if the purpose of the original borrowing was for a project that meets the definition of R&A. The use of R&A funds for construction to support new or expanded programmatic needs requires Financial Affairs Committee approval. Costs associated with operations and maintenance, acquisition of real property, or new movable equipment are ineligible to be charged to R&A budgets.
  3. Financial Affairs Committee Delegation of Authority to Chancellor
    1. The Financial Affairs Committee delegates to the Chancellor responsibility for developing, in consultation with the institutions, the format, timing, and content of the multiyear, comprehensive USNH capital projects plan. The capital projects plan will take into consideration the existing and future resources of each institution and USNH as a whole, and will prioritize and schedule major capital projects to ensure effective and efficient use of resources.
    2. The Chancellor, in consultation with the institutions, is responsible for developing the format, timing and content of regular periodic reporting of the extent of estimated deferred maintenance on each campus. At a minimum, the Financial Affairs Committee requires annual reporting of institutional amounts spent on physical plant renewal and adaption ("R&A") and estimated deferred maintenance metrics and trends of each campus using common measurements and format.
    3. The Chancellor, in consultation with the institutions, is responsible for developing detailed, USNH-wide plant spending definitions and budgeting mechanisms to ensure that minimum amounts intended by the Financial Affairs Committee to be devoted to addressing deferred maintenance are segregated and used for this purpose.
    4. The Chancellor is responsible for preparing periodic reports of existing construction projects in process for purposes of Financial Affairs Committee oversight.
    5. The Chancellor will coordinate the biennial capital appropriation request to the State based on prioritization criteria developed by the Administrative Board and prioritization direction provided by the Financial Affairs Committee. If capital appropriations are not received in the amounts or time periods as anticipated in the request, the Chancellor will recommend reprioritization of capital projects for consideration and approval of the Financial Affairs Committee. The Chancellor may also recommend that, in order to access state capital appropriation funds, an institution may need to fund a certain percentage of the total project cost from its own financial resources and meet certain targeted financial ratios.
  4. Financial Affairs Committee Delegation to Administrative Board
    1. The Financial Affairs Committee delegates to the Administrative Board responsibility for developing and applying criteria to be used to guide the prioritization of major capital projects at each institution and across the University System.
    2. The Financial Affairs Committee charges the Administrative Board with recommending for approval a periodic plan that maximizes shared information technology benefits and efficiencies across USNH, covering all major opportunities in shared services for IT infrastructure, information systems and services, and hardware/software acquisition. This plan will take into account the level of investment required and the ways in which the shared approaches could accommodate different institutional strategies.
  5. Financial Affairs Committee Delegation to Presidents
    1. Presidents shall have authority to approve capital construction and renovation projects up to the greater of (a) 3% of the most recent final audited institutional unrestricted financial resources ("UFR"; previously known as unrestricted net assets, or "UNA") with System wide balances allocated, or (b) $2 million. The initiation and implementation of all capital projects regardless of amount will follow sound internal controls, good business practices, and periodic reporting requirements developed by the Chancellor in consultation with the Administrative Board.
    2. Each institution will develop and maintain a comprehensive Campus Master Plan which will guide the institution's physical development for 20 or more years. The plan will address all aspects of the institution, including physical plant, real estate, changes in academic programs requiring additional space, and administrative structure and be presented and approved by the Financial Affairs Committee and the Board of Trustees at least every ten years. The Campus Master Plan will set forth the institution's real property holdings (including all leased real property) and the locations of streets, sidewalks, utility and service lines, buildings, athletic and recreational fields, etc. Real property owned by an institution but which is neither in the general vicinity of a campus nor directly used in an educational program shall be listed and described in the supplemental inventory section of the plan. Campus Master Plans will, as a minimum, indicate the approved or proposed development of any facilities or major renovation of existing facilities for which the campus foresees need during the succeeding 20 or more years.
This page last updated Wednesday, January 2, 2013. For information on the adoption and effective dates of policies please see explanation on the OLPM Main Menu.