Shrinkage is a reduction to the University budget for salaries and fringe benefits
as a result of vacancies that occur throughout the fiscal year. It is a reduction
imposed by the state on general use funded budgets. The total budget required for
salaries and fringe benefits is reduced by a percentage factor as determined through
the appropriation process. Absent the shrinkage reduction, University departmental
budgets are funded fully for salary and fringe benefit requirements.
Shrinkage applicable to the individual departments are centralized according to their
respective college or division. Separate shrinkage accounts are established for each
college or division at the beginning of each fiscal year with the amount of budgeted
shrinkage. It is the responsibility of the budget review officer for each college
and division to prepare a plan that details how shrinkage will be covered through
unfilled positions.
Effective July 1 of each fiscal year, funds from all vacant positions will be removed
from departmental budgets by the University Budget Office and placed in the appropriate
shrinkage accounts. Additional funds will flow into and out of the shrinkage accounts
and departmental budgets in accordance with established employment, termination, and
change of status procedures on budgeted positions. A report detailing the status of
all University shrinkage accounts is provided to the president and vice presidents
monthly.
