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Interview with a Campus CFO: What to Know About Budgets

A conversation about what international educators should understand about budget allocation, program proposals, navigating dips in revenue, and more.
Understanding the budget workings and processes on campus can help international educators get a realistic picture of their financial footing. Photo: Shutterstock
 

Amid a year of budget tightening, revenue shortfalls, and staff stretched thin, international offices are feeling the effects of decreased international student enrollment and the COVID-19 pandemic. In this environment, understanding the budget workings and processes on campus can help international educators get a realistic picture of their financial footing.

International Educator spoke with Lynne Schaefer, MBA, who has more than 30 years of experience in finance at higher education institutions. Schaefer is currently the vice president for finance and administration at the University of Maryland-Baltimore County (UMBC), where the international office maintains an exemplary working relationship with her office.

headshot of Lynne Schaefer
Lynne Schaefer, MBA

“Every day is different,” Schaefer says of her work, which includes overseeing all financial aspects of the university in addition to facilities, human resources, the campus police department, and auxiliary services. “We’re kind of invisible to most of the campus unless things are going badly. But that’s how it should be. We recognize that our role is to provide the foundation for the university to be successful—to make sure that everything works well, to make sure that people have the personnel and facilities and everything they need to be successful.”

Schaefer shares what international educators need to know about the budget process, who really makes decisions about competing priorities, common misconceptions about finance on campus, and more.

Listen to this interview on the March episode of the International Educator podcast.

 

What should international education leaders understand about what your job entails and what you are looking for in their budget proposals? 

It’s really important to understand that I don’t make the decisions on what to allocate funds to and what not to allocate funds to. What I do is evaluate proposals, share information, share perspectives, and share analysis with my colleagues. At UMBC, it happens to be a group of vice presidents and deans who are the management council for the university. That’s the group that makes the budget allocation decisions. 

I usually advise those who want to ask for funding that they need to connect whatever it is they’re proposing to the university’s mission, strategic plan, strategic goals, and objectives—that there has to be a reason. From 30 years in the business, [I’ve seen that] there are so many great ideas, because there are a lot of smart people who are very passionate about what they do. And there just aren’t enough resources to support all of those things. 

So how do you decide which of the many proposals that come up should be the ones that get funded? There are many ways to think about that. We have a saying at UMBC—“multiyear process”—so it’s very rare that we can do a big thing in one year. [Instead,] plan to phase something over a longer period of time. We have to think about what we need to do first. If we want to build a new program or expand on something that we think is important, and yet we don’t have the resources, then how do we get the resources? Maybe we invest in enrollment growth initiatives, fundraising, or other kinds of ways to generate resources to cover those things that are the long-term vision of priorities.

What does that look like in the current context of such an unprecedented year? How do you balance competing priorities at a time of decreased revenue and increased expenses? 

The first thing that we had to do was determine how we were going to allocate the budget reductions that we were facing, because the state cut our budget. We had to refund a lot of money to students who left in the middle of March [2020] for remote learning. That was, again, a decision from the management council that I talked about, the vice presidents and deans. We took a step back and said, “What are the things that we can do that won’t have an impact on our core mission, and can we cut there?” 

“I usually advise those who want to ask for funding that they need to connect whatever it is they’re proposing to the university’s mission, strategic plan, strategic goals, and objectives—that there has to be a reason.”

We cut things like a planned increase in facilities renewal [and] utilities. We stripped it to the bone and said, “Okay, we’re just going to have to tighten our belt on utilities and make sure we have savings there.”  We gave everybody time over the course of the year to figure out how to cut their budgets by doing a hiring freeze, and everybody at the highest levels of the university took a temporary salary reduction, those who made $100,000 and above. That’s what we did for this year. 

Thank goodness the governor’s budget for the coming year did not have an additional reduction for higher education. Right now we’re focusing on enrollment. That means not just attracting new students, even though that’s an important priority, but also making sure we’re giving good support to the students who are here—to keep them here and have them be successful in moving through their programs. So far I think that’s working pretty well.

What are some common misconceptions about budget and finances on campuses?

Here’s an interesting commonality across all of my years: the sense that there is a secret stash of money, if only you knew how to get a hold of it. You know it’s there, and they’re just holding it not for you. Not true. Our finances are an open book, so there’s no secret stash. That’s one of the misconceptions. 

Another misconception is that I control the money. Yes, we are responsible for bringing the money in, for accounting for it, for dispersing it. But decisions about allocation are not appropriately made by the CFO. It should be a consolidated leadership decision so everybody is on the same page. I’m not sure that it’s like that on every campus. On the campuses that I’ve been on, that’s been really important to me. 

What advice do you have for international offices to help them understand the big-picture budget for the institution and how best to work within that context?

It’s always beneficial to pay close attention to the budget messages that are shared with the campus. Get a good sense of where the campus stands on the overall budget and the different pieces of the budget. Tuition and fees, that’s where international students come into play, and also state appropriations for public institutions like us. For some private institutions, they need to be cognizant about what’s going on in the markets, where the investments of their endowment are returning support dollars to the campus. 

“Get a good sense of where the campus stands on the overall budget and the different pieces of the budget—tuition and fees, that’s where international students come into play.”

Depending on where the international office is—reporting to the provost, reporting to the president, wherever it is—ask good questions. Make sure you understand where you fit in the priorities and where there are opportunities to request additional support.

In the CFO role, how do you strike a balance between the financial and business aspects of higher education—and international education, in particular—with the elements that do not boost the bottom line?

I don’t think of higher education as a business, per se. I think about it as what is the most effective and efficient way that we can meet our mission. How do we allocate our resources to most effectively meet the mission? While I certainly agree that international students add tremendously to the character of a place, we don’t have extra money around to support those students. So we have to bring the resources in that help [internationalization] fit into the mission of the institution.

How can international offices tie their programs to institutional priorities in a way that might make it more likely for them to get budget approval? 

The very first thing you need to do is know what the priorities are. Then, think about how those relate to the broad functions of international offices. [It’s] recognizing that maybe the idea of what you’d like to do doesn’t necessarily match with the way the university is viewing the future, and then thinking about how you can fit in with those priorities. Understand the priorities, and match your thoughts with helping the university move its priorities forward.

“The very first thing you need to do is know what the priorities are. Then, think about how those relate to the broad functions of international offices.”

Many international offices create an international strategic plan that aligns with the university’s strategic plan, though it is often more programmatic than budgetary. Is that a successful starting point?

Definitely. [If] it is more programmatic than budget, but it helps to envision how the program fits in with the university’s budget, you can make the case for funding. I have this sense that for some period of time we are going to be very stretched on resources in higher education. So thinking about how international offices can help to generate resources and not overly use resources—however that might be able to align with this period where we’re going to be looking at [scant] resources.

What should the international office aim for when submitting budget proposals?

As I’m looking at budget proposals, the ones that make my eyebrows go up are the ones where they didn’t think through the implications, or they thought too big to start with, without any basis for justifying the request. Make sure that there’s clarity on what the outcomes will be and how the finances work—what it will cost, what it will generate, is there a net—and tying specifically to the university’s key strategic priorities. 

Maybe start small so that you can prove the concept. [Proposals] that are grandiose, I usually don’t take it seriously. Those that say, “Give us money because we’re really good”—can’t take that too seriously either, even though it’s true. Even though there are so many great ideas, there has to be purpose. There has to be sustainability.

At UMBC, what has the international office done well? Is there an example of a program they proposed and you said, “Yes, let’s do this”—and if you did, why?

One of the things that I thought was done very effectively [was] they proposed an international student fee to cover the cost of all the supports, all the special supports, they were giving to international students to make them successful once they got here. And they did that by talking with their students, getting support from their students, and comparing the fee that they were proposing to other very similar campuses. And not just a couple, but a bunch of other similar campuses. We could see that this was standard practice and the students were in support. David [Di Maria, the senior international officer at UMBC] had established trust long before this, so we knew that we could count on him to implement those services well. That was great. That allowed us to expand those services to our students, so that was wonderful. 

“I have this sense that for some period of time we are going to be very stretched on resources in higher education. So thinking about how international offices can help to generate resources and not overly use resources—however that might be able to align with this period where we’re going to be looking at [scant] resources.”

He also brought a proposal for—again, this is standard practice at a lot of places, but we hadn’t been doing it —a travel registry and travel insurance. The costs were very modest. He was able to present the downside of not having insurance or the registry and was able to tell numerous real stories about our folks and others that were in the news, [stories] that we all had heard about. And we said, “Oh my goddess, yes, we have to do that.” He hasn’t come with extravagant excess. It’s very measured, incremental. That does establish trust and confidence.

It sounds like you have beefed up your risk management and travel security and safety in the wake of the pandemic. What can the international office contribute to discussions about risk, particularly financial risk?

So many times, global events have an impact on higher education that some of us who are in the trenches don't even realize. It’s been very helpful to have David talking to us about what’s going on in the broader context, either immigration or travel restrictions or any of those sorts of things, because those have an impact on our enrollment. The risk associated with international events goes both ways. It’s risk to enrollment, it’s risk to our folks who might be abroad, and especially as we look to continue to expand on all those fronts—scholars and students and study abroad—we need to be on top of those things. 

As far as how international education has been affected by the pandemic, there has been a huge decrease in the number of international students and a subsequent decrease in international student tuition, which is particularly important at a public university. Study abroad, which is a self-sustaining, fee-funded unit, has also been hit hard. When programs came to a halt, there were significant refunds. What advice do you have for those offices to navigate these dips and plan for resuming operations? 

We have to learn from this experience. And knowing that something can happen that just cuts it off like that is a lesson—when you think about what that means for the future. As we’re reinstating study abroad, how do we do that in a way that protects the interest of the students? Over the past year and a half, we’ve put in a number of tools that help us to make sure we know where the students are, make sure that we can do something if something happens to them where they are, and get them taken care of and get them back here. We had a relatively modest international student population and student study abroad population [when COVID-19 hit], but even still, it was a little nerve-racking at best to figure out a way to get them home safely. 

“Balancing the risk with the potential reward is something that we have to think about together.”

For international student [enrollment], really understanding how quickly the environment can change leads us to think, “Okay, how do we balance the risk with the reward?” We definitely would like to have more international students at UMBC. And we were on course to do that in the fall, but of course that all fell apart, because our students couldn’t get out of their countries to come here. Being cognizant of that, and balancing the risk with the potential reward, is something that we have to think about together.

In higher education, people’s time is sometimes not seen as having an associated cost like in many other industries. For example, a meeting with five high-level managers about cost-cutting measures ends up not saving much money when you factor in each person’s hourly rate. How do you reconcile the cost of people’s time with the value such meetings bring?

One of the things that keeps me in higher education is the collaborative nature of our work. Long ago, I accepted that that meant meetings—many of them longer than maybe I would prefer, but it’s really important that everybody is on the same page. I think that it’s an investment in having a community that is all moving in the same direction, so I don’t really see any of it as a waste. I see it as an investment in the community.

What other advice do you have for international education leaders on campuses?

One piece of advice is to establish [your] work across campus. Make sure that you have good relationships with the bursar’s office, with financial aid, with the admissions office—undergrad and grad admissions—with the provost’s office, with the CFO. The people where it makes sense for you to be involved—student affairs and student life kinds of things. All of those are important to the success of international offices, and international offices can be important to the success of all of those. I believe that relationships make the world go round. Having a good solid network of people you trust and who trust you will help immensely moving forward.  •

About International Educator

International Educator is NAFSA’s flagship publication and has been published continually since 1990. As a record of the association and the field of international education, IE includes articles on a variety of topics, trends, and issues facing NAFSA members and their work. 

From in-depth features to interviews with thought leaders and columns tailored to NAFSA’s knowledge communities, IE provides must-read context and analysis to those working around the globe to advance international education and exchange.

About NAFSA

NAFSA: Association of International Educators is the world's largest nonprofit association dedicated to international education and exchange. NAFSA's 10,000 members are located at more than 3,500 institutions worldwide, in over 150 countries.