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“I saved the college money! Isn’t that great?”
Sometimes, yes.
One of the key variables in determining whether it’s good or bad is the source of the money. Saving operating money is generally good; we can reallocate it to other areas that need it. It can even go into reserves, creating budgetary breathing room either for the next strategic move or the next emergency.
But leaving grant money unspent often doesn’t help. In the case of certain renewable grants, leaving this year’s money unspent means getting less money next year. From the grantor’s perspective, the idea is that if we didn’t spend it, then we obviously didn’t need it. This year’s frugality becomes next year’s austerity. “Use it or lose it” may not be the ideal system, but ignoring it isn’t a good idea.
The challenge is that we have two different logics operating with one set of procedures. Our purchasing processes are built on the assumption that saving money is good. We have strict rules about what has to go through a public bidding process, what requires an RFP and how early in the fiscal year we need to take delivery of certain items. That’s all in the name of being responsible stewards of taxpayer money, and at that level, it’s to the good. Applied to the operating budget, the processes (mostly) match the goal.
But those same safeguards and processes can make it hard to meet deadlines in “use it or lose it” grants. And mental habits formed under years of tight operating budgets often carry over into grants, where they’re actually self-defeating.
“Use it or lose it” has become especially difficult since the pandemic hit. Between shortages of component parts and the weird shipping delays we’ve all come to know, purchases that once would have shown up in a few weeks can now drag over multiple months. If they cross the boundary between fiscal years, that wreaks havoc with our grants accounting. The account is drawn down when the object arrives. If something ordered in March doesn’t show up until October, we effectively pay for it twice; we return the money from the fiscal year in which we ordered it—because it was technically unused—and then we pay for it in the fiscal year in which it arrives. When suppliers say things like “it’s backordered, and we don’t know how long it will be,” that doesn’t mesh well with “use it or lose it.”
The problem is that grantors have kept the rules established during more normal times. “Use it or lose it” is problematic in the best of times, but it does have the virtue of forcing prioritization. In these times, though, it can amount to punishment for supply chain issues that are utterly out of our control. We’ve increasingly had conversations with vendors of late trying to pin them down on delivery deadlines, even going so far as to cancel a few orders when they couldn’t confidently guarantee hitting our deadline.
I’d love to see grantors provide a little more flexibility on deadlines, especially while the supply chain issues are as pronounced as they are. If we’re going to adhere to the methodical processes put in place for the sake of transparency—and I’m on board with that—then we need deadlines based on that reality. And I need to keep explaining to folks on campus that sometimes, frugality works against us.
