Understanding 'all funds': Go behind the numbers with the university's CFO

This article is the first in a series of stories based on conversations with John Arnold, senior vice president, chief operating officer and chief financial officer, to provide information and clarity on the university's finances and operations.

Whether it's salaries, department funding or campus resources, the University of Arizona's budget impacts every employee. The university's budget encompasses approximately $3 billion in operating expenses, and the annual planning process that guides decisions on how funds and resources are allocated is called "all funds." The process influences department budgets, staffing decisions, available resources and long-term financial planning at the university.

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"The university is massive. We engage in so many impactful, distinct activities," said John Arnold, senior vice president, chief operating officer and chief financial offer. "With all of that work, it is important that we follow a diligent and collaborative budget planning process that generates the best outcomes for the university."

Arnold explained that "all funds" is more than just a financial exercise – it's about working toward long-term stability and prioritizing investments that align with the university's mission. 

Understanding all funds budgeting

"All funds" budgeting – named so because it includes all sources of operating funds in the university's official budget – is a comprehensive financial approach that shifts budgeting from simply tracking expenses to a broader focus on strategic planning with colleges and divisions.

"All funds is an opportunity for the provost and me to meet with each budget unit on campus to look at their financial performance and work through what resources they need for the upcoming fiscal year and make that fit into the university's overall financial plan," Arnold said.

So, what does it look like in practice? The "all funds" budgeting process unfolds over several months, beginning in the fall and continuing through the new fiscal year.

Mid-fall – Budget planning assumptions released

The process typically begins in late October or early November – when the university releases budget planning assumptions for the upcoming fiscal year. These assumptions are based on historical data, financial projections and trends. They serve as a tool to determine how money will be allocated, taking into account how each unit would be impacted if budget cuts or other financial adjustments were necessary. 

For fiscal year 2026, which begins July 1, 2025, units were instructed to submit a plan that includes impacts of a potential 3% budget reduction. Arnold explained this is a necessary exercise to close the budget deficit, emphasizing the university is not mandating across-the-board cuts. 

"We know there are areas at the university where we need to invest," Arnold said. "For example, where we've had student growth or where we're building out new programs that need appropriate resources to be successful."

January – Units refine budget proposals with the budget team

Once the unit budget proposals are in, the budget team consults with units as needed to address questions and clarify data.

"The university's budget team looks at each submission individually," Arnold said. "We review consistency in data and language, making sure we're comparing apples to apples across all budget units." 

Garth Perry, vice president of finance and chief budget officer, said the team will work with each unit to help manage the financial issues they are facing in the coming fiscal year. 

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"I think it's important that people know their leadership has a voice in the decision-making process," Perry said. "Each unit has a seat at the table, where they can directly discuss their financial future."

February/March – CFO and provost review budgets and meet with college, division and unit leaders

Earlier this month, Arnold and Ronald Marx, interim senior vice president for academic affairs and provost, began meeting with deans and vice presidents to discuss their goals and what it will take to achieve them.

Following the meetings, Arnold and Marx will review the budgets with university senior leaders, look at expected revenues and make decisions about where to invest.

"After these discussions, we can take a step back and prioritize across the institution," Arnold said. "We determine key funding needs, identify cost-saving opportunities and allocate resources efficiently to maintain our financial stability."

May, June and July – Initial budgets released with room for adjustments

Toward the end of the spring semester, the Office of Budget and Planning releases the Unrestricted Funds Operating Budget for colleges, divisions and units. This budget provides allocations and spending limits beginning with the start of the fiscal year on July 1.

Because the amounts of some funding sources – such as state funding and tuition revenue – are not known at the time projections are made, the university remains flexible throughout the year, Arnold said.

In June, the Arizona Board of Regents reviews and approves the university's annual operating budget. The budget team then distributes spending plans to each college, division and unit, which in turn allocate budgets to each of their departments and offices.

When the state of Arizona finalizes its budget – typically in May or early June– the allocation of state funds is reflected in the university's operating budget, which could lead to adjustments at the college, division or unit level.

"State funding plays a vital role in supporting the university," Arnold said. "We receive a substantial amount of general use dollars from the state to fund our overall academic mission, along with allocations for specific projects. Our goal is to be responsible stewards of every dollar we receive."

Throughout the year, college and division leaders can request adjustments, such as additional funding or increased spending flexibility, like using leftover funds for other areas. Perry, Arnold and Marx make decisions based on university priorities and may elevate urgent or large requests to the Office of the President.

Sustaining the university's financial health 

The university has made significant financial strides over the last year and remains on track to close the budget deficit and begin fiscal year 2026 with a positive outlook, Arnold said. This improvement comes despite the financial challenges of the last year and the potential impact of changes in the federal landscape, he said.

"We have taken a measured approach to achieving budget stability and we are optimistic about our future," Arnold said.

He also noted that financial markets have recognized the university's efforts to improve its operating environment and sustain long-term financial health. Although Moody's Ratings slightly downgraded the university's ratings this week, it revised the institution's outlook from negative to stable.

"Importantly, they affirmed our 'Aa' rating," Arnold said. "They noted our excellent brand and strategic positioning as the state's land-grant institution, including our solid student growth, $1 billion in research activity, strong gift support and increased financial support from the state."

Additionally, the university is moving forward with raises for most employees. In a Feb. 27 email from Arnold and Marx, they announced that salary increases would take effect in October, adding, "The University of Arizona has extraordinary employees, and our leadership team is united in our desire to make this an exceptional place for you to work."

Learn more

Employees can explore annual university budgets, college and division budgets, training materials and other resources on the university's Budget and Planning website.