8P7 Assessing and Addressing Risk

Throughout the planning process, STI administration considers institutional risks and adjusts the budget accordingly. STI approaches every budget year with conservative estimates both in terms of revenue and expenses. Any major increases in budget allocations require support documentation and justification. This justification must include how the budget increase will help STI reach its strategic goals and how the increase will be funded. The President makes final decisions regarding the STI budget before it is presented to the STI Council. The STI Council reviews the budget in its entirety and makes any additional necessary adjustments. Once a budget has been adopted, the opportunity for a supplement can be addressed as need arises, but the change must be approved by the STI Council and the Sioux Falls School Board.

STI maintains at least 20% of its budget in reserves. Reserve funds may be utilized for emergency purposes. As part of a risk management process, the South Dakota Department of Education is increasing the technical institute maintenance and repair fund to cover emergency facility repair and maintenance issues.

As the Revenue Sources Chart 8.2 indicates, only 39% of revenue comes from federal and state funding. With the current economic climate, a significant portion of revenue must be generated from tuition and fees.