RD405 - Cooperative Extension/Agricultural Experiment Station Division Annual Report of Actual Expenditures by Fund Source and Program 2010-11 - December 21, 2011


Executive Summary:
Item 219 B.2 of Chapter 890 of the Appropriation Act, requires the submission of an annual report of actual expenditures for the Cooperative Extension/Agricultural Experiment Station Division (CE/AES) to the Department of Planning and Budget, House Appropriations Committee, and Senate Finance Committee.

While this report is normally due on September 1, two sections of the 2011 Appropriation Act were in conflict this year requiring a delay in the submission of the report. Item 121.D.1. of the Act initiated a review of Virginia Cooperative Extension by the Secretary of Education. This evaluation included a determination of the “appropriate reporting requirements of the agency”. The annual report required by Item 219.B.2. could not be completed until the review of Agency 229 was complete and the new reporting format defined. Since the Secretary of Education recently completed this review in November 2011 and a new format for this annual reporting requirement has now been defined, the university is submitting the report in the new format as required.

The report summarizing the sources and uses of funds for the Cooperative Extension/Agricultural Experiment Station Division (Agency 229) for fiscal year 2010-11 is attached. The report arrays sources and uses according to the Commonwealth’s fund and program accounting structure. The total expenditures made directly by the localities in support of extension programs are also displayed. Consistent with the Commonwealth’s standards, the report is provided on a cash basis which reflects actual revenues and expenditures as of a point in time, in this case June 30, 2011.

It is important to note that fiscal year 2010-11 was an anomaly. The expenditures of Cooperative Extension were artificially and temporarily depressed in 2010-11 for several reasons. First, the delay in the required restructuring held up the filling of vacant positions while Cooperative Extension worked to develop a new strategy for hiring agents and associated support staff. Given Cooperative Extensions primary composition of personnel, this had significant implications. Second, pending reductions in state support were also a contributing factor. Cooperative Extension was preparing for $1M in reductions assigned specifically to Cooperative Extension for 2011-12, which required a slowdown of expenditures, before it learned of a new $1M allocation in late Spring of 2011. Additionally Agency 229 was also preparing for $3.454M of reductions to occur in 2011-12 through a slowdown in staffing and expenditures agency wide. Given that 2010-11 was a year which had one-time resources, one-time investments were made. Since one-time resources are not effective for expanding staffing in a sustainable manner, one-time resources were invested to address deferred maintenance, physical plant, equipment, and other one-time needs at ARECs to continue to position Agency 229 in a manner to best support Cooperative Extension and the agribusiness community in the future. Institutional support costs in 2010-11 reflect a timing issue; specifically, the final payment for 2009-10, all of 2010-11 and the first payment of 2011-12, these timing issues are settled in the university’s carryover process and will balance out over time. Restated, Institutional Support costs in 2011-12 will be reduced by the payment for 2011-12 made in 2010-11. None of these temporary anomalies result in a permanent reallocation of funds between programs. Assuming the Commonwealth’s economy continues to stabilize and state, federal, and local support is maintained, it is our expectation that Cooperative Extension expenditures will rebound in future years. A major push is currently well underway to hire additional extension agents (the agent count has already significantly increased), but because of the ongoing update of staffing plans and agreements with local governments, it is unlikely a full rebound will be complete in 2011-12. As a part of this, an additional reinvestment in training and professional development is planned beginning in 2011-12. Furthermore, a significant investment in technology for Cooperative Extension is planned that will include enhancement of video conference capabilities with district offices and provide additional technology to agents (e.g. smart phones) as productivity tools.

The Cooperative Extension/Agricultural Experiment Station Division Annual Report of Actual Expenditures by Fund Source and Program for 2010-11 is attached. The second page reconciles the information provided through the report to the Commonwealth’s Accounting and Reporting System (CARS) and compares it to the authorized appropriation.