Over four years since the onset of the nationwide economic recession, Yale’s operating budget remains in recovery mode.

Newly appointed Provost Benjamin Polak said Monday that current budget projections indicate the University will face a roughly $40 million gap between expenses and revenues for the upcoming academic year. While Polak said in a Thursday email to faculty and staff that the budget for the fiscal year beginning July 1 will not require “across-the-board reductions,” he added that the University will likely have to draw on reserve funds and consider other one-time measures to close the deficit.

“The good news is that, relative to where we were at the beginning of the endowment collapse, things look completely different,” Polak said. “The bad news is that we haven’t closed the hole yet. We’re not in balance; we don’t have the resources to move forward with everything we want to do.”

The 2013-’14 academic year will mark the second year in a row since the financial crisis that Yale will not have to implement University-wide budget cuts, but Polak told the News that “we still need to be finding ways to save money here and there” to address the remnants of the $350 million deficit that emerged after Yale’s endowment lost $6.5 billion in fiscal year 2009.

In order to balance the budget for the 2013-’14 academic year, Yale will rely in part on the use of reserve funds, said Vice President of Finance and Business Operations Shauna King in a Monday email to the News. She said the University’s use of these “rainy day” accounts cannot be a permanent solution as the accounts in question can be depleted.

Polak said the University’s long-term goal is to have enough money to fund new initiatives in addition to eliminating the budget deficit.

“There are all kinds of exciting things we want to invest in,” Polak said. “Being at ‘minus 40 [million]’ is not where we want to be — we want to be at ‘plus something’ so we can move forward.”

Polak said he intends to maintain the policies that former Provost Peter Salovey, who will assume the Yale presidency on June 30, put in place to promote transparency in the budget planning process, including the use of faculty leadership on the University Budget Committee. He also said he believes many choices involving the budget should be made at the level of departments rather than the Provost’s Office, because decisions about whom to hire and which initiatives to fund should be made “by the people that are most informed.”

The past four years have been difficult for many departments, Polak said, as faculty hiring has largely stalled due to financial constraints. Polak said the University capped the size of the Faculty of Arts and Sciences at around 700 after the recession. Only a limited number of searches for new faculty have been authorized over the past few years, he said, and those searches have filled existing positions rather than allow for the creation of new ones.

He said restructuring the budget to bring hiring levels back to normal remains a challenging and long-term process.

The Yale Corporation will review the budget plan at its April meeting, and King said the finalized version will be approved in May.