Starting July 1, the University will implement a new budget model that awards more money to schools and colleges.
The model, which also affects money going into financial aid and central administration, was created to help the University adjust to a lessened allowance from the state. The budget is for more than $300 million, does not include grants, contracts and donations, and does not contribute to auxiliaries such as University Housing or Athletics.
Under the new model, 28 percent of undergraduate students’ tuition goes toward the University’s general fund. The remaining 72 percent goes toward the schools and colleges and is divvied out based on a number of factors, including how many student credit hours are offered, how many majors are declared within the school or college and how many students graduate within the school or college. The tuition of students with double-majors will be split between the two colleges or schools, and tuition dollars from undeclared students will go to the College of Arts and Sciences.
The biggest beneficiaries of the budget model will be the College of Arts and Sciences, the Lundquist College of Business and the School of Journalism and Communication, because they boast the highest enrollment.
“It is important to understand that we are not changing the budget of the University, we are only changing the system by which that budget is allocated to different units,” Vice Provost for Budget and Planning Brad Shelton said in an e-mail. “The goal is to have a system where the campus academic leaders, such as deans, can understand the true fiscal impacts of the decisions they make and have incentives to make decisions that will benefit the University. We also want a system that is completely transparent. All of the academic units should know they are being treated by the same set of rules.”
The budget model is based on the responsibility-centered management model pioneered for universities by the University of Michigan.
Business school Dean Dennis Howard thinks the new budget model is the right model for the University. The model under which the University currently works is based on an antiquated formula, was unclear in where money for schools and colleges came from, and was also incrementally increased each year, which didn’t reflect a school or college’s enrollment.
“Before, (the old budget model) was kind of a black box,” Howard said. “We didn’t know where it all came from. Why I got $13 million (for the 2008-2009 academic year) is unknown to me. There was no rationale, no reason.”
However, with the new model, deans of the schools and colleges around campus understand exactly how much money to expect for the next year based on current numbers and conservative estimates for projections of how many students will take classes and declare majors.
“We can now actually plan and decide how many new classes to add, and what we can anticipate for increased revenues,” Howard said, adding that, under the new model, the business school will have a higher budget for next year and plans to expand its course offerings for pre-business required classes. “Now we can make rational decisions of how we invest our resources.”
The formula for graduate student tuition in the new model is also different. All graduate tuition will go directly to the school or college where the student is studying; for example, graduate students studying political science will have all of their tuition go to the College of Arts and Sciences. But because graduate teaching fellows do not pay for classes, money from non-GTF graduate tuition goes toward paying for a school or college’s GTFs.
Another notable aspect of the model is that it rewards schools and colleges for graduating students with more than $10,600 per graduate.
“There are huge incentives to make sure people get across the finish line,” Howard said. “This is what we’re all here for.”
[email protected]