TOWARDS A SUSTAINABLE A CADEMIC A FFAIRS BUDGET MODEL University - - PowerPoint PPT Presentation

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 1

TOWARDS A SUSTAINABLE ACADEMIC AFFAIRS

BUDGET MODEL

University Budget Committee September 16, 2016

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 2

CONTENTS

1. THE STRATEGIC ALIGNMENT MODEL 2. THE STRATEGIC ALIGNMENT MODEL: ADDITIONAL RESOURCES 3. THE RESOURCE ALLOCATION PROCESS 4. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL I 5. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL II 6. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL III 7. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL IV 8. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL V 9. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL VI

• 10. REBUILDING THE AA RESOURCE ALLOCATIONS PROCESS: DETAIL VII
• 11. QUESTIONS AND ANSWER SEGMENT
• 12. THANK YOU!

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 3

THE STRATEGIC ALIGNMENT MODEL

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 4

THE STRATEGIC ALIGNMENT MODEL: ADDITIONAL RESOURCES

CSU Access to Excellence:

http://www.calstate.edu/accesstoexcellence/

CSU Reporting Transparency:

http://www.calstate.edu/transparency/

CSU Graduation Initiative:

https://www2.calstate.edu/csu-system/why-the-csu-matters/pages/graduation-initiative-2025.aspx

CSU, Chico Strategic Plan:

http://www.csuchico.edu/vpaa/documents/strategic_plan_2016.pdf

CSU, Chico Strategic Plan Report Card:

http://www.csuchico.edu/vpaa/planning/docs/pdf/univ_annual_report_card.pdf

CSU, Chico Academic Plan:

http://www.csuchico.edu/vpaa/documents/academic_plan_2015-2020.pdf

College Strategic Plans:

AGR: http://www.csuchico.edu/ag/about/mission.shtml BSS: http://www.csuchico.edu/bss/about/strategic-goals.shtml BUS: http://www.csuchico.edu/cob/about/strategic-plan/strategic-plan.pdf CME: http://www.csuchico.edu/cme/about/strategic.shtml ECC: http://www.csuchico.edu/ecc/about/mission.shtml HFA: http://www.csuchico.edu/hfa/about/index.shtml NSC: http://www.csuchico.edu/nsci/about/mission-of-college.shtml

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 5

Academic Support Units Strategic Plans:

ACAD SEN: http://www.csuchico.edu/fs/who/index.shtml FAAF: http://www.csuchico.edu/faaf/about-faaf/mission-statement.shtml GRAD: http://www.csuchico.edu/graduatestudies/about-us/index.shtml IRES: http://www.csuchico.edu/ires/plans/documents/strategicPlans/IT%20Strategic%20Plan%202012-2018.pdf ISD: http://www.csuchico.edu/sustainablefuture/documents/GreenBook__2015_Final.pdf LADO: http://www.csuchico.edu/library/libadmin/aboutmore.html OIED: http://www.csuchico.edu/international/ RCE: http://rce.csuchico.edu/ RESP: http://www.csuchico.edu/resp/index.shtml UED: http://www.csuchico.edu/ued/

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 6

THE RESOURCE ALLOCATION PROCESS

From To Allocation Further Information

Legislators CSU CSU Support Budget / Governor’s Budget – HE Section

http://www.calstate.edu/budget/fybudget/2016-2017/executive- summary/ http://gov.ca.gov/news.php?id=17888

CSU CSU, Chico Budget Allocations: Mandated Cost; Compensation; Others; FTES Growth @ Marginal Cost of Instruction

http://www.calstate.edu/Budget/ http://blogs.calstate.edu/budgetcentral/

CSU, Chico Academic Affairs Strategic ‘Off-the-Top’ : Traditional Percentage, AA around 72%

http://www.csuchico.edu/bud/budgetplans/index.shtml http://www.csuchico.edu/fs/committee_list/ubc.shtml

Academic Affairs Colleges / Units Budget allocations informed by Unit Plans and ABC-DE Annualized FTES Funding Model

http://www.csuchico.edu/vpaa/planning/resourceallocation/index.shtml

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 7

REBUILDING THE AA RESOURCE ALLOCATION PROCESS: DETAIL I

INITIALIZING PHASE: CONSULTATION WITH AA UNITS CHALLENGES FACING AA UNITS

• 1. Our unit / college continues to be underfunded.
• 2. This underfunding is particularly noticeable in funding

instruction, faculty and staff development, maintenance of equipment and facilities, funding student support systems, funding growth in enrollment, and funding faculty and staff recruitment and retention.

• 3. Recognize the complexity of AA unit / University budget.

There are the challenges of managing different income streams and the accounting for the uses of all (total) sources.

• 4. Increasing costs of programs X, Y, Z.
• 5. Understand the ABC/DE model but suggest the need to review

its underlying assumptions to make sure they reflect new realities.

• 6. Timing of AA allocations to its units. The earlier the allocation,

the greater the opportunity for planning and consultation with units.

• 7. The development and execution of the Equity Plan has

created a lot of frustration.

• 8. Return, in part, to an enrollment-based funding model. We

need a sustainable budget model.

PERCEIVED AREAS FOR IMPROVEMENT

• 1. Future allocation models should reflect both an historic and a

future orientation. We need a funding model that is based on a realistic portrayal of costs. And we need a strategic component that addresses unique (future) opportunities that will enhance

• ur portfolio of distinctive programs.
• 2. Review and reconsider the allocation of scarce academic

resources: AWTUs, CCFs, SLF, CERF dollars, grants/contracts funds and interdivisional transfer of funds

• 3. Tracking expenditures to ensure appropriate and effective use of

all sources.

• 4. Improve budget transparency at both university and divisional
• levels. Share best practices? Hold meetings with AA/Ss.
• 5. Eliminate uncertainty about carry-forwards.
• 6. Continue work on inefficiencies (curriculum and administration)

and improve effectiveness.

• 7. Improve interactions with HR and clearly identify decision

authority versus service / consultancy.

• 8. Explore / define the role of external funds in the operations of

the University.

• 9. Overall: Return to sufficiency, consistency and predictability.

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 8

REBUILDING THE AA RESOURCE ALLOCATION PROCESS: DETAIL II

SUSTAINABLE BUDGET DEVELOPMENT PROCESS

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 9

REBUILDING THE AA RESOURCE ALLOCATION PROCESS: DETAIL III

TOWARDS PRINCIPLES OF A NEW SUSTAINABLE BUDGET MODEL

The following principles begin to articulate the framework for a new, sustainable budget allocation model for colleges within the Division of Academic Affairs:

• 1. Look beyond the division’s historical budget methodology.
• 2. Budget allocations shall be aligned with the priorities of the University and AA Strategic Plans.
• 3. Budget allocations shall incentivize units to reduce time-to-degree and achieve high rates of degree

completion.

• 4. The budget processes and practices shall provide units with maximum flexibility to address their highest

priorities, leverage the heterogeneity of the subunits, and ensure the division has a subsidiary role to support its units and programs.

• 5. The budget processes and practices shall take advantage of all possible options to advance the university’s

financial position, consistent with the university’s mission.

• 6. The allocation model recognizes that all units / programs must have a critical mass of size and resources to

adequately serve their mission effectively.

• 7. The allocation model shall grow enrollment appropriately to the extent that there are adequate resources

available to support student achievement, success, and graduation.

• 8. The allocation model shall encourage units to recognize and seek additional funding from non-state sources

such as philanthropy, third-party partnerships, auxiliaries, enterprises, grants, contracts, and other activities.

• 9. Any changes to the allocation methodology shall be phased-in so that units’ base budgets are not

significantly reduced. 10. The new model shall minimize dramatic swings in resource allocation from year-to-year, be predictable, transparent, and allow campuses to engage in longer-term planning. 11. The allocation model shall be reviewed every three years.

*Modeled after Principles for a New Sustainable Financial Budget Model for the California State University http://www.calstate.edu/financial-future/phases/

Draft Draft Draft

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 10

REBUILDING THE AA RESOURCE ALLOCATION PROCESS: DETAIL IV

ANALYSIS OF ACTUAL EXPENDITURES

To begin to address the concerns, challenges and desired improvements in the allocation process, data were collected on:

• FTES production by college and by department
• Number of majors served
• Number of graduates
• Faculty expenditures by college, by appointment and by rank
• FTES production by tenure-track and part-time faculty
• Expenditures per FTES of instruction in GE, LD, UD, and GRAD by college
• Expenditures per FTES of instruction in laboratories and activity sections
• Per FTES allocation matrix
• Expenditures for dean offices: absolute and per FTES
• Expenditures for departmental offices: absolute and per FTES
• Administrative costs per FTES
• Special Needs expenditures by college
• Longitudinal analysis of base allocations and expenditures by college
• Longitudinal analysis of one-time allocations and expenditures by college
• Comparative analyses of proposed configurations of allocation model
• Comparison to 2016-2017 Marginal Cost of Enrollment
• Comparison to Higher Education Consortia: The Delaware Cost Study

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 11

REBUILDING THE AA RESOURCE ALLOCATION PROCESS: DETAIL IV

MODEL DEVELOPMENT AND TESTING

Instruction

• Average instructional costs in categories: General Education, Lower Division, Upper Division and Graduate
• Average differential costs for lecture, laboratory and activities sections
• Recognition of extra costs associated with Writing Intensive and Capstone courses
• Possible use of Delaware consortium data to adjust instructional costs

Administrative and Academic Support

• Funding of appropriate dean office configuration
• Funding of appropriate departmental administrative configuration
• Funding for instructional equipment per CSU
• Funding for serving the ‘major’
• Funding for reducing time-to-degree and achieving high rates of degree completion
• ‘Special Needs’ recognizing the special instructional requirements (not covered in instructional costs) of selected disciplines /

majors

• ‘Investments in the Future’ focus on future growth opportunities

Labor Cost Adjustments

• Base compensation adjustments 2015-16
• Base compensation adjustments 2016-17
• Other base adjustments 2016-17

Model Initialization and Cost Drivers

• The proposed model will use CSU Chico’s 2016-17 annualized FTES target of 16,006 to compute base allocations to the colleges
• FTES target allocation to colleges is based on prior year FTES contribution and college capacity
• The cost drivers proposed in the model are FTES, # of majors and # of graduates

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 12

REBUILDING THE AA RESOURCE ALLOCATION PROCESS: DETAIL V

ADOPTION PHASE: 2016 – 2017 ALLOCATIONS

2016 – 2017 final allocations to the colleges will be INFORMED by simulations of the new resource allocation model

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 13

THE RESOURCE ALLOCATION PROCESS: DETAIL VI

ACADEMIC AFFAIRS TO AA UNITS: PRELIMINARY PLAN

http://www.csuchico.edu/vpaa/planning/resourceallocation/index.shtml

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 14

THE RESOURCE ALLOCATION PROCESS: DETAIL VII WORKING WITH THE DEAN’S / UNIT MANAGER’S OFFICE

It is the dean / unit manager who allocates resources to her/his units according to the vision, mission, values, and strategic priorities of the unit. Please work with your direct reports to assure a proper alignment of department goals with unit goals and thereby bring about the best utilization of increasingly scarce resources.

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 15

QUESTION AND ANSWER SEGMENT

University Budget Committee: 9-16-2016 Meeting – Agenda Item 8 16