May 9, 2011
OHIO's budget discussion continued during two open forums held last week.
The forums, on May 2 and May 4 gave faculty, staff and students an opportunity to ask questions regarding the recently released proposed budget reduction scenarios .
Executive Vice President and Provost Pam Benoit, Associate Provost for Academic Budget and Planning John Day, Associate Vice President for Finance Mike Angelini and, at Wednesday's meeting, Vice President for Finance and Administration Stephen Golding provided answers and engaged in discussions on a number of budget topics.
Benoit opened Monday's forum with a brief statement regarding the development of the proposed budget reduction scenarios. She indicated that multiple conversations with planning unit heads were a key part of the development of the proposed scenarios.
"One of the things we did is have meetings with the leaders of colleges, support units, and general fee supported units to discuss strategies and the impact of various options that they were proposing for their budget scenarios," said Benoit.
On Monday, an attendee asked about the current state of the Ohio University Foundation's investments and how the interest from those investments in the form of endowment income was going to be used in helping to meet budget reductions.
One of the strategies used by units in the proposed scenarios was to shift some operational costs to endowment funding. Not all units were able to do this, explained Angelini, because some foundation funds are restricted for specific uses by the donors.
"The financial crisis has had an effect on the endowment. But, for our accounts that are currently in existence, we have seen remarkable growth across the board," said Angelini. "However, we try to be mindful of not putting too much on foundation funds because of the problem we encountered a few years ago," said Angelini, referring to the steep decline in the stock market in 2008, which significantly reduced the availability of endowment income.
On both Monday and Wednesday, the panel responded to a series of questions regarding Responsibility Centered Management (RCM) and where Ohio University is in the planning process for its new budget model.
On Wednesday, Benoit stressed that the budget model is still under construction. "We are currently in phase one of the process. We are using some RCM principles to inform our current budget planning, but we're in the process of talking about a number of important decision points about the RCM model," said Benoit. "We are having some very spirited discussions with the deans about the RCM model."
In response to a question about how members of the university community could begin to understand the workings of a budget model based on RCM principles, Benoit indicated that there are some good introductory resources posted on her website.
Both Benoit and Golding stressed that transparency will be one of the advantages of the RCM OHIO model. But in order to take full advantage of that transparency there will need to be widespread training across the institution.
Several questions were asked about how the most critical academic values and activities of the institution such as interdisciplinary work would be reflected in the new budget model. Day indicated that the model is a budgeting tool not a mechanism for creating strategic priorities.
In the case of interdisciplinary work, the budget model will create a way of distributing revenues generated through interdisciplinary courses but it cannot answer the question of how to value the non-revenue generating aspects of interdisciplinarity. Day indicated that the model's purpose is to help units understand how best to support the activities they value not to determine what they should value.