June 6, 2007
By Anita Martin
Three forums this week explore Ohio University's new budget model, which will begin to be phased in on July 1, 2007, the start of the 2008 fiscal year. The new model aims to link revenues and expenditures in a more effective way than previous approaches and tie fiscal planning more closely to the university's academic mission. The sessions also allow people across campus to give input on the model and issues still under consideration.
The first forum Monday afternoon drew about a dozen people, including administrators, department chairs and other faculty. Additional sessions are from 6 to 8 p.m. today in Baker University Center 242 and from 10 a.m. to noon Thursday in Baker University Center 239.
"This (week's forums are) a chance for the campus to come and give their input on issues that we've been wrestling with," said John Day, associate provost for academic planning and budget.
The new model will attribute revenues and costs to each academic and academic support unit. The previous budget model allocated resources on a historical, or incremental, basis, meaning that a unit's budget was based on the previous year's budget with little consideration given to changes in the activities of that unit. Now specifics have to be worked out about how the attribution of revenues and costs will be done in a way that will support academic priorities.
Day opened Monday's discussion with a presentation that illustrates projected cost and revenue figures for the university, broken down across individual academic units. The numbers reflect factors such as state subsidy, tuition, fees, financial aid, facilities costs and various overhead expenses. He discussed how the budget model would divide these costs and revenues among the academic and non-academic units.
The central issue, according to Day, lies in reconciling different levels of resources that each program requires. "Once we determine a balance for each college, that balance will vary, and we have to decide what, if anything, you do with that difference and over what period of time," he said.
For example, while overhead costs related to space, admissions, library, research and administration will be applied proportionately to academic units, the costs for supported and multidisciplinary units, such as the Honors Tutorial College and the Center for International Studies, would also need to shared in some proportion.
He also discussed what is necessary for the model to strike a balance between responsible budgeting and academic priorities. "There are many perverse incentives if you simply chase dollars," Day said. "We don't want to give incentive for colleges to increase their class size or not hire tenure-track professors just to save money."
To avoid such implications, academic-quality indicators have been identified, including such issues as number of tenure-track faculty members, research and creative activity, class size, grades, incoming student profiles, program accreditation, honors programs and interdisciplinary activity.
Despite the numerous factors affecting the budget, the new model emphasizes simplicity. Whereas some approaches to budgeting employ complex accounting methods, Ohio University's new model utilizes proportional allocations.
"You can get carried away accounting for every dollar," said Day, who adds that the budget model represents only one tool for fiscal decision-making. "You can't just press a button and turn (the model) on. There has to be a human brain behind this model," and, as this week's forums underscore, this must be a collaboration of many brains.
In 2005, the Resources Subcommittee of the Task Force on the Future of Ohio University, which President Roderick McDavis established in 2004 to help map the university's future, proposed and researched the budget model. The Resources Implementation Team developed it over this past year. Both groups were co-chaired by Phyllis Bernt, immediate past chair of Faculty Senate, and Associate Vice President for Finance and Administration Terry Conry.
More recently, the Budget Planning Council, which Executive Vice President and Provost Kathy Krendl and Decatur co-chair, was formed to ensure greater openness and collaboration in the budgeting process. All three budget-planning groups included students, administrators, faculty and staff representatives.