Committee posts its review, recommendations on budget model
A 10-member committee asked to review the effectiveness of Iowa State's 4-year-old budget model completed its task last week and posted its report and recommendations online for the university community.
"I thank the committee for its hard work and thorough report, and I am pleased to see that there is general agreement that the RMM has worked well," said executive vice president and provost Elizabeth Hoffman, who gave the group its assignment. "I agree with the suggestions for ways to make sure that units that do not benefit directly from the incentives imbedded in the model could be better integrated into the budgeting process.
"While the model has brought greater transparency to the budgeting process, I also recognize that more and better communication is always valuable," Hoffman said.
The 134-page, interactive report contains lots of data and discussions of numerous inquiries into how or why the the Resource Management Model (RMM) operates the way it does. Pages 106-113 contain a summary of the review committee's recommendations. Their insights include:
- The formula for distributing tuition, at both the undergraduate or graduate levels, should not be changed.
- The Institutional Excellence Fund should be increased. (State budget cuts reduced its size because these dollars were used to deal with funding shortfalls, not for strategic investments as designed.) More leaders, not just the provost and president, should have input into how these dollars are invested, and an annual summary should document its allocations and investments.
- Funding for the Office of the Vice President for Research and Economic Development has not kept pace with the growth in research activities. The unit should receive a funding increase (from the university's general state appropriation), both to improve administrative support of Iowa State's research engine and for flexibility in funding special research initiatives.
- The budget model is geared toward undergraduate education, but two units important to the university's land-grant mission – College of Veterinary Medicine and Extension and Outreach – don't serve undergraduates. The provost and president, who can adjust state appropriations going to colleges and the other outside revenue-generating units, should do so when necessary to ensure high quality programs.
- An "enrollment contingency fund" of $500,000 should be created within the Institutional Excellence Fund. It would be used as needed to help the six administrative service units in the model deal with fall enrollments that exceed the May projections.
- Advisory groups put in place to provide regular input on budget issues to the leaders of the six administrative service units (such as library, IT services, business services, student services) haven't all worked as planned and should be disbanded. Broad-based input still is crucial, and each leader should develop a new mechanism for gathering advice.
- More conversation, both formal and informal, should occur among leaders of the various budget units (such as colleges, VP units), including discussion "this year" of university budget priorities for the next fiscal year.
- Employees should receive more training on the RMM so they are equipped to complete the tasks it requires of them.
The committee noted in its report that some criticisms of the RMM more accurately might be outcomes of historic cuts in state funding to the university. Implementation of the model occurred at the start of the cuts.
Associate vice president Miles Lackey said President Steven Leath is committed to implementing recommendations in the report. After the campus community has had some time to study the report, he said Leath would announce the process for getting that done.
Director of university budgets Dave Biedenbach, who assisted the committee, said changes that are implemented would occur as the FY14 budget (the year that begins July 1, 2013) is developed. Noting that a majority of the committee's recommendations focus on processes, he said some changes could take more than a year to implement.
Iowa State units first used the model to build budgets for the fiscal year that ended June 30, 2009. The committee that adapted and led its implementation recommended a review of the model after three to five years of use.
The review committee was assembled last June and led by Liberal Arts and Sciences associate dean Arne Hallam and former Business dean Labh Hira. The committee worked with Resource Planning and Management Associates, Nashville, on the information gathering during fall semester. The listening phase included a daylong symposium, interviews with budget unit leaders and budget officers, focus groups and two open forums. Members of the university community also submitted comments to a designated email address.