Review of budget model wraps up
A five-member work group asked to assess 47 recommendations for the university's budget model advises that more than half (27) of them be implemented, and president Steven Leath has concurred.
Because they relate to setting academic priorities and policies, another 11 recommendations will be referred to senior vice president and provost Jonathan Wickert. The remaining nine will not be implemented now, but may get a second look after budget planning is completed for the year that begins July 1. Nearly all of the recommendations address either the budget planning process generally or the budget model (officially known as the Resource Management Model, or RMM) structure.
The work group's February implementation report (PDF) is online.
Leath highlighted the changes in a memo to Wickert and senior vice presidents Tom Hill (student affairs) and Warren Madden (business and finance) this week. Some of the 27 recommendations were implemented earlier this academic year, such as changes to budget advisory groups; the rest will be implemented in the next three months as part of the annual budget building process.
Some of the key items in those recommendations include:
- The formulas for distributing undergraduate and graduate/professional tuition dollars, respectively, among colleges and departments will remain unchanged.
- The portion of indirect cost revenue from external research grants that go to the principal researcher(s) will remain unchanged at 15 percent. (Proposed changes to the IDC formula weren't recommended for implementation.)
- The deferred maintenance fund must grow and reflect the size of the university's deferred maintenance backlog, currently about $262 million.
- Two central strategic funds – the Institutional Excellence Fund managed by the president and the Academic Excellence Fund managed by the provost – should be increased to levels that support university goals in academic programs, research, student enrollment, etc.
- A portion of the Institutional Excellence Fund will be earmarked to help campus service providers (for example, IT services, library, student services, facilities) handle unforeseen cost increases such as high enrollments.
- Formal and informal discussions need to occur early (fall) among senior leaders about setting university priorities that will guide the annual budget development process.
- Deans, administrators and their budget staff members need access to more helpful electronic data that improves and clarifies budget planning and management. Iowa State's investment in Kuali financial systems will help address this need.
The work group reviewed each of 47 recommendations in a May 2012 report (PDF) compiled by the committee that did a 10-month assessment of the then four-year-old budget model.
Did it work?
Work group member Dave Biedenbach, assistant vice president for financial planning and budgets in the president's office, noted that while the formal review of RMM is concluded, the changes implemented still are subject to scrutiny. Once the university FY14 budget is approved this summer, stakeholders will be asked whether the changes resulted in a more effective budget development process.
"We're still working out how we'll do it, but we're committed to having a mechanism in place at the end of the FY14 budget process that gives people input on how it's working," he said.
Joining Biedenbach on the work group were: Pam Elliott Cain, associate vice president for business and finance; Kathy Jones, associate vice president for student affairs; Miles Lackey, associate vice president and chief of staff in the president's office; and Ellen Rasmussen, associate vice president for academic planning and resources.