Budget model review team hones in on specific issues

How undergraduate tuition gets distributed, strategies for consistent funding of deferred maintenance, and how to share the indirect costs recovered from research projects. Following a fall semester spent listening, these are three of the issues selected for review and recommendations by the committee asked to assess the effectiveness of Iowa State's 3-year-old budget model.

Director of university budgets Dave Biedenbach said the goal is to send a draft report, with observations and recommendations, to executive vice president and provost Elizabeth Hoffman by the first week in March. In addition to Hoffman, the committee's intent is that vice presidents, college deans, the Faculty Senate and Professional and Scientific Council would have about a month to review the draft. Input from these individuals and representative groups would be used for the review committee’s final report, expected to be completed by May 1.

The 10-member review committee is co-chaired by Liberal Arts and Sciences associate dean Arne Hallam and Business dean Labh Hira. Working in small groups, committee members are focusing their efforts this month and next on these issues:

1. Impact of the budget model on graduate student education, including the numbers of students and the number and size of scholarships awarded.
2. a. The formula used to distribute undergraduate tuition.
   b. The metrics used to allocate the costs of the administrative service centers.
3. a. The advisory committees providing input to administrators of the six administrative service centers (for example, the library, student services, facilities services, IT services), including their size and structure, their effectiveness, a perceived disconnect between the funding the service centers receive and the services provided.
   b. Interactions between the administrative service centers and the resource responsibility centers (which include the colleges, ISU Extension, intercollegiate programs).
4. Distribution of approximately $30 million in research indirect costs, including efficiency and effectiveness of the current formula being used.
5. a. Funding for deferred maintenance, including what level of central funding should be directed to this, and a method for partnering with the appropriate college(s) to complete projects.
   b. The Institutional Excellence Fund, including the size of the fund and setting priorities for its use.
6. Development of the university's annual operating budget, including timing, availability and sharing of information, integration of college and unit operating budgets.
7. The funding model (provost/president decision-driven vs. activity-based) used for research administration, ISU Extension and the Ag and Home Economics Experiment Station.
8. Ability/track record of the budget model to help the university meet strategic goals; particularly, is the resource management fund (state appropriations whose use is directed by the president and provost) an effective means for supporting university priorities?

Biedenbach said representatives from the Faculty Senate and P&S Council concurred with the eight-item list before the committee proceeded with its work.

Background

Iowa State units first used the model -- known as the Resource Management Model (RMM) -- 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 hired Resource Planning and Management Associates, Nashville, to lead the information gathering during fall semester. The listening phase included a symposium in late September and interviews and focus groups with employees during October and November.

Biedenbach said the consultant will continue in an advisory capacity this semester. "We'll use them as a sounding board. Are we addressing what they heard last fall?" he said.