November 20, 2012
Alan Harrison, Provost and Vice-Principal (Academic) and Chair of the Provost’s Advisory Committee on the Budget (PACB), has posted an update on the university’s new activity-based budget model, and the budget process for 2013/14.
The university decided to adopt a new budget model to help facilitate planning and provide a better tool to units in support of decision-making.
“The new budget model supports transparency and academic priorities whereas in recent years, base-budget increments were typically linked to enrolment increases, and reductions to the base budgets were typically across-the-board,” says Provost Harrison. “Neither set of decisions considered the appropriateness of the level of any particular unit’s base budget that was being adjusted. This new model appropriately supports planning as we pursue our academic goals.”
The PACB, established in March 2012, began developing a budget model that was simple and transparent, provided broad-based incentives, and aligned with the university’s academic goals.
The culmination of the work of PACB resulted in a new budget model with four key features:
• Attributing revenue (tuition and grant funding, including funds provided centrally to support indirect costs of research) to the faculty or school responsible for generating that revenue;
• Attributing the costs of shared services (e.g., space, the library, human resources, the Provost’s office) to each of the faculties and schools – the revenue-generating units – supporting that unit;
• Establishing a University Fund to provide a source of support for institutional priorities; and
• Continuing direct distribution of revenue that is not included in the operating budget (research grant and contract revenue, targeted philanthropic gifts, and other in-trust targeted funding) to the faculty or school responsible for generating that revenue.