Executive sponsors of the budget model redesign project launched in December 2020 have approved a new budget model recommendation for the Boulder campus. The recommendation, submitted by the project’s Strategic Alignment Committee and the Design Committee earlier this month, is the result of 15 months of work completed by CU Boulder deans, leaders, shared governance representatives, faculty, students and staff and marks the end of the project’s design phase.
During the design phase, the committees engaged in 56 meetings to create and refine recommendations for various components of the model. Beginning in February 2022, the model prototype was presented to over 500 faculty and staff from each of the campus’s colleges, schools, university libraries, campus leadership and shared governance groups.
Chancellor Philip DiStefano served as one of the project’s executive sponsors.
“I’m sincerely grateful to the committee members involved in this project and commend their collaborative approach to designing a model that vastly increases our campus budget model’s transparency and flexibility, while also supporting our mission-critical activities and outcomes,” DiStefano said.
According to the executive summary report (PDF), the new model will use both quantitative formulas and qualitative approaches to allocate tuition dollars to CU Boulder schools, colleges and campus support units.
Ann Schmiesing, executive vice provost for academic resource management, served as co-chair of the Strategic Alignment Committee. “In interviews conducted in 2019, deans, finance leaders and shared governance bodies indicated a desire to more closely tie school and college funding to the student credit hours (SCH) generated through teaching activities, while not designating SCH as the only factor determining how tuition flows to schools and colleges,” Schmiesing said.
In addition to student credit hours, undergraduate student retention and graduation are also built into the formula that will flow tuition dollars to colleges and schools.
“This budget model represents a significant step toward the goal outlined in the 2018 Academic Futures report calling for a budget that serves as a tool to accomplish our mission as a comprehensive public teaching and research university,” said Provost Russell Moore.
The model also includes a Supplemental Fund that will allow funds to be distributed to schools, colleges and support units via strategic prioritization and desired outcomes, such as the support of diversity, equity and inclusion efforts on campus.
According to Carla Ho’a, chief financial officer for campus and co-chair of the Strategic Alignment Committee, the formulas that allocate funds to campus entities need to work in concert with discretionary decisions that ensure the campus as a whole can deliver on its mission. “A well-designed budget model will not automate all funding decisions,” Ho’a said.
Ho’a points to the Strategic Fund, a feature missing from the previous budget model, as an example. “This fund allows CU Boulder to make strides in areas that have a campuswide impact. In our planning for next fiscal year’s budget, a third of the strategic funds pool (approximately $1 million) will be allocated to the Chancellor’s Diversity Fund.”
The new budget model will roll out starting in July 2022 for fiscal year 2022–23 in what’s known as a “hold harmless” year. According to Katrina Spencer, deputy chief financial officer for campus and chair of the project’s Design Committee, “hold harmless” means colleges, schools and campus support units will receive at least as much funding as they did in the previous year while the new model is implemented. “This approach creates some budget stability for our schools, colleges and units while also allowing us to see how the model works and to make adjustments if needed,” Spencer said.
Central to the design of the new model is a regular review of the overall budget to ensure its continued effectiveness. Later this summer and into the fall implementation working groups will be convened to develop the processes and governing structures for the model into the future, including a consistent process via which schools, colleges and academic and administrative support units can make budget requests.
“It’s essential that we see the budget model as an important tool in the campus’ fiscal strategy, not a driver of the strategy,” chief operating officer Patrick O’Rourke said. “Ultimately, we’re adopting a budget model that will be a reflection of our campus priorities and that will provide a mechanism to allocate resources to those areas.”