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In the summer of 2011, as she confronted yet another cut in state funding, Chancellor Linda P.B. Katehi declared that �ٺ���Ƶ would take control of its own destiny by developing new financial strategies and a new budget model.

And whereas other academic institutions might have taken two to three years to make the switch, �ٺ���Ƶ did it in 16 months — a feat that Kelly Ratliff, associate vice chancellor of , and Jason Stewart, principal budget analyst, are happy to talk about.

And so they will, having been accepted as presenters at two forthcoming conferences: the Western Association of College and University Business Officers, or WACUBO, and the National Association of College and University Business Officers, or NACUBO.

“We are excited about these opportunities to share our experiences with our peers,” Ratliff said this week before departing for the WACUBO meeting in Anchorage, Alaska.

Ratliff and Stewart, along with David Maddox, who worked on the �ٺ���Ƶ project as a consultant, will present what WACUBO calls a “Tale from the Front.” The �ٺ���Ƶ tale and others on the program focus on “issues currently being dealt with on our campuses and presented by your peers who have actually dealt with these issues.”

Ratliff and Stewart will make the same presentation, “How to Design and Implement a Budget Model in 16 Months,” at the NACUBO annual conference, July 13-16, in Indianapolis.

Greater understanding

Phase I of �ٺ���Ƶ’ new, more transparent budget system, implemented for 2012-13, provides the faculty and administration with a greater understanding of and control over their budgets.

For example, the campus now apportions tuition according to a formula that considers number of student credit hours, number of majors and number of graduates.

And research units keep more of what formerly went to the central campus for indirect cost recovery. These overhead reimbursements are based on direct research expenditures and, under the new budget model, more of these funds stay with the units that actually generate them.

Future phases will address faculty resources, summer session and graduate tuition revenue.

As �ٺ���Ƶ grows, as the schools and colleges adopt new approaches to teaching and as enrollment patterns shift, academic leaders will have a more precise idea of how those changes will directly affect their funding — and can make adjustments.

The model is a form of "responsibility-based budgeting," though not quite as radical, as Provost and Executive Vice Chancellor Ralph J. Hexter pointed out — in that the �ٺ���Ƶ model retains a provost’s allocation, which is funded largely by the provost’s keeping a portion of each revenue stream and pooling these funds with state funds.

�ٺ���Ƶ’ hybrid model, incentive-based budgeting, does the following:

• Attributes a significant portion of revenue to the units that generate it.
• Increases unit responsibility for funding their activities.
• Offers incentives to provide a strong experience for students, identifies and pursues new revenue, and manages resources with an eye to long-term returns.

White papers

When Chancellor Katehi and Provost Hexter opted for a new budget model, the campus had already seen a 34 percent decline in state funding from 2007-08 to 2011-12.

Not knowing what the future would bring, they decided to act quickly — without a steering committee. Instead, budget planners relied on the provost (he participated in regular working sessions); the Council of Deans and Vice Chancellors; assistant deans and chief operating officers; the Academic Senate, especially the Committee for Planning and Budget; department chairs; and “anyone or any group that invited us to present.”

The budget team also prepared a number of white papers, each one dealing with one topic, for example, undergraduate tuition, indirect cost recovery and the provost allocation.

Stewart described the white papers as “an important communication tool for us,” spurring discussion among campus leaders and budget planners. The provost added budget letters and a .

All of the white papers are , along with updates and status reports, overviews and frequently asked questions, and the provost’s letters.

The website also includes materials from the University of Michigan and the University of Washington, locations of �ٺ���Ƶ field trips to meet with budget planners who had already gone to similar models.

Now, �ٺ���Ƶ has its own new model, in place for almost a year, and UC San Diego has already paid a visit to learn more about how we did it.

Online

, including the provost’s video