Inside Iowa State

Nov. 17, 2006

More details rolled out about proposed budget model

by Anne Krapfl

More details about the membership and function of budget advisory committees, how campus services would be paid for and an implementation schedule for the proposed budget model are part of the latest (Oct. 31) report from the Budget Model Review and Implementation Committee to President Gregory Geoffroy.

The president accepted the report and has initiated a final review phase, after which he will make a decision on implementing the proposed budget model. That decision will come by mid-January. He has asked leadership constituencies, including his cabinet, deans, Faculty Senate and P&S Council, to provide comments on the proposed model.

In the meantime, members of the committee and its working groups continue to study and further develop details of the proposed model, which links revenues to the responsibilities of major units and allocates support service costs to the units that use them. In Iowa State's current model, units simply receive incremental annual increases (or decreases, in years of budget cuts) that are a percentage of the previous year's allocations.

The report is online at www.iastate.edu/~budgetmodel. Following are highlights of additional information in the October report:

Implementation schedule

The committee proposes that the "resource management model" be fully implemented in fiscal year 2009 (which begins July 1, 2008). However, lots of work would have to occur during FY08 for the new model to be ready to go.

So, the committee recommends that the university's FY08 budget be built next spring for the last time using the current model. As FY08 unfolds and procedures and data become available, a second FY08 budget using the new model would be developed centrally in order to re-establish base numbers for the FY08 budget. Estimates for things such as student enrollment, tuition revenue or utilities consumption would be compared to the actual experience for FY08. The latter would be incorporated into the FY09 budget as it is developed.

This gives resource responsibility centers the chance to become familiar with the new model during the FY08 operating cycle, said Ellen Rasmussen, a member of the committee.

Expense pools

In the latest report, "expense pools" refers to indirect expenses -- campus services -- that, in the new model, would be allocated to the university's resource responsibility centers (i.e. those that generate revenue). As proposed, there would be six expense pools:

• Library.
• Administrative/academic support services such as Honors Program, CELT, Women's Center, Institutional Research and the Graduate College.
• Student services such as dean of students office, student health center, recreation services and registrar.
• Central IT services such as core infrastructure for computer systems, learning technologies, research and high-performance computing and IT training.
• Central business services such as payroll, accounting, human resources services and accounts receivable.
• Facility services such as grounds care, custodial service and utilities.

There also would be several options for allocating these services, including: consumption, student head count, staff FTE count, assignable square feet or proportion of direct expenses. The committee hasn't yet finalized which methods would best be applied to which services, but expects to complete that work by the end of the calendar year.

A seventh expense pool includes the president's office and units that report to it (such as government relations, legal services and university marketing), as well as the staff and space for the office of the executive vice president and provost. These expenses would be fully funded by state appropriations.

Budget advisory committees

As proposed, each of the top administrators overseeing the areas identified as expense pools would have a budget advisory committee to advise him or her during the annual budget development process. (Facility and business services would be combined in one advisory committee since both answer to the vice president for business and finance). There also would be a university budget advisory committee to provide recommendations to the executive vice president and provost on university-wide budget matters. The proposed size of the committees has expanded (to as many as 21 members) in the latest report so that students, faculty, staff and administrators have representation on them. The administrators would be required to provide relevant information to committee members, consider all recommendations from the committee and provide feedback.

These committees aren't intended to replace other advisory groups leaders may already be using.

Cost of instruction . . . and other questions

The October report includes an eight-page addendum in which the committee discusses key issues from campus discussions this fall. Some of these issues are the focus of the committee's ongoing work this semester. For example, on the question of whether to even the playing field to correct historical funding inequities, the committee's advice is that it's not practical to "rebase" the budget in the first year of the new model. It suggests that in subsequent years, university leaders could use the Resource Management Fund to address these kinds of inequities.

New vocabulary

If you were familiar with the June proposal, you'll note that a few key terms have been replaced in the newest proposal:

Old	New
Alternative Budget Model #3	Resource Management Model
Responsibility centers	Resource responsibility centers
Subvention	Resource management fund
Carry-over funds	Strategic reserve funds

The October 31 report of the Budget Model Review and Implementation Committee is online. It includes recommendations on advisory committee membership, expense pools and an implementation timeline.