Even though the start of the fiscal year is six months away, budget planning for Academic Affairs is in full swing for FY16-17. I hosted an OAA budget open forum on November 18 as an opportunity to reflect on FY14-15, take stock of our current fiscal year performance and trends, and describe the FY16-17 process.
I have hosted open budget forums on a quarterly basis starting in Fall 2014 and will hold forums again in Winter and Spring 2016. The November 2015 forum presentation and all past forum presentations are available on the Academic Affairs website.
Performance-Based Budgeting (PBB)
We are in our second full year of performance-based budgeting (PBB). Our approach from the onset was to develop a model that aligns resources with changing learning needs, program innovation and development, and quality support of faculty. Additionally, our goal was to move PSU away from incremental-based budgeting of our Education and General Fund Budget (E&G).
This model rewards achievement of specific strategic initiatives and allows units to experience the impact of well-considered strategic planning and good financial decision-making. It is built on the foundation of purposeful Strategic Enrollment Management (SEM) that shapes and guides enrollment and enhances student and institutional success. Through this strategic approach, schools and colleges have gained greater flexibility in planning and decision-making regarding their resources, and for the first time in years, we were able to fund areas of increasing student demand and support faculty.
We continue to improve the processes and methods of forecasting enrollments and budgets and the allocation of resources to ensure decisions are made in a logical, transparent, and efficient manner.
Integrated Planning of Enrollment and Budget (IPEB)
IPEB ensures that Strategic Enrollment Management and student and faculty success drive budgets. A timeline featured on the Academic Affairs site outlines the steps in the process. Schools and colleges have developed preliminary Strategic Enrollment and Resource Plans and linked these to budget considerations. They have met with the Enrollment Forecast Review Team and received questions and input from the Faculty Senate Budget Committee. Plans are being refined and, in January, the Academic Leadership Team (ALT) will review all plans to assess impact on each school and college.
We have seen significant improvements in the IPEB process thanks to Vice Provost Scott Marshall’s leadership. We now provide schools and colleges with a five-year, term-by-term, trend data developed by the Office of Institutional Research and Planning (OIRP), a benchmark enrollment and budget performance against last year’s projections, and automated parts of the process.
Business Model Analysis Project
The Business Model Analysis project is one example of improvements to the IPEB process. As part of reTHINK PSU and with partial support of a grant from the Association of Public and Land-grant Universities (APLU) and the Gates Foundation, Susan Klees, (Finance & Administration), Andria Johnson (Finance & Administration), Thuy Vu (Academic Affairs), Alison Nimura (OIT) and Hans VanDerSchaaf (Academic Affairs), took on this project to expand and refine the suite of tools available to the University for analyzing our financial status. They looked at what was needed to improve tools, such as the Revenue Cost Attribution Tool (RCAT) and RCAT Planner.
Susan Klees, project lead, provided the following project description:
By using a design-thinking process that focuses on developing empathy and a deep understanding of stakeholder needs, the project team developed insights into the campus’ needs for an analysis tool, and translated those insights into design criteria. Through 16 individual and group interviews, plus stakeholder engagement sessions, the campus community graciously provided ideas, insights and expertise. Our findings are summarized in our report to stakeholders and the project’s artifacts.
The integration of the Business Model Project’s team and design priorities into IPEB will enable the creation of a tool to more strongly connect the SEM and PBB processes and their accompanying tools. The design criteria we created include a number of principles that have already made an impact on the university and will continue to do so as the IPEB project unfolds. For example, we learned from our interviews that we need financial analysis tools to be interconnected to minimize the amount of data users have to input and ensure a consistent experience across the spectrum of tools we use. Work on the Business Model Analysis tool will continue into 2016 and there is an expectation of near-term development of a working prototype.
Changing budget models is not easy. It will take time to develop all the tools needed and for people to recognize we are in a new era of planning and budgeting.
There are many things aligning us in a solid direction: our new strategic plan, the change from a deficit to an investment model, strong collaborations among the Academic Leadership Team, the Division of Enrollment Management and Student Affairs, and the Division of Finance and Administration.
Budget forums are just one avenue of sharing information and getting feedback. More details can be found on Academic Affair’s IPEB site and my prior PBB-related blogs. I welcome any input, advice or questions.