In the wake of a new administration, the Budget Model Committee started “from scratch” this semester to review Ohio University’s budget process.
The committee is working to produce a report by Fall Semester that more effectively guides resource allocations. The administration communicates planning assumptions to the proper colleges. The budget model oversees the “broader perspective” of revenues that are allocated through a Responsibility Centered Management model.
“OHIO has been using a variant of the Responsibility Centered Management model of budgeting for approximately five years now, and its ongoing review is a routine, pre-planned assessment,” Chad Mitchell, chief of staff for the vice president for Finance and Administration, said in an email.
The ultimate purpose of the budget model is to determine resource allocations across colleges and regional campuses.
“Most universities review their RCM in a little more detail and see how it’s working and see if the right incentives are built in there, that’s kind of where we are with this committee, and it sort of coincides with President Nellis coming in and sort of asking us to look at what we’re doing and see if it’s still the thing to do,” John Day, associate provost for Academic Budget and Planning, said.
OU’s Responsibility Centered Management system was originally created with collaboration from the deans of each college because the budget model assigns colleges as “responsibility centers.”
“Responsibility Centered Management revenues are allocated to the responsibility centers and therefore, we have to allocate the expense for the allocated costs and the capital costs,” Budget Director Katie Hensel said.
The budget must make certain that OU has the resources to pay for all of the expenditures associated with the university, whether those are compensation of employees, budgets within planning units or debts.
“Again, it ends up being different perspectives (between committees), sort of the macro-perspective overall is we sort of are managing the institution, and that’s the sort of view the Budget Planning Council is getting,” Mitchell said.
The Budget Planning Council provides planning assumptions for understanding revenue and expenses. That council also oversees the university’s overall financial state.
“The Budget Planning Model is how we take those planning assumptions (from Budget Planning Council) and we then allocate down to the college level assumptions that each college will use for their planning, so what portion of revenues and how they will change are going to change,” Hensel said.
OU’s Budget Planning Council started meeting in August to review basic planning and parameters that colleges should use for finances.
“(Basic planning assumptions) are generally rollover from where we left our multi-year budget process, and then we add to it any planning assumptions that we need to adjust,” Hensel said.
At the September meeting, the council began reviewing factors that influence the budget, such as enrollment trends.
The council includes deans, Faculty Senate representatives, the Student Senate president, the Graduate Student Senate president and people from colleges’ finance departments.
“We’re still going to allocate costs, how we do it, which is how deeply we go (with that calculation to the colleges is under review),” Day said. “One of the caveats of this group is they still have to address how we do measure resources in terms of revenues and expenses.”