effective strategic budgeting in higher...

R A L P H C . W I L C O X , P h . D .P R O V O S T & S E N I O R V I C E P R E S I D E N T

U N I V E R S I T Y O F S O U T H F L O R I D A

M A R C H 6 , 2 0 0 9

Effective Strategic BudgetingIn Higher Education

Council of Colleges of Arts & Sciences

Fiscal Management Seminar

Purpose & Plan

A glimpse of USF and the State University System of Florida

Higher education and the economic landscape

Budget planning vs. budget management

Strategic budget planning: principles and processes

USF Mission

As Florida's leading metropolitan research university, USF is dedicated to excellence in:

Student access and success in an engaged, and interdisciplinary, learner-centered environment,

Research and scientific discovery, including the generation, dissemination, and translation of new knowledge across disciplines; to strengthen the economy; to promote civic culture and the arts; and to design and build sustainable, healthy communities, and

Embracing innovation, and supporting scholarly and artistic engagement to build a community of learners together with significant and sustainable university-community partnerships and collaborations.

USF Vision

The University of South Florida envisions itself as a premier research university with state, national, and global impact, and positioned for membership in the Association of American Universities (AAU).

USF Values

Excellence in teaching and learning; scholarship and research (both basic and applied/translational); together with community engagement and public service based on the highest standards of discovery, creativity and intellectual attainment,

Outstanding research and scientific discovery, including the application of new knowledge to solve state, national and global problems,

Recruitment and retention of world-class faculty and high potential undergraduate and graduate students,

Access to a world-class, globally relevant and affordable education, including utilization of alternative modes of delivery,

USF Values

Student competitiveness, success and academic achievement through knowledge, communication and critical thinking skill acquisition,

Cultural and ethnic diversity and inclusion along with an enhanced global experience, understanding, and appreciation,

Integrated, interdisciplinary inquiry and collaboration across departmental, college and campus boundaries,

Facilitating the optimal development of personal and professional potential of students, faculty, and staff, and enriching the quality of an engaged campus community,

Shared governance structures that empower all USF stakeholders, campuses and entities to reach their full potential,

USF Values

The creation and support of a premier university system that adds value to the region, state and nation while ensuring necessary levels of autonomy and preserving the distinctive regional and strategic identities of all member campuses and entities,

An environment of collegiality based on the principles of academic freedom, respect, integrity, civility, the freedom to engage in debate, the exchange of ideas and intellectual discovery, and professional responsibility,

Mutually beneficial partnerships and community engagement that increase the understanding of, and present solutions to, local and global challenges, with a mind to strengthening the economy and building sustainable healthy communities,

USF Values

An entrepreneurial spirit and innovation with a focus on defining, informing and generating “next best practices”,

The utility of proven and emerging technologies to enhance instruction, learning, research and engagement, and to improve service quality and efficiencies in institutional business practices,

Focus and discipline in aligning the budget and fiscal resources with institutional priorities and action, and

Transparent accountability along with timely and effective communication.

USF Goals

Expanding world-class interdisciplinary research, creative, and scholarly endeavors.

Promoting globally competitive undergraduate, graduate, and professional programs.

Expanding local and global engagement initiatives.

Enhancing all sources of revenue, and maximizing effectiveness in business practices and financial management.

USF Strategic Priorities

Community Engagement

Global Literacy & Impact

Integrated, Interdisciplinary Inquiry

Research & Innovation

Student Success

University of South Florida

One of only three Florida public universities classified in the top tier of research universities

One of 10 public research universities nationally rated both very high research activity and Community Engaged

Source: Carnegie Foundation for the Advancement of Teaching


46,174 students at institutions/ campuses in Tampa, St. Petersburg, Sarasota-Manatee, and Lakeland

219 degree programs at the undergraduate, graduate, specialists, and doctoral levels, including doctor of medicine

Employees: 13,207 total (07-08)

7,800 full-time, 5,398 part time


$1.8 billion annual budget *

$272 million total research expenditures ***

$158 million federal research expenditures ***

$360 million endowment **

$289 million financial aid awarded **

* 2008-09 ** 2007-08 *** 2006-07

USF System

-3.6% ($12,332,418)

-1.9% ($6,621,807)

-5.5% ($18,954,225)

-5.8% ($19,016,906)

-4.0% ($13,835,853)

-9.8% ($32,852,759)

-15.3% ($51,806,984)

SUS

-3.6% ($82,895,158)

-1.9% ($48,679,459)

-5.5% ($131,574,617)

-5.9% ($127,739,313)

-4.0% ($93,530,561)

-9.9% ($221,269,874)

-15.4% ($352,844,491)

20

07-

20

08

Fall 2007

Spring 2008

Total 2007-2008

20

08

-2

00

9

July 1, 2009

January 2009

Total 2008-2009

Total: July 1, 2007 – Present

Note: E&G budget only

All Source Budgeting at USF

State Appropriations

Federal Appropriations

Tuition

Fees

Financial Aid

Private Giving

Auxiliaries

Research – Direct

Research – Indirect

Patents & Licensing

Debt Capacity

Other

Purpose

To align USF’s budget with institutional strategic priorities through effectively communicating and engaging all stakeholders in a transparent, focused, and disciplined manner with a mind to preserving excellence; containing costs; leveraging efficiencies; generating new revenue; and maximizing performance.

Budget Planning Advisory Committee

Executive Budget Planning Advisory Council

President’s Cabinet

Board of Trustees

Guiding Principles for Budget Reductions at USF

Prioritize cuts so as to maintain progress toward USF’s strategic goals.

Strengthen the institution’s commitment to student learning, to ensure that those students currently enrolled progress toward graduation.

Protect, as high priority, the faculty’s research and innovation activities to serve regional, state, national and global constituents.

Secure the financial integrity of the institution.


In contrast to across-the-board cuts, implement targeted reductions in accordance with USF’s Strategic Plan 2007-2012


Critically evaluate existing operations based on:

Centrality to USF’s Strategic Plan

Excellence and impact of unit/institutional performance

Demand by constituent stakeholders

Future viability and sustainability of continuing the unit and/or program


Identify (a) cost savings, and /or (b) new revenues, through unit and/or program:

Restructuring and consolidation, including the promotion of more streamlined and integrated services, and interdisciplinary collaborations

Redirection

Reduction

Elimination


Maximize efficiency and effectiveness in institutional practices:

Discontinue non-essential services and freeze non-essential expenditures

Reductions in one area must not increase service obligations in another.

Clearly articulate measurable impacts of projected reductions.

Planning Performance & Accountability MatrixThe Dashboard: www.ods.usf.edu/Plans/PPA/dashboard.htm

Planning Performance & Accountability MatrixA Living Document


EXAMPLE

Primary Performance Indicator:1.A.I.1. Federal R&D Expenditures

Type of Measure: AAU, NSF, TARU

Data Source: NSF Expenditure Survey

Responsible Vice President: SVP Academic Affairs, VP Health, VP Research

USF Performance

04-05

USF Performance

05-06

USF Performance

06-07

GOAL07-08

USF Performance

07-08

GOAL08-09

USF Performance

08-09

GOAL09-10

GOAL10-11

GOAL11-12

$143 m $154 m $158 m $156 m $160 m (e) $170 m $170 m (e) $183 m $198 m $211 m

Planning Performance & Accountability MatrixA Living Document: www.ods.usf.edu/Plans/PPA/matrix.htm

Strategic Business Plan

Strategic Plan + PPA = Strategic Business Plan

Multi-year budget planning directly related to specific outcomes outlined in strategic plan

Strategic Plan Budget Assumptions

Need

Strategy

Assumption

Cost

Source(s)

Strategic Plan Budget Assumptions: Example

$24 m (recurring) in New Faculty Salaries & Benefits

Need – increase the following:Research expenditures

Scholarly productivity

National Academy members

NRC faculty quality rating

Faculty Arts & Humanities fellowships

Patents and start-ups

Community-based research

Access, selectivity, progress, and success



Strategy – Hire 200 new faculty over five years

Each year USF plans to hire 40 faculty as follows:

15 Professors (12 STEM, 3 Arts/Humanities/Social Sciences)

15 Associate Professors (12 STEM, 3 Arts/Humanities/Social Sciences)

10 Assistant Professors (6 STEM, 4 Arts/Humanities/Social Sciences)

40 new hires/year X five years = 200 new faculty



Assumption – new faculty will contribute to direct research expenditures

STEM Professor: $250,000 annually

STEM Associate Professor: $200,000 annually

STEM Assistant Professor: $150,000 annually

$83.7 m direct research expenditures in 5 years



Cost – 9-month salaries + 30% benefits

Professor: $105,000 STEM, $90,000 Arts/Humanities/Social Sciences

Associate Professor: $90,000 STEM, $75,000 Arts/Humanities/Social Sciences

Assistant Professor: $75,000 STEM, $55,000 Arts/Humanities/Social Sciences

$24 m ($4.8 m in new recurring annually) in new faculty salaries and benefits in 5 years



Source(s) – E&G/Tuition & Endowment

Engaging Colleges & Departments in Aligning Budget Planning & Strategic Performance

Keys to Success:

Communication (clarity & transparency)

Multilateral Engagement

Collaboration

Peer Assessment

Discipline & Focus

Engaging Colleges & Departments in Aligning Budget Planning & Strategic Performance

Guided by the Principles of:

Quality

Centrality

Demand

Viability & Sustainability

Multi-Year Faculty Hiring Plans

Two Phases:

Allocation of positions based upon student enrollment demand (access and success), and the probability of high quality strategic performance outcomes conducted by departments

Pursuit of “cluster” hiring, across departments and colleges, focused around selected interdisciplinary research and scholarly “thrusts”

Compact Planningwww.ods.usf.edu/Plans/Compact

Compact Planning: Unit Information

Unit Information:HistoryResourcesKey ProgramsPeers

Compact Planning

Budget

Staffing

Enrollment

Degrees Awarded

Contracts & Grants

Unit Resources:

Compact Planning: Unit Resources

Compact Planning: Initiatives

Keys to Effective Strategic Budgeting

The Strategic Plan

Clarity of Guidelines

Consistency of Practice

Engagement and Transparency

Data-based Performance Accountability

Discipline & Focus

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effective strategic budgeting in higher...

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