Budget Model

USD is in a period of change. The University continues to face expenditure growth driven by competition to attract top students and annual increases to compensation in order to attract, retain and develop world-class faculty and staff. Average net tuition revenue per undergraduate student is in a period of decline. Increasing amounts of financial aid are needed to attract top students in an increasingly competitive marketplace. With tuition as a percent of USD’s overall funding being upwards of 75%, there is a call for USD to closely examine our allocation and use of financial resources to ensure that our top strategic priorities, such as scholarships for underrepresented students, are met.

We are moving to an incentive-based budget model. Under an incentive-based model, revenues and direct expenses remain in the unit in which they are generated. The costs of shared support units are allocated proportionally across the revenue-generating units, and a percentage of the revenues are captured to be used centrally for strategic priorities. Academic and auxiliary units that surpass their budgeted differentials retain the additional funds that they generated for investment in unit-specific priorities.

USD’s new budget model:

• Is based upon the two priorities of transparency and accountability in order to build trust.
• Identifies resources that can be used across the University and fairly allocates them for future projects and strategic investment.
• Incorporates collaborative engagement in the budgeting process and promotes initiatives across units.
• Promotes responsibility and authority in a consistent format which allows the institution to maintain a level of operational excellence while upholding the core tenets and the financial goals of the University.
• Seeks to balance the breadth of offerings consistent with a liberal arts university, while upholding the commitment to professional graduate education through strategic and mission-oriented resource allocation.

Academic Revenue-Generating units are:

• College of Arts and Sciences
• Professional and Continuing Education
• School of Business
• School of Engineering
• School of Leadership and Education Sciences
• School of Law
• School of Nursing
• School of Peace Studies

Auxiliary Revenue-Generating units are:

• Bookstore
• Hospitality Services
• Housing
• Parking Services
• Dining Services

Shared Support units are:

• Academic Affairs, including Career Services, Institutional Effectiveness, International Programs, the Provost, the Registrar and Sponsored Programs
• Co-Curricular, including Student Affairs and Athletics
• Copley Library
• Enrollment Management
• Facilities Management
• General and Administration, including the Office of the President, Finance, Human Resources and general Institutional expenses
• Information Technology Services
• Mission and Ministry
• University Advancement
• University Operations
• Undergraduate Studies

Each Shared Support Unit will be responsible for developing a Service Level Agreement (SLA) outlining service expectations and assumptions, as well as service performance metrics for benchmarking. A Shared Support Unit Allocation Committee and the executive leadership body will review SLA’s and either agree with them or ask the unit to make revisions. Each Shared Support Unit will build out base budgets in accordance with the agreed-upon SLA. The Shared Support Unit Allocation Committee will meet to review base budgets for support units, utilizing templates highlighting historical performance, current needs and key performance indicators. The executive leadership body will review final budget recommendations for the support units, and will either approve the budget or ask the unit to make refinements. Support units will finalize their base budgets following the direction of the executive committee. At the end of the year, support units will prepare budget vs. actual data for presentation to the Shared Support Unit Allocation Committee and the executive leadership body, outlining reasons for overages and/or shortages.

Gail Baker, Vice President and Provost

Terry Kalfayan, Vice President for Finance & Chief Financial Officer

Theresa Byrd, Dean, University Library

Jane Georges, Dean, Hahn School of Nursing

Jamie Alonso Gómez, Dean, School of Business

Nick Ladany, Dean, School of Leadership and Education Sciences

Noelle Norton, Dean, College of Arts & Sciences

Patricia Márquez, Dean, Joan B. Kroc School of Peace Studies

Chell Roberts, Dean, Shiley-Marcos School of Engineering

Stephen Ferruolo, Dean, School of Law

Donald Godwin, Assistant Vice President and Dean of Students

Tom Herrinton, Vice Provost

André Mallié, Assistant Vice President for Auxiliary Services

Lynne Morris, Director, Administrative and Budget Services, Facilities Management

Liza Peterson-Gary, Budget & Operations Manager, Information Technology Services

Steven Sumner, Professor of Economics, School of Business

Rachel Blaser, Associate Professor, College of Arts & Sciences

Sarah Gray, Chair and Professor, College of Arts & Sciences

Ann Mayo, Professor and Nursing Researcher, School of Nursing

Katy Roig, Associate Vice President, Reporting & Compliance and Interim Chief Financial Officer

Janet Courtney-Smith, Assistant Vice President, Budget & Planning

Marie Davis, Budget Director

October 25, 2018 – Initiative Kick-Off: Discussion of project goals, approach and industry context

November 7, 2018 – Guiding Principles & Model Structure: Discussion of guiding principles for the budget redesign and model structure decisions

November 28, 2018 – Revenues Allocation: Discussion of revenue allocation decisions, including tuition and grants

December 19, 2018 – Central Support Unit Allocation: Discussion of decisions regarding expense allocation and central funds

January 15, 2019 – Central Funds: Continued discussion of decisions regarding revenue and expense allocations and central funds

February 6, 2019 – Methodology Review and Infrastructure: Dean feedback on methodology and discussion of potential revisions

February 26, 2019 – Overview for Steering Committee Retreat: Preview of final methodology and review of outstanding discussion points

April 29, 2019 – Steering Committee Retreat: Finalize model methodology and gather group consensus