Even a short conversation regarding budgets can have the effect of a commercial strength sedative.
Although annual budgets seldom reflect accurate year-end expenditures, the value of a well-designed budget process for institutional stability and consistent progress toward strategic goals cannot be overstated. The old sayings “put your money where your mouth is” or “follow the money” are always true.
Ultimately, what we resource and how we do it identifies our true priorities regardless of what might be said.
Clearly, the current practice of incremental budgeting based on historic practices will not adequately support future institutional progress.
With that in mind, along with my belief that resources are best managed and invested wisely at the level where the work is being done, we initiated an effort over a year ago to create a new budget model and process for Tennessee Tech. During this time, the Dean’s Council and the Budget Advisory Committee made up of faculty, staff, and administrators have been working with the Huron Consulting Group to identify and refine potential budget models to best fit our current needs and future aspirations.
Our current budget model offers these characteristics:
- Academic and administrative budgets roll forward automatically within the financial system each year, and once established, they have not been regularly evaluated.
- Budgets serve as “expense authority” controls and do not focus on unit-level revenue generation.
- Variation in year-over-year budgets is limited to decisions made by top leadership in conjunction with recommendations from the strategic planning and budget advisory committees.
- Presently, funding requests are not based on established metrics.
- Budgets have not been regularly evaluated by a central authority.
- The budget cycle is not governed by a dedicated budget office, but rather by resources across the Business Office.
Many of our current budget’s characteristics do not support Flight Plan goals. So with that motivation, we are looking at an incentive-based model that allocates revenues to units, rewards performance, and is reflective of the university’s resource allocation and budget model guiding principles.
The new budget model should focus on these features:
- Increased transparency of school and college budgets
- Greater empowerment to deans for strategic growth
- Revenue streams allocated to units based on student instruction, enrollment, and degree production
- Unit incentives for focus on growing revenue and controlling expense budgets
- An infrastructure and reinvestment pool to enable senior leadership to make strategic investments
It is time to give a status update on our budget model work and ask for broader review and discussion within the entire campus community. This is still a work in progress, and your input will help shape the final model.
Please join us for a Campus Budget Forum on Tuesday, April 14, from 9 to 11 a.m. in Derryberry Hall Auditorium. The event is open to the entire campus community.
I am very appreciative to all the deans and committee members who have diligently thought through all the issues and circumstances involved. At this point, I feel very good about the proposed model but realize some of the finer detail and related institutional behaviors may require some time for adjustment. Changing an age-old practice like how we budget is not an easy thing to do, but ultimately it may be one of the most important decisions we make that allows Tennessee Tech to become all it can be.
Please take the time to review the budget model as it is disseminated and openly discussed. Your thoughts and opinions will be most helpful at this next stage of evaluation.