Committee calls for new campus budget model

February 18, 2014 By Greg Bump

UW-Madison should develop a budget model that aligns resources with the university’s core missions, rewards innovation and provides flexibility necessary to accommodate change and growth, a campus committee is recommending.

Photo: Rebecca Blank

Rebecca Blank

The Budget Model Review Committee, made up of faculty, staff and a student representative, says the time is right for UW–Madison to move to a new budget model.

“We believe the risk of erosion of the quality of the institution is too great to accept the status quo,” according to a white paper issued by the committee.

Chancellor Rebecca Blank created the committee in September. Blank asked the committee to identify problems in the current campus budget model and provide a framework for thinking about alternatives. She commended the committee on its work.

“They did an excellent job of laying out the options, and I’m eager to have the next committee take up the task of finding a budgeting model that is best for UW–Madison moving forward,” Blank says.

Terry Warfield, department chair of accounting and information systems in the Wisconsin School of Business, says the committee process was inclusive and the outreach efforts were extensive. One of his tasks on the committee was to gather input from multiple perspectives across campus on the challenges of implementing change.

Photo: Terry Warfield

Terry Warfield

“I’ve been on campus for 25 years, and this is one of the best examples of a shared governance initiative in terms of the people around the table,” Warfield says. “Faculty, administration, deans, classified and academic staff and a student rep were all participating and had a role in developing the report.”

The committee says UW–Madison has maintained the same budget model over many years, in part to provide schools and colleges with predictable funding in favorable and unfavorable economic times. However, this approach allows for only limited reallocation across academic units and typically does not generate sufficient resources to support new initiatives and programs, the committee says.

According to the white paper, faculty, staff and administrators across campus indicate that the current budget model has led to undesirable practices and outcomes, including:

  • Academic units have no incentive to engage in financial planning.
  • Resource decisions are not transparently connected with academic decisions or outcomes.

Photo: Darrell Bazzell

Darrell Bazzell

  • Resource allocation and reallocation become a political process.
  • There are few clear financial incentives for improvement or innovation.

The committee’s white paper says we are entering an era that requires universities to find innovative solutions to tight budgetary environments.

“Universities like ours are at a point when nimble changes and future investments are necessary not only to maintain and strengthen our national and international reputation, but also to reinforce our value to the state and its taxpayers,” the committee says.

The committee, chaired by Vice Chancellor for Finance and Administration Darrell Bazzell, reviewed budget models used by universities similar to UW–Madison in size, complexity and mission. The committee also heard considerable agreement from UW–Madison faculty, staff, students and leadership that the current campus budget allocation model is no longer meeting the university’s needs.

“We believe the risk of erosion of the quality of the institution is too great to accept the status quo.”

Budget Model Review Committee

The committee notes that its work is just the initial step in developing a new budget model. It recommends that the chancellor create a cross-campus committee to conduct a more detailed review of budget models and recommend steps for transitioning to a new model.

Chancellor Blank, Vice Chancellor Bazzell and members of the Budget Model Review Committee already have been discussing the white paper with deans and campus governance groups.

Bazzell says ongoing engagement with the campus community will be key to achieving a new budget development and allocation process for UW–Madison.

“We are committed to strong communication throughout this process, and we will continue to engage stakeholders all across campus,” Bazzell says.