A new budget allocation model revealed Tuesday by MU officials will reward individual schools, colleges and other units based on productivity.
Guidelines of the new Resource Allocation Model, which takes effect July 1, include:
- Schools and colleges will receive 70 percent of undergraduate tuition and academic fees generated by their department.
- The remaining 30 percent will go toward MU’s central funds.
- 80 percent of the revenue allocated from undergraduate tuition and fees will be based on credit hours; 20 percent will be based on the number of degree completions within that unit.
- All graduate and professional tuition and fees will be allocated to the schools and colleges that generate those tuition dollars.
- 100* percent of facilities and administration fees from grants will be allocated to the schools and colleges.
- 10 percent of funds unused at the end of the fiscal year will be reallocated back to MU’s central funds. Previously, all unused funds remained at the department’s disposal.
“What we’re trying to do is make the process easier for the future,” MU spokesperson Christian Basi said. “It gets us off on the right foot.”
MU’s current model is based on historical budgeting and doesn’t reward productivity or adherence to MU’s values of student success and research innovation, according to a 45-page report from MU’s Resource Allocation Model Committee.
It also lacks transparency, clear financial incentives and doesn’t follow standardized metrics to allocate funds, according to the report.
“We are committed to making sure we continue to use every resource entrusted to us in a fiscally responsible manner,” Chancellor Alexander Cartwright said in a news release.
Additionally, the money needed to maintain any physical space on campus will be deducted from its revenue allocation, with the amount depending on the square-footage. This new approach should encourage campus leadership to make the most use of their physical space, and to consolidate to make room for other purposes if possible, Basi said.
Universities receive funding from a number of different sources, which causes some funds to be more restricted than others. For example, funds obtained through a grant or donation must be used for the purpose designated by the source.
Tuition and fees and state appropriations are the least restricted funds and are used to support general operations like salaries, student services, facilities and research and are the funds most affected by this new model.
The new Resource Allocation Model allows for campus leadership to plan for the future, more so than is possible with the current model, Basi said.
The Resource Allocation Model Committee was co-chaired by Provost Latha Ramchand and Vice Chancellor for Finance Rhonda Gibler and included representatives from students, faculty and staff.
The report has been in the works for about 18 months, since October 2017, and Gibler has spoken with MU’s Faculty Council several times this year about what to expect with the model’s unveiling.
Cartwright, Gibler and Ramchand will hold two open forums later this week to answer questions and provide clarification. The first, to take place at 10 a.m. Wednesday in 22 Tate Hall, will be livestreamed and recorded for later viewing. The second will be held at 9 a.m. Thursday in 201 Cornell Hall.