|ACADEMICS||UNIVERSITY RESEARCH||INSTITUTIONAL RESEARCH AND ASSESSMENT||UNIVERSITY OUTREACH|
Since becoming Provost in 2011, I have given much thought to Auburn’s fiscal future and how our institution can better support its mission by improving our processes for acquiring and allocating resources. I hope that thinking has been strategic. Judging from the dozens of thoughtful conversations I have been privileged to have with many of you, I sense an emerging consensus that now is the time to align our resources with our strategic priorities.
In our efforts to achieve these priorities, Auburn’s greatest financial challenge is our increasing dependency on revenue from tuition in an environment characterized by diminished state support and intensifying competition for students. Changing demographics and continuing increases in operating expenses only compound that challenge. An Auburn degree has always been a great investment. In order to ensure that this tradition continues and to remain true to our land-grant mission, we must assure Auburn’s ongoing financial health. Considerable thought has been given to how we might better support Auburn’s mission by improving our processes for acquiring and allocating resources.
Auburn’s current budget model–the mechanism that determines how much revenue is allocated each year to colleges, schools, and support units–is built on historical precedents and incremental change. This approach freezes financial decisions made years ago and limits our ability to address new challenges and opportunities. With the onset of decreased state funding over the past years, this plan needed to be updated. Over the past three years, I have heard myself say—on several occasions—there simply has to be a better way.
In my attempts to make the budget process more transparent for our campus stakeholders, I discovered there really wasn’t a way to be transparent about revenues under our current budget model. The major revenues—student tuition and the state appropriation—flow into a big pot called Division 1. Each college or school is given what amounts to a checkbook and permission to spend against this revenue, up to a certain amount. But beyond that spending limit, not much is clear about revenues that might be available for our core work of instruction, research and public service.
Over a year ago, Dr. Large and I charged a Strategic Budgeting Steering Committee to evaluate and enhance the current allocation model. A key advantage to this process has been the opportunity for increased interaction between the academic leadership and campus administrators, all of whom carry the responsibility for achieving results with the available resources. In meetings with many campus stakeholders, the initiative’s Steering Committee articulated key financial challenges the University faces, including increased risk from tuition dependency and stiffer competition for faculty and students. Together, the committee agreed that a budget model that would simply carry forward historical allocations would be likely to lead to inequities across colleges, salary compression, continued lack of funding for strategic academic initiatives or improved facilities, and reflexive, across-the-board belt tightening instead of strategic investment.
As the initiative has evolved, the number of engaged campus stakeholders has multiplied, and a good conversation has gotten better. The Steering Committee continues to operate using the five key principles that have served as specifications for a better resource allocation model. These principles include prioritizing the funding of strategic initiatives aligned with Auburn’s mission; delivering consistent, accurate, and realistic financial projections, while allowing flexibility to respond to future opportunities and unknowns; promoting authority, responsibility, and accountability, both locally and university-wide; providing incentives for effective management of both revenues and expenses and rewarding creativity and innovation; and being simple, transparent, and logical.
This promising new budget process encompasses those five principles and is the product of the hard work and diligent participation by stakeholders. It serves as a vast improvement from the previous and addresses pressing issues in the higher education environment that have emerged over the years.
I believe that the initiative described on this site can be effective in addressing those issues and in assuring Auburn’s ongoing financial health, so that we can accomplish together the things we have been entrusted to our work.