Proposed Budget Model for Divisions
CoE Finance Team 2007-08
Jan Allebach, ECE
Kathy Banks, CE
Keith Bowman, MSE
Vince Bralts, ENAD and NE
Makarand Hastak, CEM
Chris Martin, ENAD
Bill Oakes, ENE
Arvind Varma, ChE, Chair
Divisions Budget Model
Jan Allebach, ECE
Chris Martin, ENAD
Bill Oakes, ENE, Chair
The proposed budget model is based on the definition for Divisions approved by the College of Engineering (attached). The definition gives a number of constraints that are used as inputs to the budget model. Among these are the intent that the divisions are to be cross-cutting and more agile than traditional schools, and are reviewed for continuation every five years. The intent of the divisions is not necessarily to create future schools, nor their associated infrastructure that must be maintained. While a Division may evolve into a department or a school, it is not assumed that it will. By definition, Divisions do not have tenured faculty lines, so each faculty participant has a home school for tenure and promotion. The divisions have undergraduate and/or graduate programs, and include both teaching and research activities as part of their mission.
The budgetary needs of divisions have similarities and differences with those of the schools. As a result, the model for the schools is used where appropriate but it cannot be applied fully. The differences in the types of divisions make a single model impractical, so three different financial models are presented. The three categories of models are for 1) Self-supported divisions; 2) Divisions during start up, and 3) Established divisions.
The models are designed to create a guiding philosophy for the financial management of divisions within the College of Engineering, and are not intended to be associated with specific current divisions. Similar to the model for the schools, the number of faculty assigned to the work of the divisions is determined by the Dean through the normal faculty hiring planning process and is considered an input to the model. The model does not calculate the required number of faculty FTE's. It is also recognized that current divisions may require a transition period to come into alignment with these models.
Models for Divisions
1) Self-supported Divisions
Divisions that have the ability to charge tuition and fees at market based rates should be expected to use this revenue to offset operational costs. For example, EPE has the ability to charge tuition and fees based on market rates, so its operation should be viewed as a self supported division. Hence, its budget should be based entirely on external funds and not part of the recurring general fund allocation process. Funding on a non-recurring basis from the college could be negotiated by the Head of the Division and the Dean, and is beyond the scope of the College Finance Team.
2) Divisions in the Launch Phase
An important financial objective for a Division in the launch phase is to achieve a level of self-sufficiency by building a budget based on recurring funds (allocated by CoE), extramural research expenditures, and gifts. The keys to generating these different sources of support are a division head, faculty participation, staff support and some operating S&E. Thus, the proposed model for a successful launch is an infusion of financial resources early on from the College, followed by a systematic reduction or potential growth to a steady-state level based on the performance of the Division and the priorities of the College. A start-up division would be granted
Division Head support, at an appropriate FTE level determined by the Dean.
A pool of funds for faculty support.
Administrative and secretarial support.
Supplies and expenses for operation of curricular and research directions of the division.
Start-up support for a Division Advancement professional, if deemed appropriate by the CoE Director of Advancement and the Dean.
A five-year strategic plan would be required for the start of the division. As the strategic plan is accepted by the college and performance measures are met by the division, a transition plan to a "steady state" level of activity would be negotiated between the College and the Division as part of a five-year review of the division. The financing for the launch phase would not start out as part of the recurring budget of the college and would not therefore be subjected to the formula allocations of the established divisions.
3) Established Divisions
During the launch phase of the division, a strategic plan would be created to establish the "steady state" or "established" level for funding of faculty FTE' s. This level for a division' is determined by the college through the normal faculty hiring planning process. In the established phase, a division would be supported with:
Division Head release time, based on the size and scope of the division.
Administrative assistant support, based on the percent of the Head appointment.
PTE faculty salaries determined by the College through the normal faculty hiring process. These are not associated with specific faculty but are allocated to the division to buy time of current faculty for participation in division activities at the discretion of the Head of the division and the agreement of the faculty member and her or his School Head. This salary can be used for academic year faculty salary, or summer salary only in the case of offering summer courses.
Faculty support costs in S&E - at minimum, 60% of the school allocation would be granted to the divisions per faculty PTE for support of the mission of the division including support for classes, student support, research support. This amount is scaled from the ab initio calculations for the schools and assumes that basic support for faculty (copiers, phone, PIC, clerical, etc.) is still supported by the schools who would receive a full allocation from the college. This support cost will be reviewed annually and compared to the University's budget policy for S&E inflation.
The home school for the faculty will continue to receive a full faculty support allocation, without reduction for participation in the division.
Current faculty salaries - Faculty time for current faculty members would be paid from the division salary pool for the time required for the division. Like the models for the schools, the FTE's of faculty for the Divisions are determined by the Dean and are not part of the budget model; the number of faculty FTE' s in Divisions are considered input to the model. The faculty salary for the home school(s) and the S&E associated with the faculty PTE will not change for the home school based on their participation in the division. The faculty salary pool for the divisions is not associated with specific faculty lines but is treated as a pool for the divisions to buy faculty time. The creation of a salary pool for each division will require a recurring allocation of general funds. These funds would be allocated from unfilled faculty lines not already committed to Schools within the College. Not associating faculty salaries with named lines provides flexibility and agility for the divisions and the faculty participating in the division activities. The exception would be the Head of the division who would be allocated a specific appointment as part of his/her faculty position.
This means that, for salary or for support of the faculty, there is NO impact on the FTE's of the schools based on participation in divisions by faculty.
In aggregate, this will decrease the number of potential open lines in the Schools but will incentivize School Head support of faculty participation in divisions.
New faculty salaries - Divisions may partner with one or more schools to hire new faculty to specifically meet mutual needs of the division and partnered school(s). This process follows the faculty hiring process of the College. For newly hired faculty, the college will provide the %FTE for the division to add the faculty member, and the remainder of the %FTE to the school that would be the tenure home (and other partnered schools). A full S&E allocation would be given to the home school for support of the faculty member. The 60% proportion of the S&E prorated to the %FTE within the division would be allocated to the budget of the division. If the relationship between the division and the new faculty member were to end, the college would provide the division's portion of the salary to the home school. The replacement allocation to the division would be based on the decision of the Dean.
Adjustments based on enrollments - The schools budgets are adjusted according to variations in enrollments. For the Divisions, there would not be an adjustment from year to year since the Divisions would have the ability to limit enrollment and not be forced to handle a large influx of students. Further, they do not have tenured faculty lines to support incase of a decline in enrollment.
Performance measures - Each division would negotiate their respective performance goals, for any incentive component to the budgets, with the Dean.
Advancement - Each division would be supported by the College of Engineering's advancement activities. The division would be expected to support their own investment in advancement activities similar to the schools when the scale supports that level of activity. In the launch phase, the College would provide partial support of the advancement efforts.
Research -Support for the division's research enterprise would be the obligation of the division and not the home schools. To enable this support, research incentive funds must flow to the division. In order to not create conflicts with the home schools nor disincentives for participation in cross-disciplinary research within the divisions, 100% hard credit would be given to the home schools of the faculty for research and 100% soft credit would be granted to the divisions funded with College of Engineering resources.
* The Engineering Area Promotion Committee (EAPC) will review and define the specific policy for joint and courtesy appointments with Divisions.