Thursday, April 26, 2018

The University of Iowa is using a new budget model for the General Education Fund that gives each college and central service unit greater control over their budget and provides guidelines for equitably sharing costs.

The goal is to increase transparency, reward collaboration, and provide predictability and stability in the face of a generational decline in state support.

The new model does not redistribute funds already allocated to colleges and campus units; instead, the new guidelines largely concern changes in revenue or state appropriations beginning with the coming fiscal year.

There are four guidelines.

  • Each unit’s budget has to be balanced every year.
  • Because the university budget builds on collegiate success, innovation and collaboration within and among colleges to improve financial performance is crucial for our overall financial health.
  • Of new revenue generated by a college that is subject to being shared, such as tuition and fees, 70 percent will now remain in that college, whereas 30 percent will be distributed to services that college shares with others.
  • Increases or decreases in state appropriations will be distributed by apportioning 60 percent to colleges and 40 percent to shared services.

Some revenue, such as funds from grants, is not subject to being shared between the colleges. In addition, tuition from students in newly created programs will remain within the college for that program’s first two years.

Requests for additional funding for a central service unit will be decided by a review committee comprising a dean, a member of shared governance, a member of the president’s cabinet, and a collegiate budget officer. The review committee will apply the values decided upon by deans and campus leadership at a budget retreat in spring 2016. Those values are Student Success, Quality Metrics, UI Values, and Future Impact.

The new budget model applies to the General Education Fund, which this fiscal year made up about $740 million of the UI’s roughly $3.9 billion total budget. The UI’s total budget includes the UI Hospitals and Clinics, among other research and service centers.

The new model will be used to finalize the budget for the coming fiscal year, FY 2019, which begins in July.