A new budget model designed to give department chairs greater financial control was put in place this semester by the Office of the Provost. If successful, the new model will be further developed for future academic years.
The new system is designed to augment department control over the allocation of resources and to increase budgetary efficiency, said Provost Robert Zimmer. Under the new model, department chairs have greater flexibility and autonomy and are able to make more decisions on their own with regard to non-salary expenditures, he said.
Although overall department budgets must still be approved by the dean of the faculty and the provost's office, individual department chairs now hold the authority to move money between budget lines. This added authority reduces the number of times a department chair has to get approval from a dean to make budget adjustments, Zimmer said.
The new system will "make resources more fungible across items and across time," said Andrew Foster, professor of economics and chair of the department. "Most economists would say that's a good idea," he said.
"We know better than the central administration how to allocate resources within the department to best achieve the goals that we establish," said Associate Professor of Education John Tyler, the department chair, who teaches a class that covers education finance. "It's the right model for achieving the highest level of production," he added.
One major change is a new budget rollover system by which department money not spent during one year rolls over to the next year's budget. In the past, academic departments were faced with the incentive to go on a buying spree at end of each year to use up their allotted resources. "We would buy all this stuff for which we had only a marginal need," Tyler said.
With budget rollover, departments have a greater incentive to save resources and to use them where they will really count. Although rollover is not part of the 2005-2006 plan, it is likely to be added in 2006-2007, Zimmer said.
The decentralization of budgetary control is designed to lead to greater accountability on the part of individual departments. Department chairs will be responsible for the maintenance of their budgets and will be held accountable if they overspend. With rollover, if a department spends beyond its budget, it will owe the University that money in the following academic year. "With the rights of money management come responsibilities," Tyler said.
Departments with adequate staff support may welcome the added responsibility, but Foster noted that smaller departments may not have the resources to control their own funds efficiently. The expanded autonomy "definitely increases complexity in terms of data management," said Foster, who added that his department is fortunate enough to have a "terrific" chief of staff. For smaller departments, however, this burden falls to the chair, who may or may not have the necessary expertise.
The provost's office tried to counter that disadvantage by adding money to the budgets of the departments that receive the least amount of funding per faculty member, Zimmer said. Also, budget management training sessions have been scheduled in order to help those who lack financial expertise.
While Zimmer pointed to decentralized control as the aim of the new model, some recent changes appear to move towards greater centralization. For instance, at a University Resource Committee informational session in September, Zimmer said the University now recaptures the unpaid salaries of departed staff members, whereas in the past these excess funds were left under department control. The decision to recapture this money was made in order to "use the money in a more focused way," Zimmer said.
Overall, the new model presents "a more rational budget structure," Zimmer said, "and we're using this year to work out the kinks."
