Wright State University’s Budget Transformation: The “Mission-Driven Allocation” Model

1. Wright State University’sBudget Transformation: The “Mission-Driven Allocation” Model Presentation to: Faculty Senate May 7, 2012

2. Agenda • Introduction • WSU Budget - Current State • The Changing Environment • WSU “Mission-Driven Allocation” Model (MDA) • WSU MDA Model Design • The Path Forward • Concluding Thoughts and Discussion May 7, 2012

3. WSU Budget: Current State • Traditional Base Budget Approach • Centrally Funded Incremental Adjustments • Compensation Changes • Inflationary Adjustments • Technology Initiatives • Centrally Funded Allocations • Strategic Initiatives • Capital Projects May 7, 2012

4. The Changing Environment • WSU must transform its budget development and management process to respond to this dynamic environment: • Drive student success • Expand programs and scholarship • Offset diminishing revenue streams • Catalyze entrepreneurship • Optimize expenses and drive efficiency • Respond to community needs May 7, 2012

5. WSU “Mission-Driven Allocation” Model (MDA) • As a result, WSU is developing the “Mission-Driven Allocation” Budget Model • The power of the MDA Budget Model • Enhance revenue generation and entrepreneurship (students & scholarship) • Focus resources on strategic initiatives • Establish a defined governance structure • Promote transparency • Streamline expenses and drive efficiency May 7, 2012

6. WSU MDA Model Design • Types of Units • Academic Responsibility Centers • Colleges, Lake Campus, WSRI, Matrix Department • Auxiliary Responsibility Centers • ex. Bookstores, Food Service, Nutter Center, Athletics • Administrative and Service Units • ex. Human Resources, Utilities, Facilities, Registrar May 7, 2012

7. WSU MDA Model Design • Revenues – Unrestricted and Restricted • Tuition and Fees • 75/25 Based on Instruction and Majors • Specific Tuition and Fees • State Share of Instruction • 60/40 Split Based on Tuition FTE and Research • Research Grants and Contracts • Direct Research Revenues • Indirect Cost Recoveries • Investment Income • 4.5% of 5 Year Carryforward Average May 7, 2012

8. WSU MDA Model Design • Expenses • Direct • Specific to each Responsibility Center • Controlled Individually by Units • Indirect • Service Units (40 Individual/Consolidated Units) • Allocations Based on Different Drivers • Budget Managed by the A & S Units May 7, 2012

9. WSU MDA Model Design • Strategic Initiatives Funding • Sources Based on % of Selected Revenues • Uses • Responsibility Centers Predetermined Subvention • New Initiatives (One-Time Funding) May 7, 2012

10. WSU MDA Model Design • Governance • Four Committees will be established to oversee and manage the MDA Budget Model: • Mission-Driven Allocation Executive Committee • Administrative Services Allocation Committee • Deferred Maintenance Committee • Space Management Committee May 7, 2012

11. The Path Forward • FY 2013 • Ongoing training and communications • Parallel process – budget management under traditional method/translation into MDA reports • Launch of governance committees • FY 14 budget development (MDA method) • FY 2014 • Full implementation (with hold harmless) May 7, 2012

12. Concluding Thoughts and Discussion • The WSU MDA Budget Model is: • Aligned with WSU mission, vision, values • Designed to empower innovation and collaboration • Responsive to the University Strategic Plan • Geared for driving entrepreneurship • Agile in a dynamic environment • Stakeholder-driven and governed • Designed to delivereffectiveness, transparency, and efficiency May 7, 2012