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Governance

Strategic Resource Allocation Frequently Asked Questions

What is the new University budget model?
The new Strategic Resource Allocation Model (SRAM) is a hybrid budget approach that will enable the University to be more consistent with its Strategic Positioning Platform, enhance transparency about source and use of funds, and place greater authority and accountability at the level of Deans and other Budget Managers. SRAM is expected to encourage entrepreneurial activities throughout the institution and will optimize the flow of resources to areas experiencing growth.

Why are we changing to a different budget model?
The existing University budget model has been in place for many years and was adequate when the University relied heavily on state appropriations. With increased reliance on tuition and fees, the University must look for new, innovative, and manageable funding solutions that provide flexibility to offer high quality education supported by effective and efficient services. The budget needs to align resources with institutional priorities and be data-driven and transparent to all stakeholders.

 

What principles are guiding the process?
The six primary principles guiding the implementation and application of the Strategic Resource Allocation Model at the University of Central Missouri are to:

  • Support the University of Central Missouri values and strategic priorities;
  • Embrace a process that is simple and transparent at all levels;
  • Afford budget managers flexibility to optimize decision making consistent with institutional priorities and fiscal responsibility;
  • Provide clear, intuitive and direct budgetary incentives to enhance revenues and to control costs;
  • Include mechanisms to support both revenue and non-revenue producing activity; and
  • Use benchmark measures, as appropriate, for each unit to guide budget allocation decisions.

 

How does the new model compare to our current budget model?
UCM’s current approach uses a budget model in which new programs and services are funded incrementally based on approved requests. Deans and directors dialogue with administration to determine annual changes to budgets. This approach does not necessarily tie activity levels such as enrollment, credit hour production, or research to funding and therefore may sometimes result in non-equitable or non-transparent funding allocation.

Under the new budget model, the aim is to provide equitable allocation of resources, promote a greater sense of ownership and accountability by deans, vice presidents, and other budget managers, and create a culture that rewards entrepreneurship, streamlining of processes, and lowering costs.


What is the estimated timeline for implementation?
Implementation of the new budget model is expected to move through several phases over the next two years. The remainder of this fiscal year will be focused on: educating and training campus constituencies on key components of the budget model; implementing parts of the new model such as establishment of a process for request of strategic funding; identifying changes needed to the financial system chart of accounts; and developing reports and tools to support the new model.


During FY 2017, budget assumptions will be reviewed against actual results and recommendations for model revisions will be forwarded to the SLT and President as needed. A final plan to complete implementation of the new resource allocation model will be developed and implemented for FY 2018.


What are the fundamental components of SRAM?
Academic and Auxiliary Responsibility Centers are fundamental components of the new budget model. By definition, a responsibility center must generate revenue and is responsible for managing revenues, expenditures and fund balances and related financial decisions. UCM’s academic responsibility centers are being defined as the four colleges that earn for-credit tuition revenue. Auxiliary Responsibility Centers generate revenues from services rendered to both internal and external customers and that are fully costed for services received from the University. They include Student Housing, Student Union, University Bookstore and Textbook Services, Childcare Center, Parking Services, and Pertle Springs. The University may elect to subsidize certain Auxiliary Responsibility Centers in support of the institution’s mission and goals.


All other operating units with the University are being classified as Support Units and will be regularly reviewed to ensure effectiveness and overall support of the University’s mission and values. Support Units that generate revenues related to the services offered will be allocated those revenues and the related costs.


How will SRAM enhance quality?
Sub-categories of key performance indicators will be used to ensure that both academic and non-academic units do not focus solely on financial aspects of the model, but also maintain quality consistent with the mission of the respective unit. Changes in these indicators will be monitored and discussed to ensure they are consistent with the strategy of the unit and the university as a whole.


How do we come up with money for what we are doing? Where do the funds come from?
Funding for the University’s activities come from several sources. The primary sources of funding are state appropriations, tuition and student fees.

 

What happens to the base budget we’ve been getting? Do I have to justify it?
Base level funding will be reviewed as we proceed with the budget model process. Redirecting of resources could occur later. There will be accountability measures expected from all units for their funding.


Who is the on Budget Working Group?
The Budget Working Group is comprised of the Provost-Chief Learning Officer, the Senior Vice President for Finance and Administration, the Manager of Academic Fiscal Affairs, and the Director of Budget and Finance.


At what level will budget decisions be made?
Broadly, budget decisions will be made at all levels of the institution and there will be a strategic funding process made available annually. For the purpose of strategic funding, anyone may complete a pre-proposal, but it must be approved by the appropriate unit administrator before being submitted to the Budget Working Group. The Budget Working Group will do an initial review of all proposals and make recommendations to the Strategic Leadership Team (SLT). The SLT and the President will make the final decisions whether or not to approve, subject to availability of funds.


The Board of Governors approves the annual budget and in exercising its fiduciary and financial responsibilities provides oversight for the University’s financial and operational performance. The President provides oversight for the University as a whole. Thus, any changes to the resource allocation model require approval of the President. The President approves resource allocation recommendations before presentation to the Board of Governors.


What are the factors that will increase probability of receiving funding?
Probability of funding will be increased if the request supports the institution’s vision and strategic initiatives. The criteria should be tied to the strategic goals of Student Success, Growth with Quality, Sustainability and Efficiency, and the related Key Performance Indicators (KPIs). The criteria should also align with the Strategic Position Platform-Engaged Learning, Future-Focused Academics, Global Perspective, and a Culture of Service.


How will we measure the effectiveness of new initiatives?
The effectiveness of new initiatives will be evaluated based on their benefit to the key performance indicator categories and the institution’s goals and strategic intiatives.


How does SRAM affect major capital project outlays, such as deferred maintenance?
Funding requests for major capital projects will follow the same process and evaluation as other initiatives.

 

What will happen to carry forward funds?
Surplus year-end balances of unrestricted funds are expected to continue to be carried forward to generating departments and institutional reserves to allow a mechanism for departments and colleges to save funds for emergencies or major one-time expenditures and promote effective management of funds. Under authority of the President, the carry forward provision may be amended, or even suspended altogether, in any fiscal year it is warranted due to economic or other conditions.

How will transparency be achieved?
The SRAM process is expected to achieve transparency through enhanced communication, training, and fiscal reporting. A SRAM website will be used to help provide easy access to information and updates for the campus community and others.


How are we able to provide flexibility throughout the fiscal year?

Transition to the new budget model is being made with an expectation that adjustments may need to be made along the way. This flexibility will ensure that management can invest in strategic initiatives and emerging opportunities.

Throughout the fiscal year, it will be imperative to monitor the possibility that higher budget levels could be triggered, requiring additional resource commitments. Likewise, flexibility will allow avoidance of excessive spending if enrollment turns out to be less than expected.


Will this process change the way I do my job?
The SRAM is part of the campus-wide initiative of Leading to a Greater Degree where every employee is expected to know and understand how they support the key performance indicators (KPI) within the categories of Student Success, Growth with Quality, and Sustainability and Efficiency.


Are any jobs going to be eliminated because of this process?
There are no plans to eliminate any positions because of the SRAM process.


Will there be a set budget timeframe every year? What about opportunities that arise after budgets have been determined?
There will be an established schedule for the development of the budget, including a timeline for submission and assessment of strategic initiative funding proposals. Opportunities that arise outside of this schedule will be evaluated on a case-by-case basis.


How can the campus community make suggestions regarding the budget model, opportunities for efficiency, and reductions in wasteful spending?
All suggestions can be sent to the Budget Working Group via e-mail (budgetworkgroup@ucmo.edu) at any time.