How Our Model Works

A highly collaborative, multi-phased approach was taken to design and build 51勛圖厙s budget allocation model. The redesign process officially launched in December 2020, building on stakeholder interviews conducted in 2017 and 2019. The new model was launched in fiscal year 2022-23.

Model Design

51勛圖厙s budget allocation model leverages an incentive-based methodology where school and colleges receive annual budget based on student credit hours, enrollment, student retention and graduation.

啦堯梗泭51勛圖厙 Budget Model Redesign: Executive Summary泭provides an overview of our campus budget allocation model, the process by which it was developed, the manner in which it meets the goals set forth by campus leadership, and the timeline and associated processes for its implementation in fiscal year 2022-23 (hold harmless year) and beyond.

啦堯梗泭Final Budget泭Model Recommendations泭presentation泭includes the full, detailed budget allocation model recommendation presented to the Executive Sponsors by the Design and Strategic Alignment Committees in May 2022.

啦堯梗泭Interactive Budget Allocation Model flowchart泭includes definitions of泭how the budget is allocated, explains泭the reasons behind budget model decisions, and examines the anticipated impacts of the budget model components.

The were approved in April 2023 and provide detailed information on the qualitative portion of the budget model.

See below for definitions of泭key components of the campus budget model and answers to the most frequently asked questions.

Goals for the Campus Budget Model

  • Provide泭greater flexibility泭for strategic investments and to respond to the rapidly changing higher education landscape, including opportunities and crises that may arise.
  • Increase泭transparency, enabling泭the campus community泭to better understand and engage in budgetary discussions that further泭the universitys mission and strategic objectives.
  • Better reflect our values and priorities, instead of reflecting legacy decisions that may no longer be relevant.
  • Provide enhanced incentives to support and reward growth in key areas, respond to declines, and ensure accountability for the use and allocation of funding.
  • Focus on the whole泭allocation, and not just the incremental changes that might occur year-over-year.

Conversations held with campus stakeholders over the past few years point to a budget model that should:

  • Reflect and execute the university's mission and priorities
  • Be understandable, easy to manage, logical and transparent
  • Promote and reward performance, success and innovation
  • Foster trust and responsibility around decision-making
  • Provide predictable funding to support our ability to be strategic in our planning

Frequently Asked Questions

Our model is most closely aligned to incentive-based budgeting. It flows funds to colleges and schools based on quantitative factors including student credit hours,student retention and graduation as well as qualitative factors based on campus-wide priorities.

Our previous model allocated funding to colleges, schools, and campus support units using an incremental model. Budgets for colleges, schools and campus support units were based on what they had received the previous year, plus or minus a small amount depending on whether campus revenues increased or decreased.泭泭

Our current budget model provides increased transparency and flexibility, and better reflects our values and priorities as a comprehensive public teaching and research university.泭泭

Key differences between the current model the old model include:泭

  • The current model is an incentive-based model, whereas the old model was an incremental model.
  • Unlike our previous budget model, the current model includes a Strategic Fund that allows the campus to meaningfully invest in campus-wide priorities.
  • Our current model is reviewed regularly for effectiveness and to ensure that the model is operating as intended.
  • The current model includes elements that enable the university to better support retention, graduation, and diversity, equity and inclusion goals.

The current model was implemented in July 2022 for fiscal year 2022-23.泭

Budget models, in and of themselves, do not generate revenue. A budget model is simply a revenue allocation method.泭

The design of 51勛圖厙s budget model focuses on net tuition; net tuition is graduate and undergraduate tuition less financial aid, refunds, tuition remission (the portion not covered by departments) and bad debt. Tuition is 51勛圖厙s largest revenue source.泭

No. The current budget model excludes ICR funds (including Department Allocation of Indirect Cost Recovery, DAICR).泭泭泭

No. Over the last decade, direct state funding has ranged between 2% and 8% of 51勛圖厙s total budget. While an important source of funding for campus, state funding is not included in the model due to its lack of predictability.

No. Revenue generated by auxiliary units that generate their own revenues to support distinct activities (including Housing and Dining, Parking Services, the CU Book Store, and Continuing Education) is not included in the budget allocation model.

Net tuition revenue from summer session is integrated into the campus budget model according to the same percentage splits as fall and spring semester net tuition revenue. It is at the discretion of each school/college how this revenue is then in turn allocated to specific departments and programs.泭泭泭

Yes. The new budget model recognizes differential tuition as well as double majors and minors. Details are included in the Final Budget Model Recommendations.

Support for strategic campus priorities, including leading sustainability efforts, is addressed in a few different areas: the Strategic Fund, the Supplemental Fund and in the shared pool of funding in the campus support unit allocation pools.泭

Funding will be allocated to the school or college. How a school or college in turn allocates funding to specific departments, programs, or divisions is a school/college decision.泭

APA funding is included in the 65% of net allocable tuition going to schools and colleges. Distribution of funds from the college level to the department or program level is a school/college decision.

In preparation for redesigning the budget model, the project team conducted interviews with deans, shared governance bodies, finance officers, and other stakeholders. These interviews indicated a widespread desire for school/college budgets to be tied more explicitly to college of instruction and college of record. Tying school/college budgets more explicitly to student credit hours enables schools and colleges to respond to enrollment shifts.

No. We also heard a desire for SCH-related metrics not to be the sole feature of a quantitative tuition allocation formula. The new model includes additional quantitative factors such as undergraduate student retention and graduation, and qualitative methods via the Strategic and Supplemental Funds to allocate funding.泭

A nominal portion of school/college budget allocations were tied to SCH through formulas such as the undergraduate enrollment growth formula and professional masters revenue sharing agreements, but the bulk of school/college budgets were not tied to SCH-related metrics in our former incremental-based budget model.

Not all mission-critical activities at 51勛圖厙 generate sufficient revenue to be self-supporting. The Supplemental Fund represents our commitment to 51勛圖厙s comprehensive teaching and research mission and provides a qualitative aspect that complements the quantitative metrics of student credit hours, retention and graduation.

Yes. First and foremost, the new budget model was designed and developed for 51勛圖厙 by 51勛圖厙. Huron Consulting Group was engaged to assist 51勛圖厙 budget model governance committees with designing the new model via data analysis, budget modeling, peer institution benchmarking, examining case studies and sharing best practices. The principles and practices embedded within the model were created by budget model governance committees, with input from campus stakeholders.

Engagement with stakeholders across 51勛圖厙 included:泭

  • 40+ stakeholder interviews and listening sessions
  • 6 thematic listening sessions
  • 9 Coffee and the Budget sessions
  • 23 town hall meetings for faculty and staff in individual schools and colleges
  • 3 meetings with each individual school/college dean to review budget model details
  • Ongoing updates to shared governance 51勛圖厙 Faculty Assembly (BFA), Academic Affairs Budget Advisory Committee, BFA Budget and Planning, Staff Council, etc.
  • Bi-weekly Strategic Alignment Committee open office hours
  • Various presentations to Finance Leaders Council and other university groups
  • Participation of over 50 university members on project committees
  • University-wide updates in 51勛圖厙 Today and through videos and related materials on the Budget and Fiscal Planning