We need a new operating budget model to achieve our One University vision
In early 2022, the need to develop a new budget model for the University of Alberta was apparent. The current budget model was designed in a distinctly different operating environment. Since the last budget model was developed, the university was impacted by total cuts to operating grant funds of $222 million (34%).
These changes have meant fundamental shifts to our revenue mix and cost structure, making the current model unworkable. Beyond this, the current model has four limitations in its ability to effectively steer us towards the University of Alberta for Tomorrow (UAT) goals.
The current model:
- Leaves units overly exposed to funding shocks, which have been experienced over the past three years.
- Limits our capacity for long-term planning, with planning dominated by year–on–year changes in government grants.
- Does not secure stable funding for university-wide strategic initiatives, which are critical to our future success.
- Does not create the right incentives with respect to enrollment growth, teaching and research.
We need a new model that:
- Creates the right incentives with respect to our growth and research targets
- Controls certain areas of cost
- Reduces our exposure to external funding shocks
- Supports us to plan ahead, rather than responding to year-over-year fluctuations in the operating grant
- Ensures that our limited resources are directed in a way that achieves the goals stated in UAT
- Provides a level of transparency and clarity into the university budget that can enable fully informed decision making at all levels
Budget Model 2.0 design will commence this month with the launch of five expert working groups
The development of Budget Model 2.0 was delayed by a year to allow for leadership transition and further consultation and engagement to develop the right model. In the interim, an incremental budget model was designed for FY 2023-24 and is currently in place. Concepts such as Tuition Sharing arrangements were introduced as part of this model and will be considered in the new model.
The Budget Model 2.0 design process was relaunched over the past few months, and will be implemented for Fiscal Year 2024-25. We are committed to engaging across the university to design a model that is capable of supporting the university in achieving its goals.
A core part of the engagement approach is a series of five Expert Working Groups. The Expert Working Groups will provide dedicated forums for stakeholders to provide their expertise and input to inform key budget model design choices.
Each Expert Working Group will be chaired by either the Provost or the Vice-President (University Services and Finance) and a selected Vice-Chair. The membership of the groups ensures representation across all colleges, faculties and portfolios, with support from Resource Planning. The groups will meet three times between January and March 2023 and culminate with recommendations to the Budget Model 2.0 project team.
The new budget model will be developed by July 2023, with time for us to prepare for its implementation in October 2023.
We will be engaging regularly with key groups
The Budget Model 2.0 project team will engage regularly with key stakeholders including the President’s Executive Committee, Statutory Deans’ Council, Chairs’ Council, Senior Administrators, Finance Partners, and key governance bodies to update on progress and solicit feedback. The model will go forward for discussion and support to PEC-S, the Academic Planning Committee, General Faculties Council, the Board Finance and Property Committee, and the Board of Governors.
We are open to your questions and feedback
We are creating channels for all members of the university community to provide input and feedback for consideration during the process. Further details and information will be provided in the coming weeks.
To submit questions about the Budget Model 2.0 project, please e-mail: budget@ualberta.ca
Verna Yiu, Interim Provost and Vice-President (Academic)
Todd Gilchrist, Vice-President (University Services and Finance)