Budget Model Principles

Priority of Academic Needs

Reinforcing this continues to be paramount. In the previous model faculties were spending their budgets delivering administrative activities, not core teaching and research. This principle does not mean that faculties getting less is a bad idea. Instead, this means that the new model will ensure that college and faculty resources are directed towards teaching and research, rather than administrative activities, and that professional services actively support colleges and faculties to achieve the academic mission.


Under the previous budget model, faculties were allocated a proportionate share of the grant based on teaching and research activity. While it was formulaic, it was not transparent because faculties had no way of predicting how a change in their teaching or research activity impacted the actual base operating budget. The new model needs to more clearly tie activity to budget allocation so that faculties are incentivized to pursue enrolment and research growth. It also needs to clearly show where the allocated budget comes from in order for faculties and staff to plan more strategically.


Under the previous budget model, the allocation of the Campus Alberta Grant (now the Operating and Program Support Grant) was based on historical cost structures in the faculties and historical expenditures of central portfolios. Units and faculties have come to rely on the funding they have been given, and feel entitled to this funding. The new model needs clear accountability mechanisms that ensure central support portfolios, colleges and faculties, are delivering on outcomes and this means including some form of performance-based funding aligned with institutional goals.


The design of the previous budget model includes numerous different allocation rules depending on where the funding is coming from. It also includes a complex weighting formula (the Basic Revenue Unit) to allocate the grant for teaching. Because of the numerous rules, and the fact that the grant was then proportionately shared out, it made it very difficult for faculties to determine how a change in their activity would result in a change in their budget. The model and its incentives need to be simple and easy to understand so that units can promptly act on the incentives the model creates.

Consistency and Predictability

While the formulae of the model were applied consistently across faculties, the previous budget model leaves portfolios and academic units overly exposed to funding shocks - like that which the university experienced over the last three years. It also limited the capacity to conduct long-term planning towards university goals, with planning dominated by year-on-year changes in government grants. The new model needs to break that cycle, and ensure the ability to moderate the impacts of funding fluctuations into the future.


To realize the One University vision, the budget model accounts for equity in resource allocation, which accounts for variations in circumstances and needs across units. Equity as a principle is grounded in justice in resource allocation, which understands that not all circumstances are the same in getting to our desired achievement as One University. Equity requires that different treatments are considered and enacted to address the inequalities of privilege, dominance, and marginalization. Equity as a principle demonstrates the commitment to the One University vision, focusing on working together to benefit teaching and research outcomes.


This reflects the One University vision, and ensures that mechanisms in the budget model do not unintentionally inhibit collaboration, and instead, encourage it. It also means that the budget model should encourage resource allocation decisions that serve the entirety of the university rather than any individual portfolio, college or faculty in isolation.


It is critical that the budget model ensures that the university is able to deliver on the institutional goals. This includes ensuring that there is sufficient funding for strategic initiatives and that the model creates the right incentives with respect to enrollment growth and research.