Joint Task Force on Resource Allocation (JTFRA)

11/26/13

Attendees - Tim Anderson (co-chair), Elizabeth Chilton (co-chair),Bryan Harvey, Andrew Mangels, Ernie May, Julie Brigham Grette, Megan Kingston, Yemisi Jimoh, Laura Briggs, Debbie Gould, Amilcar Shabazz, Julie Buehner, Mari Castaneda, Nancy Cohen, Jennifer Normanly, Tim Sutton, Patrick Kelly, Tony Butterfield, MJ Peterson, Stephen Cavanaugh, Mike Malone, Mark Fuller, Glenn McLaurin(Huron) and Maggie Burger (Huron)

After introductions, discussion began with the charge of JTFRA – to providethe Chancellor witha recommendation (if deemed necessary) of a new budget model. The need to consider a new budget model emerged from the JTFSO document last spring. There is a desire for both increased transparency and for a resource allocation methodology that reflects the values of the university. A new budget model, such as incentive-based or values-based budgeting (including RCM) could provide this for the university. There was a general discussion of the main differences between incremental budgeting (what we currently have), formula-based budgeting, and incentive-based budgeting. The latter is ideally more decentralized and iterative (i.e., not strictly formula based).

This Joint Task force is advisory to both the Chancellor and the Faculty Senate (see Faculty Senate document with the charge of the committee here). A new budget model that results in policy changeswould need to be considered and approved by the faculty senate and the Program Budget Council before adoption by the campus. The campus has engaged Huron Consulting Group to assist in the development and evaluation of various budget models. Huron will address JTFRA at its meeting on December 18th.

Discussion followed around RCM and benefits/challenges of this type of model.

What Could be Gained from New Budget Model

  • More transparency and more decentralization.Reduces guessing at how decisions are made and resources allocated.
  • Increased knowledge of revenue sources, efficiency, and freedom to pursue best direction for your academic unit.
  • Alignment of planning and resources.
  • Empowerment of Deans to pursue their vision.
  • Improved efficiency of administrative costs if transparency is increased.
  • A reevaluation of where decisions are made.
  • Ability to “forward-plan” the budget.
  • More direct rewards for entrepreneurial efforts.

Challenges of a New Model

  • Transition can be difficult and take time to reap benefits.
  • Incentives it creates could be in conflict with the institution’s values.
  • Is no substitute for sound leadership and decision-making at senior management levels.
  • Can be difficult to implement in stressful economic times when state budgets are being cut.
  • Can result in duplication or decentralization of administrative services with loss of controls.
  • There was discussion of the potential problems that could arise from pushing a strict formula-based RCM model down to the Departmental level.

What is required to be successful

  • Good data and a shared understanding of values and priorities.
  • Established criteria of what defines “success.”
  • Strong academic leadership using the data to inform the process of balancing among conflicting values.
  • A structured and robust communication plan.
  • Learning from people who have been through a transition to RCM (both bad and good).
  • Choosing the right model for UMass.
  • Ongoing reevaluation and maintenance.

What is Working Well with our current budget process?

  • It provides a baseline expectation of stability in some but not all departments.

What are the challengesof our current budget process?

  • Academic units often experience enrollment changes or programmatic demands that are beyond their control with little additional funding to meet the increased costs.
  • There is a lack of transparency around how decisions are currently made. Unit heads spend time trying to guess at what are successful strategies used to get resources.
  • Creates pressure to out-compete rather than collaborate.
  • Makes planning for the future difficult.
  • Lacks stability and predictability when leadership changes.
  • Incentives that currently exist don’t always trickle down to the departments.

A website will be created for the committee in order to both communicate with the campus community about the process and issues, but also as a way to compile comparative information. One such example is a report prepared for the Univery of Berkekely in 2008.

Next meeting – December 18th,, 2:30 PM, with Chancellor Subbaswamy and Huron Associates.