University of Colorado Boulder is launching a redesign of its $1.9 billion budget in an effort to better weather economic storms, reflect the university’s mission and incentivize success and innovation.
The redesign is not a budget cut, Chancellor Phil DiStefano wrote in a letter to campus Wednesday. Campus leaders have been talking about the need to redesign the budget since 2018.
“While our current budget model has provided stability for the campus, especially pre-COVID, it provides little flexibility for new or evolving priorities or for responding to opportunities or crises that arise,” DiStefano wrote.
The pandemic has reinforced the need for a more flexible budget, DiStefano wrote.
“Through a budget redesign, we unlock the ability to strengthen our fiscal resilience, enable strategic investments in our people, programs and outcomes and strengthen our role and reputation as Colorado’s leading national public research university,” he wrote.
Goals for a new model also include transparency and fostering trust around decision-making, DiStefano wrote.
CU Boulder currently has an incremental budget model, which means there’s a base budget that rolls forward from year to year with new revenues added as they come in, Chief Financial Officer Carla Ho-a said.
The redesign will look at the process of how the budget is created as well as how it is structured, Ho-a said, by examining what’s going well and what might need to be changed.
One area to look at is the way budgets function in individual colleges, said Ann Schmiesing, executive vice provost for academic resource management. Deans, finance officers and shared governance groups have pointed out that college budgets often represent decisions made years or decades ago that might need to be reassessed.
“One example that’s been cited is that our current model might not foster interdisciplinarity and collaboration across schools and colleges,” Schmiesing said.
DiStefano also highlighted the need to “provide enhanced incentives to support and reward growth in key areas” and “promote and reward performance, success and innovation.”
What that looks like will be decided by students, faculty and staff, Ho-a said.
“We’re really intending this to be a highly engaged process, and some of the definitions around what is important to campus will be informed by those conversations,” she said. “We need to talk to faculty, staff and students about what is important to them and how do we design a budget model that supports that.”
Ho-a also reiterated that the redesign is not connected to budget cuts and is intended to be future-focused.
“We don’t want a budget that’s driving the answers to those questions of who we want to be and what we want to accomplish,” she said. “The budget model is a tool to accomplish those goals.”
Redesigning the budget doesn’t necessarily mean becoming less dependent on tuition revenue, which Ho-a described as dynamics that exist beyond the budget model. CU Boulder took a financial hit this year through a combination of reduced state funding and lower enrollment amid the coronavirus pandemic.
The redesign process will be guided by a strategic alignment committee and a design committee, DiStefano wrote, with an executive sponsorship group and external advisor. The committees will be formed in the coming weeks.
“This ensures that we can make data-informed decisions on how the new model might allocate resources within an ambitious timeline,” DiStefano wrote. “Our goal is to have a new budget model in place by fiscal year 2023.”