to support wsu’s mission, to drive growth to infuse accountability 1

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Refining MDA

To Support WSU’s Mission, To Drive Growth

To Infuse Accountability

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MDA StE Committee

• Joanne Li, Chair – Dean RSCOB• Dan Abrahamowicz – VP Student Affairs• John Bale – Associate Dean BSOM• Barb Bullock – AVP, Institutional Research• Cassie Dorsten – Finance, Lake Campus• Ryan Fendley – Office of the Provost• Dan Krane – Faculty President, COSM• Suganya Sundaram - BPRA• Kristin Sobolik – Dean COLA

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Charge to the Committee

• Provost established the MDA Committee

• Charge:– Align with guiding principles– Identify issues (both real and perceived) – Develop recommendations

• Determined:– Old model replete with issues– Easier to develop new model from scratch

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A Moment of Pragmatism

• No model is a panacea• Iterative process• Continual monitoring for

unanticipated impacts• Commitment to resolve such issues

without penalty to impacted units

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Core Goal and Elements

• Core Goal:– Growth based on quality academic

innovation

• Fundamental Elements:– Easy to understand and transparent– Provide flexibility– Support accountability for performance– Incent calculated risk-taking– Drive growth consistent with our mission

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Growth Imperative

• Ohio Workforce– Education key to growth– Fewer HS graduates, more non-

traditional students

• Raider Country Revitalization– First-generation college– Re-tooling career paths

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Model Taxonomy

• Academic Unit: A college or school– BSOM, CONH, COLA

• Auxiliaries: Revenue Potential– Bookstore, Hospitality Services, Nutter

Center

• Support Unit: No Revenue Potential – Physical Plant, Admissions, General

Counsel

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Performance & Accountability

• Academic Units:– Performance measured relative to targets– Unit flexibility for investment and growth

• Auxiliaries:– Expectation for aggregate net revenue, after

transformation

• Support Units:– Alignment with mission, accountable to

customers (i.e. students, academic units, administration)

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Growth Enablers

Endowment(Advancement)

Extramural Funding(Research)

Enrollment(Academic Programs)

Included? No Yes (F&A only) Yes

Rationale Restricted, Variable timing

Raises portfolio, key recruitment and

retention toolKey to growth

Incent mission consistent growth

N/A Yes Yes

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Units Supporting Growth

Academic Auxiliaries Support Units

Included? Yes Post-Transition - Yes Yes

TreatmentAll unit revenues

and direct expenses included

Excluded while being restructured to

revenue neutral/positive

All revenues and direct expenditures included

RationaleEmpower quality

innovation of sustainable programs

Initially Managed outside model, Goals:

quality service, minimizing aggregate

subsidy

Net expense key component of

University sustainability

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The Model

• A Performance Based Budget Model–With involvement of all constituencies

will:• Establish accountability and transparency• Define performance metrics for all units –

and connect funding to those metrics• Empower and incent innovation and

investment at the unit level for each unit across the university

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The Model: Academic Units

• No Academic unit starts “in the red’ or “in the black”

• Provided a revenue target and a budget

• Achieving revenue targets within provided budget ensures continuity of resources

• Exceeding revenue targets within provided budgets maximizes resources available to units to support growth

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The Model: Academic Units

• First growth target: return to revenue level equal to 5-year best (2009 – 2013)

• Budget: Equal to actual unit expenses in the year highest revenue level achieved

• Growth beyond revenue targets returned to unit following a formula

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The Model: Academic Units• Unit revenue target will have two components:

– X = base revenue target– Y = “stretch” revenue target (X*1.09)– Y-X = strategic investment– Y-X pool is shared between unit and central administration

• Additionally, if unit generates more than Y they receive 70% of any incremental revenue

• During viability stage latitude is provided with clear metrics and timeline for reassessment of initiative including:– Quality, relevant need, sustainability

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The Model: Academic UnitsCEHS

5 Year High Revenue Baseline +/- Investment

$34,929,270.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$29,759,753.00

-$5,169,517.00 $250,000 (P#) to grow to $31.5M (for FY 16)

CONH5 Year High Revenue Baseline +/- Investment

$19,599,214.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$16,506,692.00

-$3,092,522.00 $150,000 (P#) to grow to $18.5M (for FY 16)

SOPP5 Year High Revenue Baseline +/- Investment

$4,944,115.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$4,662,896.00

-$281,219.00 $120,000 (P#) to grow to $5.1M (for FY 16)

*: Investment shown, and associated growth target is only an exampleP#: Indicates central investment

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The Model: Academic Units*: Investment shown, and associated growth target is only an exampleP#: Indicates central investment

LAKE5 Year High Revenue Baseline +/- Investment

$9,335,348.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$8,415,505.00

-$919,843.00 $200,000 (P#) to grow to $9.3M (for FY 16)

SOMD5 Year High Revenue Baseline +/- Investment

$39,267,198.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$34,616,500.00

-$4,650,698.00 Based on growth goals

CECS5 Year High Revenue Baseline +/- Investment

$34,574,201.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$34,574,201.00

$0.00 Based on growth goals

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The Model: Academic UnitsRSCOB

5 Year High Revenue Baseline +/- Investment

$29,714,541.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$29,608,287.00

-$106,254.00 Based on growth goals

COSM5 Year High Revenue Baseline +/- Investment

$45,665,009.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$45,350,585.00

-$314,424.00 Based on growth goals

COLA5 Year High Revenue Baseline +/- Investment

$54,681,110.00

$0.00 Based on growth goals

2013 Actual Revenue Baseline +/- Investment*

$52,873,834.00

-$1,807,276.00 Based on growth goals

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The Model: Academic Units

• While a unit may currently be below its baseline, it is not “in the red”.– If it exceeds its base revenue target it

can still benefit as discussed on slide 15

• Size of investment and associated growth expectation is situation specific– Consider many factors: unit, initiative,

type of resources needed, etc.

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The Model: Support Units

• For modeling purposes support costs apportioned in the aggregate (one rate)

• Academic Unit participation in metric establishment and evaluation critical– Changes the conversation from:

• “I don’t use it because I have my own.” • to• “I’m not getting the service that I need and

we need to fix this”

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The Model: Support Units• Presidential mandated review of all support units• Coordinated by Provost’s Office and inclusive of all

constituencies who are (or should be served) by the unit

• Focus of that review – three phased:– What services does the university need the unit to

provide?– What metrics measure that service provision?– Based on benchmarking peer institutions what are

appropriate budgets to deliver the desired level of service?

• Begin 2015

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Implementation

• Pace of growth not expected to be same for all. Targets set in collaboration with each unit.

• Have developed a ladder strategy that provides a base, with an infusion of year-to-year funds, to achieve a revenue target.

• Once achieved – year-to-year funding converted to base.

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Next Steps• Continue to share concept, gain feedback, make

adjustments;

• Fiscal infrastructure is testing model to identify potential fiscal issues;

• Use FY 2015 to tweak initial step on ladder and get University community educated as to how this works, and what it means.

• Prepare for conversion to this model in 2016.– Monitoring for unintended impacts;– Mitigating those that are undesirable without penalty to the

impacted unit

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Discussion

• Questions About the Concept?