Resource allocationResource allocation

Resource Allocation TechniquesResource Allocation TechniquesCentralisationCentralisationDecentralisationDecentralisationBudget PoliciesBudget Policies Implementation/transitionImplementation/transitionReporting, MonitoringReporting, MonitoringCase: University of BotondaCase: University of Botonda

RESOURCE ALLOCATIONS RESOURCE ALLOCATIONS TECHNIQUESTECHNIQUES

1. Across the Board (exceptions)1. Across the Board (exceptions)

2. Differential cuts for differing units2. Differential cuts for differing units

3. Cut across evenly and add back differentially3. Cut across evenly and add back differentially

4. Vertical cuts4. Vertical cuts

5. Selective allocation5. Selective allocation

6. Market driven approach6. Market driven approach

7. Functional budgeting7. Functional budgeting

8. Zero base approach8. Zero base approach

9. Enrolment or any formula-based method9. Enrolment or any formula-based method

SCIENCE Fiscal year ending March 31st $B 1,000,000 Less Cutbacks: 1) Organic Chemistry Position

Currently Vacant (Assoc) 25,000 2) Physical Geography (Prof) 30,000 3) Botany Position (9 months) 20,000 4) Field Trips 4,000 5) Travel 5,000 6) 2 Assistant Lab. technicians 16,000

90% of previous year $B 900,000 Plus Addbacks: 1) Inflation Factor 20,000 920,000 2) Field Trips 4,000 924,000 3) Botany Position (9 months) 20,000 944,000 4) Physical Geography (Prof) 30,000 974,000 5) 2 computers 6,000 980,000 6) Organic Chemistry (Lecturer) 20,000 1,000,000 7) 10 computers (Computer lab) 30,000 1,030,000

Proposed Budget coming year $B1,030,000

RESOURCE ALLOCATIONS RESOURCE ALLOCATIONS TECHNIQUESTECHNIQUES

10. My favourite - ALL OF THE ABOVE10. My favourite - ALL OF THE ABOVE

DECENTRALISATION DECENTRALISATION DEFINITIONDEFINITION

Distribution of the administrative Distribution of the administrative powers or the functions of (a central powers or the functions of (a central authority) throughout local or authority) throughout local or regional divisions, branchesregional divisions, branches

CENTRALIZATIONCENTRALIZATIONTotal control in limited handsTotal control in limited handsLess University politics involvedLess University politics involvedEase of decision makingEase of decision makingBetter ability to manage Better ability to manage

reorganizationreorganizationOutsiders will view the University as Outsiders will view the University as

in controlin control

DECENTRALISATIONDECENTRALISATIONBENEFITSBENEFITS

Deans and Managers can be held Deans and Managers can be held accountable.accountable.

Deans and Managers are best placed to Deans and Managers are best placed to make local decisions.make local decisions.

Deans and Managers can and will manage. Deans and Managers can and will manage. In fact, they like it.In fact, they like it.

The University likely gets the best value for The University likely gets the best value for the money.the money.

Promotes empowerment, quality and higher Promotes empowerment, quality and higher morale.morale.

Has a positive effect on the budget.Has a positive effect on the budget.

MIX OF CENTRALISED AND MIX OF CENTRALISED AND DECENTRALISED EXAMPLEDECENTRALISED EXAMPLE

CENTRALISED:CENTRALISED:

1)1) Position Control Position Control for all permanent for all permanent continuing continuing positions.positions.

2)2) Block funding for Block funding for operating operating expenses.expenses.

DECENTRALISED:DECENTRALISED:

1)1) Hiring, left to the Hiring, left to the department.department.

2)2) Department Department chooses where to chooses where to spend for spend for operating operating expenses.expenses.

Budget Policy/StrategyBudget Policy/Strategy

1- All expenses controlled centrally1- All expenses controlled centrally 2- Supplies are decentralised as well as 2- Supplies are decentralised as well as

the related deficit or surplusthe related deficit or surplus 3- Travel and supplies are decentralised 3- Travel and supplies are decentralised

as well as related surplus/deficitas well as related surplus/deficit 4- All expenses decentralised (except 4- All expenses decentralised (except

benefits) and related surplusbenefits) and related surplus 5- Everything decentralised5- Everything decentralised 6- Same as 5 with a tax on surplus6- Same as 5 with a tax on surplus

Budget Policy/Strategy1 2 3 4 5 6

Salaries

Benefits

Travel

Supplies

Surplus

Deficit

Central

Faculty/department/admin unit

tax

Implementation strategyImplementation strategy

Will for implementationWill for implementationDefine goals of the institutionDefine goals of the institutionChoose appropriate budget methodChoose appropriate budget methodExisting governing structureExisting governing structureRepresentationRepresentationAvoid imposition by governmentAvoid imposition by governmentSchedule of timingSchedule of timingApproval processApproval process

Implementation/ transitionImplementation/ transition

CommunicationCommunicationSupportSupportPolicies and proceduresPolicies and procedures Information systemsInformation systemsTrainingTrainingReporting and monitoringReporting and monitoring

CommunicationCommunication

Provide background informationProvide background information Identify the issuesIdentify the issues Sell the problem before the solutionSell the problem before the solution Explain the process that will lead to a Explain the process that will lead to a

formulation of the possible optionsformulation of the possible options Keep the community appraised of progress Keep the community appraised of progress

mademade Seek support from University CouncilSeek support from University Council Explain implementation strategyExplain implementation strategy

SupportSupport

Planning at unit levelPlanning at unit levelAccountabilityAccountabilityPolicies and proceduresPolicies and proceduresControlsControls Information systems, who needs Information systems, who needs

what, examples of management what, examples of management reportsreports

Help lineHelp line

COMPUTERISED SYSTEMSCOMPUTERISED SYSTEMS

Student Information

System

Human Resources &

Payroll

OtherSub-systems

Budget

FinanceSystem

ManagementReports

COMPUTERISED SYSTEMS COMPUTERISED SYSTEMS Contd.Contd.

Sub Systems – interfacesSub Systems – interfacesPhysical PlantPhysical PlantScience StoresScience StoresPrint ShopPrint ShopMail RoomMail RoomTelephonesTelephonesMany othersMany others

Reporting, Monitoring Reporting, Monitoring

Take a snapshot of financial data at a Take a snapshot of financial data at a particular point in time ie. 6 months particular point in time ie. 6 months into the fiscal yearinto the fiscal year

Forecast the needs to the end of the Forecast the needs to the end of the fiscal yearfiscal year

Evaluate forecasted positionEvaluate forecasted position

1 2 1+2=3 4 4-3=5Actual Projections Annual Annual Variance

to 1/1/ Projection Budget surplus31/12 to 31/03/ to 31/03/ to 31/03 (deficit)

Salaries:

Faculty (1) 270,000$ 75,000$ 345,000$ 360,000$ 15,000$ Administrator (2) 34,000 12,000 46,000$ 48,000 2,000$ Clerical (3) 8,000 8,000 16,000$ 32,000 16,000$

312,000$ 95,000$ 407,000$ 440,000$ 33,000$ Beneffits 20% of salaries 72,000$ 21,800$ 93,800$ 99,600$ 5,800$

Other Expenses:

Travel (4) 6,000$ 2,000$ 8,000$ 10,000$ 2,000$ Supplies 19,000 7,500 26,500$ 25,000 (1,500)$ Photocopying 8,500 4,000 12,500$ 12,000 (500)$

33,500$ 13,500$ 47,000$ 47,000$ -$

Total for Department 417,500$ 130,300$ 547,800$ 586,600$ 38,800$

Notes:

(1) 3 months' savings from Dr. Away's sabbatical starting 01/01 to 31/03

(3) New administrator started April 20 - 3 weeks' salary savings

(4) This new position was not filled until Ocober 1

(5) Chair to attend SUMA in February

DEPARTMENT X - FINANCIAL PROJECTIONS TO MARCH 31

Case: University of BotondaCase: University of Botonda

Part 1: Describe the process, Part 1: Describe the process, methodology resource allocation methodology resource allocation techniques, decentralisation vs techniques, decentralisation vs centralisation, funding models and centralisation, funding models and budget policies helpful to address the budget policies helpful to address the financial predicament at UofBfinancial predicament at UofB

Part 2: Present your findings to the Part 2: Present your findings to the Finance CommitteeFinance Committee