As part of PNW’s strategic reassessment initiative, we are creating a new incentive-based budget model to best support our core mission and strategic priorities. This budget model is an effective tool for addressing our current challenges and will help secure the university’s long-term financial health.
A New Approach to Budgeting
PNW’s current budget process was constructed in a different era and is not sustainable. We currently allocate resources on the basis of the previous year’s budget, plus or minus a percentage. This approach is predictable, but makes it difficult for us to adapt to changing circumstances or fund strategic priorities.
An incentive-based budget model provides individual units with incentives to achieve a positive financial performance. Each unit has greater control over the revenue they generate and costs they incur. Ultimately, this budget model allocates resources to activities that advance the University’s long-term strategic vision.
Incentive-Based Budgeting Guiding Principles
- Advance the university’s mission through a greater alignment between financial resources and university priorities.
- Enhance the student learning experience.
- Feature incentives that promote entrepreneurship, innovation and collaboration within and across disciplines.
- Provide a consistent and fair methodology for revenue and cost allocation that is simple and easy to understand.
- Promote authority, responsibility, and accountability, both locally and university-wide.
- Provide transparency, clarity and predictability.
Incentive-Based Budgeting Benefits
- Links resources with strategic priorities.
- Provides incentives to grow revenues and reduce costs.
- Aligns authority and accountability at the unit level.
- Heightened financial awareness.
- Greater financial flexibility and improved responsiveness to change.
Incentive-Based Budget Model Centers
Accountability Centers generate revenue. These centers are responsible for direct costs and their share of Service Center’s cost.
- College of Business
- College of Engineering and Sciences
- College of Humanities, Education, and Social Sciences
- College of Nursing
- College of Technology
- Gabis Arboretum
- Dining Services
- Printing Services
- Recreation and Fitness Center
- Sinai Forum
- Water Institute
- Student programs (student fees)
- Small Business Development Center
- Commercialization & Manufacturing Excellence Center
- Center for Innovation through Visualization & Simulation
- Energy Efficiency & Reliability Center
- Center for Cybersecurity
- Parking and Transportation Services
- Continuing Education (Full cost recovery)
- Online Programs (Full cost recovery)
- Administrative Services
- Chancellor’s Administration units
- Institutional Advancement units
- Finance and Administration units
- Information Services units
- Academic Services
- Academic Affairs Administration units
- Honor College
- Graduate School
- Office of Research
- University Libraries
- Student Services
- Student Affairs and Enrollment Management units
Incentive-Based Budgeting Timeline
- Kickoff meeting: Taskforce training
- Develop and adopt guiding principles
- Budget working group established
- Initial Framework presented to Senior Leadership Team
- Create a communication plan
- Run simulation model on FY2019
- Test various alternatives and scenarios
- Submit final recommendations to Senior Leadership Team
- Preparation to run the new model parallel with the existing budget model (FY2021)
- Promote understanding
- Seek feedback and input from stakeholders
- Develop model governance structure
- Develop an implementation plan
- Offer model training
- Monitor the parallel model for accuracy and impact
- Appoint a budget model advisory committee to monitor progress
- Prepare for FY2022 implementation
- Implementation FY2020
Incentive-Based Budgeting Task Force
- Amy Hemingway, Development Operations Manager, Institutional Advancement
- Anthony Elmendorf, Professor Mathematics, Mathematics, Statistics & Computer Science
- Beth A. Vottero, Assistant Professor, College of Nursing
- Dawn Pollock, APSAC Representative, Administrative/Professional Staff Advisory Committee
- Elaine Carey, Dean, College of Humanities, Education & Social Sciences
- Elizabeth Depew, Director, Managerial Accounting
- Geoffrey Schultz , Professor Education, School of Education and Counseling
- George Kacenga , Executive Director, Global Engagement
- James Russel Schooley, President, Student Government Association
- Jane Mutchler, Dean/Professor of Accounting, College of Business
- Jonathan Swarts, Associate Vice Chancellor, Academic Affairs
- Joy Colwell, Interim Vice Chancellor, Enrollment Management & Student Affairs
- Kenneth Holford, Dean, College of Engineering and Sciences
- Kimberly Thomas, Associate Vice Chancellor, Business Services
- Laurie Brookhart, Directot of Financial Accounting, Accounting and Budget Services
- Lisa Hopp, Dean, College of Nursing
- Maja Marjanovic, Director, Research and Sponsored Programs
- Masoud Fathizadeh, Professor, Engineering Technology
- Michael Lynn , Interim Dean, Honors College
- Niaz Latif, Interim Vice Chancellor, Academic Affairs and Provost
- Paul McGrath, Department Head/Professor, Political Science, Econ & World Languages & Cultures
- Rick Costello, Director, Athletics
- Rose A. Haite, Chair, Clerical/Service Staff Advisory Committee
- Russ Mulligan, Clinical Assistant Professor, College of Business
- Scott Iverson, Executive Director, Housing and Residential Education
- Stephen Turner, Vice Chancellor, Finance and Administration
- Thomas L. Keon, Chancellor, Chancellor
- Timothy Winders, Vice Chancellor, Information Services