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 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 Coordinator, 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
- 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
- Karen B. Morris , Interim Dean, Honors College
- Kenneth Holford, Dean, College of Engineering and Sciences
- Kimberly Thomas, Associate Vice Chancellor, Business Services
- Laurie Brookhart, Senior Accountant, SAP Liaison, Accounting and Budget Services
- LaVada U Taylor, Associate Professor, School of Education and Counseling
- Lisa Hopp, Dean, College of Nursing
- Maja Marjanovic, Director, Research and Sponsored Programs
- Masoud Fathizadeh, Professor, Engineering Technology
- Niaz Latif, Dean/Executive Director CMEC, College of Technology
- Noel Michael Keeble, Chief Financial Officer, Student Government Association
- 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