8 Ways UC Davis Seeks to Transform Budget Process

UC Davis is hoping to generate more funds as the entire UC system faces a grim financial picture. They are changing the budget model mainly by incentivizing the process so that more funds are generated by the current revenue sources and so that new sources are identified. 

“The ultimate goal will be to keep the entire campus community more tightly focused on our shared vision of advancing UC Davis into the top tier of public research universities,” said Executive Vice Chancellor Ralph J. Hexter in a letter.

The financial picture throughout the whole UC system is bad, which has been demonstrated by multiple rises in tuition in recent years. The new budget approach aims to alleviate the financial problem. Here’s a bit of what Hexter had to say:

In general, an incentive-based budget model allocates revenues — such as tuition or indirect cost returns — directly to the units or activities that generate the revenue. This creates incentives for units to generate additional funds from existing revenue sources and to identify new revenue sources, all to ensure the most efficient and effective use of the resources. The model also employs a “tax structure” applied to those revenues. The taxes are used to fund the general infrastructure of the university and common goods and services such as the library or information technology that do not directly generate revenue. This type of budget model is widely viewed as more transparent and accountable, and greatly improves the campus community’s ability to understand the full cost of operations and activities.

The new budget process has eight main principles: 

1. Establish a sustainable funding model with incentives that advance the Vision of Excellence (i.e., the budget should promote rather than impede the university’s mission and goals).
2. Advance and encourage campus strengths and priorities such as interdisciplinary scholarship and internationalization, as well as boost economic development.
3. Be transparent, linking authority with accountability.
4. Be as simple as possible to understand, administer and implement; rely on common and easily available data sources.
5. Encourage creativity and responsible risk-taking while providing for reasonable reserves and oversight.
6. Balance local autonomy with a strong sense of unity in vision and values.
7. Provide mechanisms for investments for fresh ideas at all levels.
8. Provide for reasonable transitions and bridging strategies.

Visit Dateline UC Davis to read the full letter.