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Fresh budget model in works

A decentralized-style budget may be utilized in FY ‘15.

In response to shrinking support from the state, administrators are exploring the idea of a budget model that will spread funds to each school, rather than being kept at the center of the university.

Since July, a 12-member task force made up of financial officers, staff, administrators and deans from the university have been looking into the concept of a decentralized budget, said Ken Kaiser, senior vice president for the office of management and budget.

The budget model puts more responsibility on individual schools, rather than the university as a whole when it comes to appropriating funds.

“The idea of a decentralized budget is that you’re trying to get the financial decisions closest to the action,” Neil Theobald, incoming president, said. “Rather than money being in the center at the president’s office or the provost’s office, you allocate the money out to the schools, so that the key financial decision making is going on at the school level.”

Theobald, the senior vice president and chief financial officer at Indiana University, has worked with the budget model at Indiana, which he said has had a decentralized budget for 20 years. While Temple’s next president has successfully managed the model at Indiana, members of the task force said the university has been looking into the system for more than a year.

Kaiser said the task force was commissioned during the summer by Acting President Richard Englert and added that the addition of Theobald to Temple has boosted efforts because of his experience with the system.

“This isn’t being done because Theobald was selected as president, he didn’t commission it,” Kaiser said. “It’s the good fortune of Temple that he [will be] the president because he’s pretty much an expert in this. We were going down the road and then he was hired which really boosted our ability to do this right.”

The model would allow Temple to better match up revenues and expenditures, Executive Vice President, Chief Financial Officer and Treasurer Anthony Wagner said.

“So right now, Temple’s budget model is pretty centralized,” Wagner said. “We make a lot of decisions about how resources are allocated centrally and the schools and colleges don’t have as much authority in that process as we believe they need to have.”

Theobald added that decentralized budgeting, compared to what Temple currently has, allows a university to be more efficient in how it spends money.

“If a school of engineering is going to hire a faculty member, they have much more information as to what are their needs than would the provost sitting in the center of the university,” Theobald said. “It’s simply a model of trying to be much more efficient, much more productive in the spending of our money, by having it allocated out to the schools, rather than a centralized budget model.”

The task force has been working with Indiana Bloomington’s Director of Budget and Planning Aimee Heeter and Senior Associate Vice President Doug Priest throughout the process. Kaiser said the two have come to Temple three times and, next week, members of the task force will be spending two days at Indiana.

“They’re the people who have done it here for years, so they’re just providing their experience and advice,” Theobald said.

Indiana’s longevity as a school with this budget model has allowed the task force to study how to implement it at a public university, Kaiser said.

“Because they’ve had decentralized budgeting longer than anybody else at a public university, they’ve been asked to help other universities for decades,” Kaiser said. “They’ve pretty much seen every model and they’re able to give us guidance.”

Kaiser added that Temple wouldn’t be simply copying Indiana’s system.

“We’re not taking Indiana’s decentralized budget model and bringing it to Temple, we’re going to have our own decentralized budget model,” Kaiser said. “Indiana is the oldest public university with a decentralized budget model so there’s a lot to learn.”

The task force is aiming to implement the model for fiscal year 2015, Kaiser said. He described the members of the task force as a “steering committee overseeing the implementation” of a decentralized budget, but said the members wouldn’t be the sole people pushing the model.

“The steering committee is just going to help manage the process,” Kaiser said. “This is going to be an implementation driven by the entire university community and if it’s not driven by the entire community, it won’t be successful.”

While the process is still a while from implementation, Theobald said he is very interested in seeing the model at Temple.

“Like any process you’ve got, it has to fit where you are, but I have great interest in doing that and I think there’s great interest on the part of the faculty and the deans as well,” Theobald said.

Sean Carlin can be reached at sean.carlin@temple.edu or on Twitter @SeanCarlin84. 

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