August 30, 2018
Launch of budget modernization shadow year
Dear faculty and staff,
As the new academic year begins, we are taking the next steps in redesigning our university budget model by launching the shadow, or learning, year of our multiyear budget modernization initiative.
Traditionally, Kansas State University used an incremental budget model that allocated resources based on decisions from years, or even decades, in the past. Resources were not allocated with different units’ activity levels in mind and included no incentives for good management and decision-making. Also, units did not have transparent access to the costs associated with delivering the research, teaching and service missions.
Many other universities across the nation have faced similar situations with their budget models. The classic funding model for higher education has changed as a result of declining state funding and rising costs. In answer, other institutions have sought to modernize their approach to budgeting by implementing various versions of responsibility-centered management, or RCM, budgeting to incentivize growth, innovation and efficiencies in operations.
Today, after months of work by the Budget Core Executive Team, the Budget Modernization Steering Committee, and seven cost pools teams, and with consideration of survey feedback from members of the university community, we are beginning the next phase of modernizing our budget.
One of the key lessons learned from other universities is to take a year to study the newly designed budget model before beginning the implementation process with a shadow, or learning, year. As a result, FY 2019 will be our shadow year. The university will operate under our traditional incremental model while running the new model in parallel. During this year, we will gather feedback on the design and work to understand what tweaks are needed before the phased implementation beginning in FY 2020.
Our new model was developed after considerable research and consultation with other major land-grant universities who have transitioned to similar models. We worked to understand the lessons they learned in implementing their models and incorporated those into our design. Goals and guiding principles of the new budget model are based on our land-grant values.
The new model empowers colleges, departments and faculty to grow programs through entrepreneurial incentives to increase revenue and maximize resources and efficiencies. It also will bring a new level of transparency in the true costs of operations at the university, making support units more accountable for effectiveness and efficiency in their operations. Our new model is designed to illustrate that we are working together as one university for the common good. Together, we are all accountable for the success of Kansas State University.
I encourage you to attend an open forum at 9 a.m. today in Forum Hall at the K-State Student Union to learn more about the new model. You also can live stream the presentation and visit the project website to find more information, answers to frequently asked questions and helpful resources.
Throughout the year, please take time to learn more about the new model and how it can empower units to both grow revenue and better manage costs. Talk with your dean or vice president about how the new model will work in your unit and its potential impacts on budgets. Visit the budget modernization website to read the latest news and submit your questions and ideas to firstname.lastname@example.org. Your questions will be used to further develop FAQs and related communications.
It has been quite the journey to get to this point and I thank everyone whose efforts have contributed invaluably to this work. As always, I am proud of the way our Wildcat family comes together to address complex challenges to improve our university. I look forward to seeing the growth in excellence that will result from this initiative. Thank you for all you do!
Richard B. Myers
Kansas State University