U.Va. adopts new financial model
President Sullivan announces plan to decentralize resource allocation decisions in 2013-14 fiscal year
The University announced yesterday that it will reorganize its financial structure in the 2013-14 fiscal year. The new internal financial model will decentralize financial decision-making, investing authority in individual departments.
In the current budget model, all decisions regarding resource allocation to the various branches of the University are overseen by President Teresa A. Sullivan, John Simon, executive vice president and provost, and Michael Strine, executive vice president and chief operating officer.
With the new plan, deans will decide how to allocate resources in the most efficient manner within their respective departments and propose a funding strategy to a central body, headed by Strine and Simon.
"The deans are in the best position to make such decisions and then lead the implementation," Simon said in an email.
Programs, classes and departments that give more resources back to the central body will be prioritized in fund allocation.
"The nature of the model is that revenues will flow to the activities that produce them, and they will flow back to central units that provide services based on services that they provide," Strine said.
"The new model will make all, deans faculty and others, more aware of our resource allocation choices including where we choose to subsidize programs whose nature or cost structure does not permit self sustainability though they add great value," he added.
By empowering deans to make decisions about spending within their departments, Simon hopes to encourage long-term planning and efficiency.
"It will inspire inclusive planning and empower individual academic units to be innovative and cost-efficient," Sullivan said in a statement.
Strine hopes increased innovation and efficiency will improve the quality of student education, as faculty members will be encouraged to be proactive within their department.
With ongoing reduction in state appropriations, increased enrollment and changes in senior leadership, this is the appropriate time for the new model, Strine said.
"We want to add value to the students we serve and teach, to the research and ideas that we create, to the patients that we care for and to the community service that our students and faculty and staff do, and do it in a context in which resources are scarce," he said.
Sullivan hopes the new system will alleviate financial pressures, which are unsettling University finances.
"In recent years we have seen increasing pressure on all of our revenue sources, and we expect that this pressure will continue to intensify in the future," she said.
New legislation has allowed the University to restructure its financial system in recent years, Strine said.
"Restructuring legislation gave universities greater authority and independence," he said. "We have greater authority over human resources, over our physical assets and financial assets. We can invest our own money"