Your questions are vital to this process. Below is a list of frequently asked questions and their answers. We have organized them by category. If you can’t find the question that’s on your mind, use the form on this page to contact us. We will continue to update this page as there is new information to share.
Virginia Commonwealth University’s current budget model relies primarily on incremental changes to past year allocations. Major academic units and central support units generally see small changes to their base budget each year.
Our redesigned budget model will create a clear connection between the revenues a unit generates and its budget. It will ensure that central support units have the resources they need to deliver high-quality services, and will enable them to benchmark their efforts against standards they help to establish. The central costs of the university will be distributed across units using a set of metrics.
The redesigned model and budgeting process will enable VCU and its many units to engage in longer-range planning. The university will be better able to invest resources in strategic priorities, such as financial aid, faculty and staff development, and community-university collaborations.
At its heart, our redesigned budget model and process will reflect our mission and core values. It will be one tool we use to accomplish our goals. You can expect the new model will:
Not much initially. The redesigned budget model and process will be implemented gradually. Currently, the universitywide task force and steering committee are making initial recommendations for the new model. In 2017-18, VCU will continue to operate under the current budget model, and a preliminary version of the redesigned model will be used to produce comparative information. This information will be shared with unit leaders, faculty and staff. This will enable everyone to see how much revenue generated by each unit along with their share of the university’s costs. Changes will be made to this preliminary model if we discover significant issues we didn’t expect. We also will develop a process for regularly reviewing and revising the model after this initial period. The following fiscal year, 2018-19, the redesigned budget model will be used. During this year, all units, both revenue generating and central support, will be kept in a “steady state.” Their budgets will be adjusted to maintain their funding at the previous year’s level.
Similar to most institutions that redesign their budget model, a primary goal is to provide more accurate and transparent information about revenues and expenses. Work to date by the universitywide task force includes some elements that appear in RCM-type models and other elements that do not. VCU will have a hybrid budget model that incorporates best practices customized to fit VCU’s priorities, needs and values. VCU will not adopt an approach that would require units to be self-sufficient.
The redesigned budget model will show the flow of funds throughout the university more clearly, as well as to and from units. It will ensure that units receive more funding when they generate more revenue, such as by teaching more students. It will allow units to have more control over their resources over time. And, the university will be able to invest resources strategically where they are needed most or could have the biggest impact on our mission.
The greatest change will be a reduction in uncertainty. Units will be able to predict how changes in their programs, enrollment and operations will impact their budgets in the years ahead.
Central support units generally provide universitywide benefits and services that support the university’s mission, although they are not anticipated to produce sufficient revenue to substantially offset their expenses. This is unlike revenue units, including the schools and the college, that generate significant revenue flows relative to their expenses.
The 14 schools and college are “revenue units” because they generate significant tuition and fees relative to their expenses. These include: Allied Health Professions, Arts, Business, Dentistry, Education, Engineering, Humanities & Sciences, Life Sciences, Medicine, Nursing, Pharmacy, Social Work, L. Douglas Wilder and the University College.
The University Budget Redesign initiative began in 2014 and will be carried out over several years. Full implementation of the final model will occur in 2019-20.
The University Budget Redesign is occurring in several phases. Please visit the Timeline page for more information about where we are now and how you can be involved.
President Rao charged the steering committee with guiding the redesign. As of December 2016, the universitywide task force has developed recommendations about major elements of the model. The steering committee will solicit input from the university community, review and act on these recommendations, and submit a final report of its decisions to the president.
No. Salary increases will be handled under existing policies. The redesigned budget model and process will give deans and unit leaders better information about the funding available for all purposes, including compensation decisions.
Yes. In FY19, the redesigned budget model and process will be implemented. During this year, all unit budgets will be maintained in “steady state,” where adjustments will be made to bring revenue and central support unit budgets to FY18 levels. Full implementation of the redesigned model is planned for 2019-20.
No, there will be no budget cuts related to the implementation of the model. The initial implementation in FY18 will be for informational purposes only. Units will continue to be funded under the current budget system and at current levels. Unit leadership and business officers will be provided data showing how the current budget compares with the results that would come from the new model. The new model will be fully implemented the following year, FY19, as a “hold harmless” or “steady state.” Adjustments will be made to bring revenue and central support unit budgets to FY18 levels provided there are no significant changes in state appropriations. Should there be significant changes in state appropriations, university leadership will determine how to respond, as in the past. These decisions will be made independent of the implementation of the new budget model.
No. The university’s budget model, whether current or revised, does not change the total amount of funding available. It only helps to show and determine how revenues and costs are generated across units. The revised model aims to incentivize units to generate new revenue and control expenses. Under both conditions, a unit will see an increase in available funding.
No. Decisions regarding program start-up, change and closure remain with unit and university leadership. The budget process and model are tools that support strategic decision-making and planning.
Unit leaders (deans/directors/vice presidents) remain responsible for decisions regarding faculty and staff hiring and compensation. The redesigned budget model and process will give them better information about the funding available for all purposes, including personnel actions. The Great Place: HR Redesign will enhance the ability of supervisors and unit leaders to effectively manage personnel in their areas. Learn more at the Great Place: HR Redesign website.
The Budget Redesign will not change the indirect cost rate charged for sponsored projects. Seventy percent of the indirect cost recovery funds (FACR) will be returned to the home unit for the grant or contract, with 30 percent retained by the university as required under state law. Unit leaders remain responsible for determining how FACR is used in their units, including any decision to distribute any funds to the investigator.