BY THE NUMBERS: The Office of the Provost has established a 2015-16 University Budget page, including copies of operating and capital budgets from this and previous years, budget presentations and supporting documents. Visit https://provost.uwo.ca/budget2015/.
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Schulich School of Medicine & Dentistry Dean Dr. Michael Strong spoke of a university of “haves and have-nots” a month ago, providing budget critics their most influential voice on the subject to date.
“What I am hearing from my faculty members is we have a broken system,” Strong said during the university Senate debate on an ultimately failed motion of non-confidence in Western President Amit Chakma. “We have a university that is polarizing itself. We have a university that is moving into haves and have-nots. We have a university that is moving to STEM (science, technology, engineering and mathematics) and non-STEM.
“The core values of what we appreciate, what we love about this university need to be addressed.”
That sentiment has not gone unnoticed by university budget planners, stressed Western Provost and Vice-President (Academic) Janice Deakin, as the university has taken unprecedented strides in its latest budget to buoy struggling faculties in choppy budget waters.
On April 23, Western’s Board of Governors approved the 2015-16 University Budget – representing the first year of a new four-year budget cycle.
The budget projects total revenue for the university at roughly $693 million (an increase of 1.6 per cent). Total expenditures amount to nearly the same, leaving a surplus of little more than $260,000. An operating reserve of almost $34 million is projected over the next four years – although that dwindles to $6 million by the end of the four-year cycle.
Deakin stressed 64 per cent of operating dollars go to Western’s 11 faculties. The average across Ontario is 57.9 per cent. For non-research, non-instructional expenditures, Western spends 28.5 per cent of overall expenditures. The provincial average is 35.5 per cent.
“Our mission is to drive our resources into the faculties, so they can deploy in the best way possible to educate students,” she said.
Despite that, all parties admit numerous factors are straining some faculties.
In the last five years, the government has funded growth in students and access. Simply stated, the number of students you attract equates to the number of dollars you get. At Western, that has been good for business, as student intake has increased over the last four years from 4,250 to 5,100.
That, along with other factors, contributed to an 8 per cent annual growth in revenue for a decade.
But that is starting to slide.
Government grants coming into Western are predicted to plummet by $1.7 million this year alone. In the following fiscal year, government grants will account for roughly 40 per cent, or $280 million, while tuition will contribute 47 per cent of the operating budget, totaling about $322 million. All other revenue sources will contribute 13 per cent, or $90 million.
That, essentially, locks down 87 per cent of the university’s budget. As tuition hikes were capped by the province, and enrolment hit its maximum capacity on this campus, revenue growth slowed to 4-4.5 per cent over the last four years. And now, the university is eyeing only 1.9 per cent growth in revenues in this budget.
“Herein lies the budget challenge,” Deakin said. “We are receiving less revenue now; the projections are we will continue to receive less revenue. Yet, our costs around doing business are increasing at a rate greater than 1.9 per cent. We have a challenge on our expenditure side because of limitations on our revenue side.”
This slowdown has impacted some faculties far more than others.
Across Canada and North America, the arts and social sciences are under siege. That is manifesting itself in a decline in the number of applications and first-year students in areas like the arts and humanities. Western has seen double-digit swings in predicted students entering versus actual numbers in some faculties.
“People are looking for ‘professional training,’ ‘being job ready’ – this is the language of government, this is the language we are hearing,” Deakin said. “As a result of some of that, we see students voting with their feet.”
Deans have been wrestling with the problem for some time, as they continue to look at a number of new revenue possibilities areas, including developing new programs to attract new students at graduate and undergraduate levels.
In an effort to address these concerns at the university level, more than $2 million was allocated to faculties in order to “keep them whole.” Among the allotments for 2015-16 were:
- $200,000 to Arts & Humanities to maintain teaching capacity;
- $200,000 to Health Sciences to accommodate enrolment/teaching pressures;
- $100,000 to Information and Media Studies to maintain teaching capacity;
- $57,375 to Law for staffing in its International Programs Office;
- $100,000 to the Don Wright Faculty of Music to maintain teaching capacity;
- $800,000 to Science in support of teaching expansion, research opportunities and new program development; and
- $800,000 to Social Science to accommodate enrolment/teaching pressures and support faculty-wide academic initiatives, including strategic investment in the Department of Economics.
“This is new this year. This level of allocation is in recognition of the pressure these faculties are facing,” said Ruban Chelladurai, associate vice-president (planning, budgeting and information technology). “It was a conscious decision. A lot of them say it is to maintain teaching capacity, responding to enrolment and teaching pressures as resources have gone down. They have the faculty there; they have to somehow keep funding these positions. That’s what this is all about.”
The future looks difficult, both admitted.
“The only way our revenue trajectory turns positive is by these other revenue streams we try to develop – professional education, professional masters education. This is the new normal,” Deakin said.
She continued, “As long as access is what is being funded, unless we choose to move to an entering class of six, seven, eight thousand students – which would fundamentally change who we are and what we can offer – we have got to find a balance. We are going to be in a more constrained fiscal environment for, at least, the next five years.”
Some critics have claimed the university’s budget model, in use since the early 1990s, is broken. The University of Western Ontario Faculty Association (UWOFA), for one, recently called for “a reformed budget model that appropriately funds all faculties of the university.”
Admittedly, Western’s budget model is unique. Budget planners define its model as a hybrid. The university constructs its budget around historic base allocations as well as a revenue-sharing model based on incremental student enrolment.
“The important piece for me is, our model deploys the highest proportion of our operating budget into the hands of the faculties – more than any of our sister research-intensive universities in Ontario,” Deakin continued.
In Canada, all U15 universities are currently using, or currently transitioning to, a responsibility-center management (RCM) budget model in which individual units are directly responsible for the revenues and costs generated within their operation, as well as their shared portion of service costs. That model, however, does not shed all central control, as a central pot is still required to subsidize certain faculties that cannot exist based on its own enrolment.
But the budget worries facing universities are more related to the overall climate, Deakin said, not any one particular budget model.
“I don’t think the budget model is broken,” Deakin said. “Any acceptable budget model won’t let you spend more than you have. We can make different choice about how we spend our money, but we are going to be constrained by not being able to spend more than our revenue said.”
The budget model was reviewed at the deans’ retreat last summer, and will be reviewed again this summer.
“Can we adapt our model? I think people don’t understand our model,” Deakin said. “In the context of looking at the budget, perhaps in terms of making it more understandable, more sensitive to concerns, there might be other ways we can organize without going to a full RCM model.
“But we will discuss again if an RCM model is best. If people feel that is more transparent, I am fine with that. It is complex, no matter how you do it.”
Adela Talbot contributed to this report.
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ONE-TIME ALLOCATIONS, 2015-16
The faculties and support units will receive $30.1 million in one-time funding in 2015-16. Highlights of the approved budget included:
- Slightly less than two-thirds of one-time money ($20 million) was contained within five projects, which is topped by $10 million for support for the long-range space plan, which includes the new Information & Media Studies (FIMS)/Nursing Academic Building, University College modernization, an Interdisciplinary Research Building and the modernization of Thames Hall;
- The remainder of the Top Five were endowed chairs matching program ($7.5 million); energy conservation initiatives ($1.5 million); university advertising initiatives ($500,000); and modernization of instructional facilities ($500,000);
- Schulich School of Medicine & Dentistry and Health Sciences received the largest one-time slices when looking at faculties, but mainly due to targeted government funding measures. Schulich received more than $3.7 million, including targeted government funding for dental clinical education ($1.2 million) and MD expansion ($2.4 million). Health Sciences received nearly $1.6 million, including targeted government funding for clinical education ($842,000) and the nurse practitioner program ($580,000);
- Arts & Humanities, Engineering and Information and Media Studies (FIMS) received nearly a quarter of a million dollars, leading all faculties in one-time money when targeted government funds are not considered part of the total. Arts received $250,000 ear-marked for graduate student funding; Engineering received $245,126, including $125,000 for creative active learning space; and FIMS received $213,000, including $43,000 for a grant facilitator position; and
- Vice-president (research) received $1.25 million to support a number of research-related initiatives, including research development and commercialization of intellectual property.
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BUDGET PLANNING HIGHLIGHTS
When Western’s Board of Governors approved the university budget April 23, it wrapped a process nine months in the making. Some of the highlights of that process included:
August 2014
- Early assessment of provincial government on funding possibilities;
- Preliminary student enrolment numbers arrive;
- Preliminary budget forecast developed by Western’s Office of Institutional Planning and Budgeting (IPB);
- Provost held dean’s retreat to discuss issues, priorities and a review of the university’s budget model – including consideration of other models.
September 2014
- Board of Governors retreat; and
- Budget planning guidelines issued to faculties and support units outlining parameters for the coming year.
November-December 2014
- Provost chaired planning meetings with faculties and the larger support units;
- Faculty and support unit presented plans/budgets based on the planning guidelines, including requests for funding to support new priority initiatives.
January 2015
- Provost reviewed faculty and support unit plans with the president and vice-presidents and presented preliminary recommendations for all the units for discussion;
- Based on the feedback, provost developed final recommendations;
- Planning meetings took place with smaller support units; and
- University-level budget forecasts were refined.
February 2015
- Provost sent formal letters outlining budget recommendations to deans and budget unit heads;
- IPB refined multi-year forecasts of enrolments, revenues and expenditures, including detailed line-by-line forecasts on revenue items (including various government funding envelopes and tuition revenues) and on expenditure items (including employee salaries, utility costs, insurance, library costs, student aid, IT infrastructure, etc.).
March 2015
- Board of Governors’ Property & Finance Committee received report of the Student Services Committee regarding ancillary fees, as well as proposals from the University Students’ Council (USC), Society of Graduate Students (SOGS) and Ivey Business School student groups regarding organization fees for the coming academic year; and
- Operating and capital budgets, tuition and other fees were presented to the Senate Committee on University Planning (SCUP)
April 2015
- Operating and capital budgets, tuition and other fees received Senate approval;
- Board’s P & F Committee reviewed operating and capital budgets, tuition and other fees; and
- Operating and capital budgets, tuition and other fees received final Board approval.