By SUSAN JONES
A new budget model being developed now by Pitt, with the help of consultants, is moving ahead more quickly than many projects at the University, and some members of Faculty Assembly aren’t happy about that increased speed.
At the April 14 Faculty Assembly meeting, an overwhelming majority voted for a resolution that asks for the Budget Re-START process to be paused until the structures can be put in place to provide full participation of shared governance entities, such as the Senate Budget Policies Committee, Faculty Assembly, and the University Planning and Budgeting Committee.
The proposed budget model is focused on responsibility center management (RCM), which would give schools and other responsibility centers more decision-making power about how money is spent but also would make those units more responsible for raising money and would require them to pay a “tax” to the central administration for shared services.
Senate President Chris Bonneau and Gary Hollibaugh, a member of the Senate Budget Policies committee, have been serving on the ReSTART (Revenue Sharing to Accelerate Responsive Transformation) steering committee since it formed in December 2020. But the first time Pitt’s shared governance got details of the plan was at the Feb. 19 Budget Policies committee meeting.
The timeline calls for a formula to be agreed on and an infrastructure to be put in place by the end of June to support the new process. The formula would determine the amount of tuition indirects, the Commonwealth appropriation and the tax for the central cost centers each unit would have.
After the formula is set, the new model would be tested as a “shadow budget” for a year with numbers from the 2021-22 fiscal year, and would go live for the 2022-23 fiscal year.
“Ideally during that parallel year, we say, ‘Wow, we nailed it. No tweaks necessary, move forward,’” Steve Wisniewski, vice provost for Budget and Analytics, told the Budget Policies committee on April 16. “More likely we’re going to say, ‘Yeah, we missed it here, we missed it there, let’s tweak it a little bit.’ There’s also the chance to say, ‘We missed the boat completely. Let’s scrap it and start over.’ ”
At the April 14 Faculty Assembly meeting, many members expressed surprise about the aggressive timeline for a project they are just now hearing about.
Tyler Bickford, co-chair of the Senate Budget Policies committee, gave a presentation to Faculty Assembly about what the committee heard in February from Huron Consulting and what he learned from contacting peers at other universities that have adopted an RCM model.
“We’re supposed to be in the stakeholder engagement phase,” Bickford said. “But what I’ve experienced so far is that the University Planning and Budgeting Committee had a very short presentation on this in January. And the Senate Budget Policies committee had a presentation by Huron Consulting that lasted about an hour in February, where most of us were really for the first time getting our heads around this and didn’t necessarily even really know what kind of questions to ask or what kind of priorities to raise. …
“I don’t have a sense that staff, faculty and students are being considered stakeholders here,” he said. “For example, I invited the provost or CFO to come meet with the Senate Budget Policies committee this month, so that we could, after having received the news of this and digested it, … try and provide them some responses and a sense of the priorities that faculty have in this process. And they declined and said that the steering committee was sufficient.”
Senate Council member Maria Kovacs said, “This is a major decision that involves all of the faculty. It seems to me that the administration has decided that this is what they want to do. I think even these stakeholders’ meetings, it just seems to me like it’s window dressing. And I’m concerned about the fact … that (the Budget Policies committee) has reached out to them to have meetings and they declined these meetings. To me, this is an absolute danger signal.”
Bonneau told Faculty Assembly he was limited in what he could say about the steering committee’s work, but, “I think when you’re talking about stakeholder engagement, the faculty are important stakeholders in this. And I fear that the consultants don’t quite understand the important role that faculty governance plays and certainly has played here.”
After much debate, Faculty Assembly passed a resolution that stated: “The Budget Re-START process is rushed. The lack of joint governance involving the Faculty Assembly is regrettable and needs to be remedied immediately. The current timeline is not compatible with shared governance. The ‘infrastructure development’ phase of this process is critical and cannot be adequately completed in May and June.”
More concerns were raised at the April 16 Budget Policies committee meeting, particularly about the oversight needed within each school to make decisions about budgets. The committee had recently reviewed some of the school-based budget committees and found that most just gave perfunctory approval of the administration’s decisions.
Bickford said in talking to peers at other universities he found that while the budget formula was important for deans and those running the budget model, the most important aspect for most was the “faculty, staff, student participation in governance structures.”
He cited the University of Washington as the place where everybody seems happiest with their RCM system and it is working well. Washington also has the strongest governance structures, which include an elected faculty committee in each school that is fully involved in their unit’s budgeting. The chair of each school’s budget committee is a member of the University Senate, and meets every semester with the Senate leadership to share notes and talk about what they’re doing in their planning and budgeting process.
The big question is how long will it take to set up the internal review structures in each of these schools.
Thurman Wingrove, Pitt’s controller, told the budget committee that Huron has said that the 18-month timeline to make the switch to an RCM model was pretty standard. “But yeah, I won’t pretend to tell you that it’s not aggressive, it is an aggressive timeline.” Another concern is that the Office of the Chief Financial Officer lost several staff members last year who took the early retirement package.
“I’ve actually been hearing about this for at least the past year, year and a half from senior administration, so I know it’s something that they have wanted to do for a while. It was just a matter of when,” Wingrove said.
“The incremental model that we’ve been using has been working fine, but we do have some structural problems that we just keep kicking that can down the road by not fixing it,” Wisniewski said. “Fixing it now seems to be the most important thing to do. I think that’s part of the reason why to do it now.”
He also said that Pitt started further down the path toward making this switch because Wingrove and his team already have infrastructure in place to track costs and other items.
Hollibaugh told the committee he still has concerns about the timeline. “I want to know how the University is going to develop governance structures to deal with how the budget model might change,” he said. “From my perspective, most budgetary models are probably fine, so long as the proper governance structures have been developed; so long as the different units have the right incentives; so long as the individual faculty members are being given the right signals to act in ways that are consistent with the broader mission. …
“But I need to know what everything else will look like, and I don’t think we have enough time in half of May and all of June to really develop this.”
Bickford proposed several steps that need to take place to strengthen unit-level governance across schools and with the University Senate:
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School budget committees should be majority elected.
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Members should elect a chair who will co-chair the budget committee with the dean.
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Faculty co-chairs meet at least once a term with each other, with Senate officers and with the Senate Budget and Planning committee officers.
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Faculty co-chairs should have some role on the University Planning and Budget Committee, maybe as rotating members.
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The school budget committees should be involved in budget decisions.
Bonneau said he had a very frank discussion with Provost Ann Cudd, who chairs the Re-START steering committee, after the April 14 Faculty Assembly meeting to express his concerns about shared governance’s involvement in the new budgeting model. “I communicated that the concern is about these institutional structures and how we can’t be developing these on the fly. … If they’re not done in advance, they are much harder to stand up after the fact.”
At the April 22 Senate Council meeting, Bonneau said that much of the discussion at a meeting of the Re-START steering committee that same day focused on how to involve shared governance.
Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.
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