Budget model evaluation and change at the University of Arkansas

Cale Fessler

Associate Vice Chancellor for Budget, Financial Planning, and Business Affairs, University of Arkansas

The views and opinions expressed are those of the author and do not necessarily represent the views or opinions of EAB.

Background

The University of Arkansas (UA) is in a period of sustained growth, putting pressure on the financial, physical, and human resources needed to support and sustain that growth into the future. The university also operates in an intensely competitive market for staff positions in the Northwest Arkansas region, and in an increasingly competitive faculty environment as the university works to advance its land-grant mission and its student success, research excellence, and employer-of-choice strategic priorities.

Problem

With a largely incremental budget model, UA must determine a new or modified budgetary model or strategy in order to support the growth in students, the three priorities of its strategic plan, and continue to fulfill its mission as a land-grant institution in the state of Arkansas.

Solution

Through research via EAB’s resources, participation in the Rising Higher Education Leaders Fellowship, discussion with university leadership, and internal evaluation across the university it became clear that landing on a one-size-fits-all budget model, such as remaining in a fully incremental model or moving to a complete RCM system, would not be an optimal solution.

Instead, a hybrid approach blending elements of incentive-based budgeting with the stability of an incremental model was chosen as the best solution. This hybrid approach will allow the university to focus on achieving its goals and incentivizing desired outcomes while retaining the ability to make strategic investments by using the right model or method to fit the desired outcome, whether at a unit- or university-wide level.