Enrollment-Based Allocation Process

1. Enrollment-Based Allocation Process

2. Enrollment-Based Allocation Process • Our budget allocation process can be used as a means of implementing institutional goals and objectives in a fair and transparent way, and our budget allocations thereby should echo our values as an institution. • We may want to expand the policy-based budget allocation process to include an enrollment-based allocation component

3. Enrollment-Based Allocation Process Food for thought! • Humboldt’s budget policy should have both a policy-based and an enrollment-based resource allocation process reflecting institutional goals. • The enrollment-based allocation process would be a new component of the annual budget process.

4. Underlying Principles • The model should be developed in such a way that it will support the enrollment policy coming out of the Strategic Enrollment Effort, including the development of a strategic and operational approach to making decisions about recruitment, retention, and the scheduling of classes.

5. Underlying Principles • The model should require that all divisions of the university share in the risks, responsibilities, and benefits of enrollment increases or declines. • The model should help the University create incentives for all departments to generate resources and align college priorities with the university strategic plan.

6. Underlying Principles • In the beginning, existing budgets should be maintained at the current level. • Incremental (or decremental if necessary) budget allocations would happen annually through the established budget process. • This should not mean that programs are guaranteed a continuation budget, but it does mean we focus on the assignment of new funds in advancing the university’s mission.

7. Enrollment-Based Allocation Model • The enrollment-based allocation model could be created to reward a single factor such as FTES generation or a combination of factors that are important to the University including FTES generation, graduation rates, students in majors, etc. • The model would allocate a pool of resources based on these changes to the enrollment factors of each academic department. • This would give the colleges guaranteed funding to provide instructional services for increased student loads.

8. Attributes of Model • The allocation of enrollment dollars could be based on a three year rolling average of enrollment attributes, using the changes in full-time equivalent students (FTES) and/or headcount. • The formula should allocate a portion of the revenue to instructional programs at the College level, based on the actual change in lower division, upper division, and graduate enrollments. • The balance of the revenues should be allocated to non-instructional areas to cover institutional overhead and other growth related institutional costs.

9. Graduate Upper Division Lower Division Instructional Costs per FTES Dollars Support

10. Sample Model • This SAMPLE model allocates enrollment-based funds as follows: • Distribution based on three-year rolling average of enrollment changes • Two funding pools: instruction and non-instruction • Instruction – Colleges generating FTES • Non-instruction – Divisional Executive levels

11. Sample Model • Instructional category funds are distributed as follows: • Each discipline and/or department is assigned a low, medium or high cost rating • Instructional category funds are allocated to college level using the assigned low, medium and high cost factors.

12. Total Enrollment-based funds divided into a 3 Year Rolling Average of Change in Total Annual Enrollments Lower Division $ * proportion of FTES Upper Division $ * proportion of FTES Graduate $ * proportion of FTES Instruction (Colleges) 53% Non-Instruction 47% Instruction (Colleges) 63 % Non-Instruction 37% Instruction (Colleges) 75% Non-Instruction 25% Per FTES Allocation to Instruction (Colleges) Proportional Allocation to Non-Instruction SAMPLE 1

13. Total Enrollment-based funds $500,000 Lower Division - 100 FTES $500K * (100/250 FTES) = $200K Upper Division – 100 FTES $ 500K * (100/250 FTES) = $200K Graduate – 50 FTES $ 500K * (50/250 FTES) = $100K Instruction (Colleges) 53% * $200K = $106K Non-Instruction 47% * $200K = $94K Instruction (Colleges) 63% * $200K = $126K Non-Instruction 37% * $200K = $74K Instruction (Colleges) 75% * $100K = $75K Non-Instruction 25% * $100K = $25K Per FTES Allocation to Instruction (Colleges) $307K Proportional Allocation to Non-Instruction $193K SAMPLE 1

14. Funds divided into a 3 Year Rolling Average of Change in Total Annual Enrollment Attributes FTES Generation $ * proportion of FTES Students in Major $ * proportion of students Graduation Rates $ * proportion of students Instruction (Colleges) 53% Non-Instruction 47% Instruction (Colleges) 63 % Non-Instruction 37% Instruction (Colleges) 75% Non-Instruction 25% Allocation to Instruction (Colleges) Allocation to Non-Instruction SAMPLE 2

15. Summary • Policy-based budget allocation process is already established. • University would benefit by including a second, enrollment-based component to the budget process. • The enrollment characteristics inherent in the model should reward departments demonstrating movement toward the institution values as established by the strategic enrollment plan.

16. Questions? See more details at: www.humboldt.edu/~budget/