1. Wright State University’s Budget Transformation: The “Mission-Driven Allocation” Model Presentation to: Faculty Senate May 7, 2012

2. Agenda Introduction WSU Budget - Current State The Changing Environment WSU “Mission-Driven Allocation” Model (MDA) WSU MDA Model Design The Path Forward Concluding Thoughts and Discussion WSU Budget Transformation May 7, 2012 2

3. WSU Budget: Current State Traditional Base Budget Approach Centrally Funded Incremental Adjustments  Compensation Changes  Inflationary Adjustments  Technology Initiatives Centrally Funded Allocations  Strategic Initiatives  Capital Projects WSU Budget Transformation May 7, 2012 3

4. The Changing Environment WSU must transform its budget development and management process to respond to this dynamic environment:  Drive student success  Expand programs and scholarship  Offset diminishing revenue streams  Catalyze entrepreneurship  Optimize expenses and drive efficiency  Respond to community needs WSU Budget Transformation May 7, 2012 4

5. WSU “Mission-Driven Allocation” Model (MDA) As a result, WSU is developing the “Mission-Driven Allocation” Budget Model The power of the MDA Budget Model  Enhance revenue generation and entrepreneurship (students & scholarship)  Focus resources on strategic initiatives  Establish a defined governance structure  Promote transparency  Streamline expenses and drive efficiency WSU Budget Transformation May 7, 2012 5

6. WSU MDA Model Design Types of Units  Academic Responsibility Centers Colleges, Lake Campus, WSRI, Matrix Department  Auxiliary Responsibility Centers ex. Bookstores, Food Service, Nutter Center, Athletics  Administrative and Service Units ex. Human Resources, Utilities, Facilities, Registrar WSU Budget Transformation May 7, 2012 6

7. WSU MDA Model Design Revenues – Unrestricted and Restricted  Tuition and Fees 75/25 Based on Instruction and Majors Specific Tuition and Fees  State Share of Instruction 60/40 Split Based on Tuition FTE and Research  Research Grants and Contracts Direct Research Revenues Indirect Cost Recoveries  Investment Income 4.5% of 5 Year Carryforward Average WSU Budget Transformation May 7, 2012 7

8. WSU MDA Model Design Expenses  Direct Specific to each Responsibility Center Controlled Individually by Units  Indirect Service Units (40 Individual/Consolidated Units) Allocations Based on Different Drivers Budget Managed by the A & S Units WSU Budget Transformation May 7, 2012 8

9. WSU MDA Model Design Strategic Initiatives Funding  Sources Based on % of Selected Revenues  Uses Responsibility Centers Predetermined Subvention New Initiatives (One-Time Funding) WSU Budget Transformation May 7, 2012 9

10. WSU MDA Model Design Governance  Four Committees will be established to oversee and manage the MDA Budget Model: Mission-Driven Allocation Executive Committee Administrative Services Allocation Committee Deferred Maintenance Committee Space Management Committee WSU Budget Transformation May 7, 2012 10

11. The Path Forward FY 2013  Ongoing training and communications  Parallel process – budget management under traditional method/translation into MDA reports  Launch of governance committees  FY 14 budget development (MDA method) FY 2014  Full implementation (with hold harmless) WSU Budget Transformation May 7, 2012 11

12. Concluding Thoughts and Discussion The WSU MDA Budget Model is:  Aligned with WSU mission, vision, values  Designed to empower innovation and collaboration  Responsive to the University Strategic Plan  Geared for driving entrepreneurship  Agile in a dynamic environment  Stakeholder-driven and governed  Designed to deliver effectiveness, transparency, and efficiency WSU Budget Transformation May 7, 2012 12