1. Enrollment-Based Allocation Process

2. 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. Instructional Costs per FTES Lower Division Upper Division Graduate 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. Lower Division $ * proportion of FTES Upper Division $ * proportion of FTES Graduate $ * proportion of FTES Total Enrollment-based funds divided into a 3 Year Rolling Average of Change in Total Annual Enrollments 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. 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 Total Enrollment-based funds $500,000 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. FTES Generation $ * proportion of FTES Students in Major $ * proportion of students Graduation Rates $ * proportion of students Funds divided into a 3 Year Rolling Average of Change in Total Annual Enrollment Attributes 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/