A Uniquely Vanderbilt Budget Model

Dear colleagues,

I was pleased to see the great turnout earlier this month at the Chancellor’s town hall on our new budget model – VU-ETOB. To more broadly share information about the FY18 budget process, I have devoted this newsletter to discussing the rationale behind the change and what it means, and perhaps equally important, what it does not mean.

Rationale

As the Chancellor explained, our goal is to establish an enhanced budgeting system that “give[s] deans more autonomy to focus their resources on their strategic priorities while maintaining the central efficiencies we’ve realized as a result of One Vanderbilt.” Vanderbilt is fortunate to be in a strong financial position. We have robust philanthropic support, low debt, growing extramural research funding, and unprecedented demand for our education programs. In parallel, academic and administrative services have in recent years been aligned for increased efficiency and effectiveness. Our trans-institutional collaborative culture is continually reinforced through these efforts and others tied to the Academic Strategic Plan. Having also just navigated the separation of the university and medical center budgets, the time is right for this important change.

What VU-ETOB is not

This is not a sea change. Deans have always deployed their approved budgets at their discretion following university guidelines. However, in ~2010, the four undergraduate schools and colleges moved to a more centralized budget model whereas the professional schools remained largely ETOB. As part of this, undergraduate tuition revenue flow was centralized to the Provost’s Office for re-allocation to the four schools awarding undergraduate degrees. Going forward with VU-ETOB, we will now implement a mutually agreed upon formula to determine allocation of those funds. I am working closely with the deans on developing an appropriate model that will transparently manage and incentivize collaboration across the schools and colleges.

VU-ETOB will not result in a decentralization of critical common services used by all. Thinking of this like a federal system, many activities will remain commonly managed so that we can continue to realize efficiencies and provide quality services, resources and tools to our faculty, staff and students. From academic services, like the libraries and registrar, to university administrative services like human resources and post-award management, these will operate as shared resources, with opportunities for shared governance and input through faculty/staff committees, working groups and advisory boards.

What VU-ETOB is

Through a VU-ETOB model, revenues flow directly to the schools and colleges. Each school and college also directly pays their own expenses and bears responsibility for a share of the general university operations they utilize, from utilities to public safety to legal to research services. Such direct management is intended to incentivize responsible oversight of expenses and strategic growth of revenues (such as extramural research funding). VU-ETOB will allow the schools and colleges to realize any benefits they may incur from better use of facilities and resources.

Importantly, strategic investments and initiatives in all the schools and colleges will continue to be supported through allocations of non-school revenues; for example, from unrestricted endowment and gift distributions.

I believe that Vanderbilt, more than most universities, is strongly positioned to implement this new kind of Every-Tub-On-Its-Bottom model that will realize benefits from increased local budget accountability without forsaking alignment on strategic priorities. It is my responsibility, as Provost, to ensure the very best deployment of our resources to support excellence in discovery and learning in and across each of our schools and colleges for the university as a whole.

Having all our schools and colleges located on one compact campus has fostered an unusual culture of collaboration at Vanderbilt. Vice Chancellor and CFO Brett Sweet and his finance team are working with me and the deans to make this budget model one that endures for the future. To do that, we will also continue to listen to faculty and staff input so that we establish a VU-ETOB model that preserves and furthers academic excellence across the campus.

Join me at my next Open Dore On Location to share your suggestions, or email me at provost@vanderbilt.edu.

Sincerely,

Susan R. Wente

Previous Open Dore Issues

In case you missed it….

Welcome Back! – August 2016

A Semester of Change – May 2016

Mental Health Awareness: A Role for All – April 2016

Reflections on our Graduate and Professional Student Community – March 2016

The True Value of Creativity and the Liberal Arts – February 2016

New Year, New Hires, New Perspectives – January 2016

Looking Ahead to 2016 – December 2015

All past issues

Other News

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Chancellor Faculty Fellows nominations open for 2017