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SIUE Budget Models: Comparison and Selection, Study notes of Decision Making

An analysis of different budget models for Southern Illinois University Edwardsville (SIUE) and discusses the current budget model used by the university. It includes a breakdown of SIUE's revenue sources, characteristics of various budget models, and a comparison of each model based on decision-making level, transparency, incentives, cost or revenue basis, and flexibility. The document concludes with discussion questions for further consideration.

Typology: Study notes

2021/2022

Uploaded on 09/27/2022

jimihendrix
jimihendrix 🇬🇧

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Alternative Budget Models
Question #4: Should SIUE move to a
different budget model and, if so, what
principles should guide this model?
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Alternative Budget Models

Question #4: Should SIUE move to a different budget model and, if so, what principles should guide this model?

Our Budget

Tuition, $89.30, 33% Student Fees, $28.80, 11% Housing, $19.90, 7% State Appropriations, $59.90, 22% State Grants/Contracts, $1.90, 1% Federal Grants/Contracts & ICR, $35.40, 13% Purchases/Services, $33.80, 12% Private Grants/Contracts, $2.20, 1% SIUE Sources of Revenue FY 2015 $ Millions Total Budget $271.2 million

Breakdown of Tuition vs

Appropriations

Tuition, $89.30, 60% State Appropriations, $59.90, 40%

Characteristics of Budget Models:

  1. Level of Decision Making
  2. Transparency
  3. Degree to Which Budget is Incentive-Driven
  4. Cost vs Revenue Driven
  5. Flexibility

Short Description of Each Model

  • Zero-Based Budgeting: Each year a unit’s budget begins at a zero baseline.
  • Formula-Based Budgeting: Each year a unit’s budget is determined by a specific formula. May be based on enrollment, revenue, costs, etc.
  • Incremental Budgeting: Each year a unit’s budget starts with the previous year’s budget as a baseline.

Short Description of Each Model

Performance-Based Budgeting: Each year a unit’s budget is determined based on certain performance measures. Responsibility Centered Budgeting: Each unit is treated as a separate entity. The unit’s budget is based on revenue generated by the unit.

How do Alternative Models Compare?

Level of Decision Making:

  • Zero-Based: Central
  • Formula-Based: Central
  • Incremental: Central
  • Performance-Based: Unit level
  • Responsibility Centered: Unit level

How do Alternative Models Compare?

Level of Transparency (to all units):

  • Zero-Based: High
  • Formula-Based: High
  • Incremental: Medium
  • Performance-Based: High
  • Responsibility Centered: Low

How do Alternative Models Compare?

Cost or Revenue Based:

  • Zero-Based: Cost
  • Formula-Based: Either
  • Incremental: Cost
  • Performance-Based: Revenue
  • Responsibility Centered: Revenue

How do Alternative Models Compare?

Flexibility:

  • Zero-Based: Medium
  • Formula-Based: Low
  • Incremental: Medium
  • Performance-Based: Low
  • Responsibility Centered: High

Discussion Questions

  • What are the biggest problems associated with SIUE’s current approach to budgeting?
  • What attributes of the budget alternatives that were described do you particularly like or don’t like?
  • If we are to change our approach to budgeting, what principles need to be considered as the new budget model is designed?
  • We’ll begin the reporting-back process in about 20 minutes