Why Does Auburn Need a New Budget Model?

Currently, the University allocates resources to schools and colleges on the basis of their previous year’s budget, plus or minus a percent. This precedent-based approach is predictable, but makes it difficult for the University to adapt to changing circumstances or fund strategic priorities. The need for change is strengthened by a number of challenges the university has faced in recent years. Significant challenges include:

Increased tuition dependency – Tuition as a percent of Auburn’s overall funding has increased from 44% to 63% from 2008 to 2013. This development is a result of decreased state appropriations and rising tuition prices, leaving the university at a heightened financial risk.
Increased competition in the marketplace – The marketplace for students and faculty has become more competitive. Areas of growing concern include student price sensitivity, dependency on out-of state tuition revenues, and salary compression, as examples. In response, the university needs a resource allocation model that allows it to be more strategic in its ability to meet the demands of the changing landscape.
Limited support for strategic initiatives – Auburn’s current resource allocation model leaves limited resources for university senior leadership to invest in strategic priorities, particularly academic ones.