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Friday, March 17, 2023

New Budget Model

The Daily Bruin carries an article about a new "budget model" for UCLA which is being implemented:

UCLA’s new Bruin Budget Model will roll out July 1, altering UCLA’s system for allocating funding to different campus departments, schools and organizations. UCLA’s current budget model is successful in times of high revenue growth, but unsustainable in times of low revenue, according to the Office of Academic Planning and Budget website. UCLA’s current budget model is also less transparent than the upcoming Bruin Budget Model regarding how campus groups can increase their revenue, according to the website...

Full article at https://dailybruin.com/2023/03/14/new-bruin-budget-model-aims-for-even-funding-distribution.

You can read the entire article at the link above. But it doesn't tell you much. A year ago, comments (often with reservations) were received from various departments and schools:

https://dms.senate.ucla.edu/issues/issue/?5313.Academic.Planning.and.Budget.Office.Bruin.Budget.Model.White.Paper.

What was missing then - and still is - are simulations: If the model had been in effect starting X years ago, Department Y would have received Z revenue. The Z revenue could then be compared with actual revenue under the existing model. Everyone would then have a sense of the likely winners and losers.

In addition, the new model seems to be based on various activity measures such as student enrollment. A simulation would show departments what the revenue consequences would be of, say, a 10% increase or decrease in enrollment. It would thereby also show what incentives are built into the model.

However, the documentation seems to deny that there are incentives in the model:

6.2 Does the model unintentionally incent Departments to compete for undergraduate teaching?

For undergraduate teaching, the goal of the new model is to properly align funding with resource needs, not to increase undergraduate enrollment or incent competition over existing undergraduates. We have completed a decade of substantial enrollment growth in undergraduates, and decisions to add enrollment require EVCP approval. The incentive portion of the model is designed to promote growth in other areas where there are opportunities (summer, SSDPs, research, new ventures). Undergraduate academic program decisions should continue to be based on academic quality and student outcomes. We are working with the Academic Senate to develop key metrics to monitor to ensure that UCLA maintains the high quality of its academic programs. The EVCP will monitor metrics to make sure that shifts in undergraduate credit hours are strategic and make sense; actions adverse to academic quality and student success could impact a unit’s EVCP supplemental allocation.

Full document at https://apb.ucla.edu/bruin-budget-model.

This is, to use a non-technical term, total BS. If more money results from an increase in an activity, there is an incentive to do more of that activity. The simple answer to question 6.2 is "yes," although if it was done "unintentionally," whoever designed the model was naive, which yours truly doubts. There may be good reasons to change budget allocations, particularly if Hard Times are projected. But obscuring the fact that there will be winners and losers, and that there are incentives to try and be the former, will ultimately fail. As time passes, department heads and school deans will figure out the incentives and react accordingly.

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