Budget Allocation Approach
Penn State has developed a new data-driven budget allocation model as part of a comprehensive effort to modernize the University’s budgeting approach and to uphold Penn State’s commitment to student success, research, and the land-grant mission across the commonwealth.
Overview
Work began in August 2022 when President Neeli Bendapudi charged a group of leaders under the direction of Sara Thorndike, senior vice president of Finance & Business/Treasurer, to explore and develop a new budget model that better serves the mission, vision, and values of the University. The previous budget model served the University well in the past, but as higher education continues to evolve, so must the model for allocating financial resources and appropriately stewarding those resources. This effort supports Penn State's multi-pronged approach to reducing costs, identifying efficiencies, and enhancing revenues.
The working group partnered with the National Association of College and University Business Officers (NACUBO) to help provide guidance and expertise throughout the process. The new model was produced throughout the fall, reviewed, and delivered for approval in December 2022.
Penn State Budget Allocation Working Group
A working group of faculty, staff, and administrators from across Penn State's campuses are helping to redesign the budget allocation model:
Kelly Austin, Vice President for Commonwealth Campuses
Jeremy Bean, Director, Change Management & Organizational Excellence
John Cheslock, Professor of Education, Area of Expertise: Higher Education Organizational Finance
Ken Cody, NACUBO Consultant
Margo DelliCarpini, Chancellor, Penn State Abington
Marie Hardin, Dean of the Donald P. Bellisario College of Communications
Jody Heckman, University Budget Director
Terra Ingram, Administrative Staff Coordinator/Business Manager for Sustainable Agriculture, Food and Environmental Science Institute (SAFES), Staff Advisory Council Chair
Lance Kennedy-Phillips, Vice Provost for Planning, Assessment, and Institutional Research
Tracy Langkilde, Verne M. Willaman Dean, Eberly College of Science
Justin Schwartz, Interim Executive Vice President and Provost
Michael Wade Smith, Senior Vice President and Chief of Staff
Michele Stine, Teaching Professor of Biobehavioral Health
Sara Thorndike, Senior Vice President Finance and Business/Treasurer
Virginia Teachey, Associate Vice President for Finance
Lora Weiss, Senior Vice President for Research
PROCESS
The budget work unfolded in three phases.
In the first phase, the working group discussed the unique nature of Penn State and essential factors that needed to be kept at the forefront of conversations and decision-making. This led to the creation of a guiding set of principles for the project.
In the second phase, the group followed decision points related to higher education finance and budgeting to develop a test model. Data from the old model were input into the new model to identify outcomes. The working group adjusted the model to better reflect its guiding principles and create a workable first draft.
In the final phase, the draft model was presented to key stakeholders for questions and feedback, which was discussed and adapted into the final model.
NEXT STEPS
Starting in January 2023, budget executives will work with financial officers to create a multi-year budget based on the new model for fiscal years 2024 and 2025. Once unit budgets are finalized, The University Budget Office will present the budgets in July 2023 to the Board of Trustees for final approval. In fall 2023, the model will be rerun with current data for fiscal year 2026.
In addition to the budget development work, the group will create educational materials for the Penn State community, growing fundamental base knowledge around how University financial resources flow into and through the institution.
Penn State’s Institutional Values
Upholding and strengthening Penn State's core mission, vision and values are the foundation of the process to build a new budget model.
Principles
The working group identified key principles to guide the budget model decision-making process.
Frequently Asked Questions
Here you will find answers to the common questions about the budget allocation initiative.
Asked and Answered
A video series featuring members of the Working Group addressing questions about the budget plan.
ADDITIONAL RESOURCES
Videos
- Faculty & Staff Budget Town Hall (September 2022)
- Students & Family Budget Town Hall (September 2022)
- Budget Allocation Town Hall (December 2022)
Articles
- Penn State unifies financial organization, begins new budget transformation (July 2022)
- Penn State leaders discuss budget and tuition at student and family town hall (September 2022)
- Top frequently asked questions at employee town hall (September 2022)
- Penn State working group continuing efforts to redesign budget allocation model (November 2022)
- Penn State leaders provide overview of budget allocation model at town hall (December 2022)
- University budget effort continues as units start work on individual budgets (January 2023)
