A Review of Brock's 2015-16 Budget Report

This review was based on a Results Based Budgeting (RBB) Framework, whereby the budget revolves around a set of predefined objectives and expected results. It is this framework that will guide the review's recommendations at the end of this report.

1. Relevance - a measure of the degree of influence an allocated resource/input (such as funding, expertise, and time) has on achieving defined outcomes.
2. Effectiveness - the extent to which outcomes were achieved or are expected to be achieved, taking into account their relative importance.
3. Efficiency - a measure of how economically resources/inputs are converted into results.

The overall objective of Brock University's Budget Process is to allocate resources in advance for the maximum benefit of stakeholders. "It is a method to authorize spending authority and establish revenue targets of units within Brock University" (Brock University, 2015).

Brock University's 2015-16 budget process (approved by the Board of Trustees in May 2015) was the product of consultation with the following bodies:

• Senate Planning, Priorities and Budget Advisory
• Finance Committee of Academic Deans
• Senior Administrative Council

The 2015-16 Budget process began with the identification of the following objectives:

1. Support the ministry's Strategic Mandate Agreement (SMA) and Brock's Integrated Strategic Plan (See Section 2.1 below)
2. Provide new investment where critically needed (i.e. scholarships, financial awards, recruiting initiatives, teaching positions, library acquisitions, debt reduction strategy, etc.)
3. Support ongoing initiatives (Teaching faculties, academic support departments, student specific services, shared services, etc.)
4. Continue to simplify the budget and bring financial and non-financial information together to enhance accountability, understandability and transparency.

In 2014, Brock's Strategic Mandate Agreement was negotiated with the Ministry of Training, Colleges and Universities (MTCU) in response to Ontario's Differentiation Policy Framework (Ontario, 2013). It should be noted that Brock is one of 45 publicly funded PSE institutions that have an SMA agreement with MTCU.

The overall objective of the Differentiation Policy is to improve Ontario's Post-secondary education (PSE) system by helping institutions build on their individual strengths and reduce redundancies in academic programming. This will help address some of the major challenges facing Ontario today, including:

• Limited funding available to public PSE institutions due to large provincial deficit
• Decreasing demographic of 18-20 year olds (over the next 10 years), leading to increased competition between PSE institutions

The Differentiation Framework recognizes the lack of efficiency in allocating funds to schools that are all offering the same programs and competing for the same shrinking pool of students. The idea is to get schools to specialize, each attracting a different group of students, thus resulting in a more effective and efficient use of funding.

Brock's SMA agreement highlight's it's key area of differentiation as follows (Brock University, 2014):

Brock University's areas of strength include: Undergraduate teaching excellence with foci on work-integrated, service, and small-group learning; regional partnerships; and continued excellence in research and associated graduate programs, with a special focus on transdisciplinary research hubs highlighting areas of strength that contribute to the social, economic, and cultural development of the Niagara Region.

Overarching provincial priorities highlighted in the Differentiation Framework include: 1) Jobs, Innovation and Economic Development; 2) Teaching and Learning; 3) Student Population (Diversity and accessibility); 4) Research and Education; 5) Program Offerings; and 6) Institutional Collaboration.

It should be noted that any request made to MTCU (i.e. new program approvals), will be responded to based on the goals identified in the SMA agreement. There is also a strong possibility that Ontario's new funding formula for PSE institutions (to be announced in 2016) will have a portion directly tied to performance metrics listed in each institution's SMA agreement.

Brock's Integrated Strategic Plan

In addition to supporting provincial priorities, Brock has it's own set of strategic priorities aligned with it's overall vision, "To make a difference in the lives of individuals in our Brock community, Niagara Region, Canada, and the world". They are:

1. Ensure Brock is a preferred place to work and study
2. Support Brock's undergraduate student-centred focus while maintaining excellence in graduate education.
3. Foster excellence in research, scholarship and creativity.
4. Serve the social, cultural and economic well-being of the University, as well as the local, national and global communities.
5. Encourage transdisciplinary initiatives.
6. Promote internationalization.
7. Practise accountability, fiscal responsibility and stewardship.

Table 1: Funding the Budget

Table 1 shows Brock's projected revenue to be $297,134,000, which is $3,937,000 less than their estimated operating costs of $301,071,000. The Mitigation Target of $3,937,000 means that Brock plans to take actions to reduce the excess expenditures over revenues by the end of the fiscal year (April 30, 2016), in order to achieve a balanced budget.

As highlighted in Table 1, Student Fees (including tuition, ancillary and other fees) account for 51% of Brock's Total Revenue. This proportion is only 1% higher than in 2014-15, largely due to: Lower student enrolment (driven by the decreasing Ontario demographic); MTCU mandated changes to the Teacher Education program resulting in lower enrolment; as well as a system wide tuition fee increase cap of roughly 3%.

3.1.1 Tuition Fees
Tuition fees are set with MTCU's Tuition Fee Policy in mind. Any Tuition charged above permitted levels set in the policy, will be penalized through Government grant reductions.

Tuition Fee Revenue is largely dependent on Brock's forecasted undergraduate (UG) enrolment. For 2015-16, this was estimated by the Registrar's Office to be 16,688, which is down 375 students from Brock's 2014 UG enrolment of 17,063 (The official 2015 enrolment report will not be available until January 2016).

General steps in forecasting Brock's 2015-16 UG enrolment involve looking at the number of applications received (back in January) and comparing this to that of the previous year, to estimate the number of intake students; and then combining this with historic retention/progression rates of students from one year of study to the next, to estimate enrolment for non-intake students.

Forecasted enrolment figures are then translated into full-time equivalents (FTE's) which is, in simple terms, an estimate of the number of full-time students based on courseload. FTE's are then used to calculate tuition revenue.

3.1.2 Ancillary Fees
Most ancillary fees (student life, athletic, recreational, health services, bus pass, etc.) are set by student referendum and the Brock Student's Union (BUSU), although some are system-wide fees that apply to all Ontario University students.

3.1.3 Other Fees
Other fees include the Student International Recovery Fee (in response to MTCU enforcing a grant reduction of $750 per international student in 2013) as well as program-specific fees such as co-op fees and English as a Second Language (ESL) fees.

Brock's Government grant revenue for 2015-16 accounts for roughly 31% of Brock's total revenue. This is down 2% from 2014-15. To understand this decrease in funding from the government, it's important to get a basic understanding of Ontario's PSE Funding Model.

Grant revenue is broken down into the following categories:

1. Basic Operating Grant (fixed) - makes up roughly 78% of Brock's Total Government Grant Revenue; was reduced by 1% in 2013 and then by another 1% in 2014; $750 per international student is deducted from the Basic Operating Grant as a further cost-savings strategy for the Ontario Government (introduced in 2013).
2. Undergraduate Accessibility Fund (enrolment based) - makes up roughly 1.5% of Brock's Total Government Grant Revenue; is only granted if there is positive domestic growth over the 2010-11 base year; forecasted FTE's (as explained in section 3.1.1) are translated into Basic Income Units or BIU's (which are basically weighted FTE's with heavier weights assigned to students enrolled in programs that cost more to run) which is then used to calculate grant revenue for this particular fund; international students, students enrolled in additional qualification programs (for teacher education), and students enrolled in a co-op workterm are ineligible for government grant funding and not included in the FTE count for this grant.
3. Graduate Expansion Grant (enrolment based) - makes up roughly 2% of Brock's Total Government Grant Revenue; is only granted if there is positive domestic growth in Masters and PhD students over the 2007-08 base year (up to a maximum number set by MTCU).
4. Nursing Grant (enrolment based) - makes up roughly 3% of Brock's Total Government Grant Revenue; is granted based on enrolment numbers from the prior year and multiplying it by the most recent funding rate set by MTCU.
5. General Access and Quality Grant (fixed) - makes up roughly 4% of Brock's Total Government Grant Revenue; is granted to increase access to high-quality PSE across the province.
6. Performance Fund Grant (performance based) - makes up almost 1% of Brock's Total Government Grant Revenue; is only granted if the university performs within 10% of the benchmark set for the 3 system-wide indicators (employment rate within 6 months of graduation, employment rate within 2 years of graduation, and cohort-based graduation rate).

Specific Purpose Grants

1. Research Support Fund (research funding based) - makes up roughly 2% of Brock's Total Government Grant Revenue; is a Government of Canada grant to assist Canadian PSE institutions with indirect costs incurred on Tri-Council-funded research; is dependent on the average research funding amounts from the 3 funding agencies over the past 3 years.
2. Grant in lieu of Municipal taxation - makes up roughly 1% of Brock's Total Government Grant Revenue; offered to subsidize universities in paying their municipal taxes.
3. Teacher Education Transition Funding (limited term) - makes up roughly 1% of Brock's Total Government Grant Revenue; offered to support the implementation of programs that meet new Teacher Education program requirements set by MTCU.
4. Graduate Enrolment Capital Expansion Grant - makes up almost 1% of Brock's Total Government Grant Revenue; offered to support the capital expansion of graduate education.
5. Facilities Renew Program Funds - makes up almost 1% of Brock's Total Government Grant Revenue; offered to help ensure academic spaces are safe and in good repair.
6. Access Fund for Students with Disabilities - makes up roughly 0.6% of Brock's Total Government Grant Revenue; offered to support services for students with disabilities.
7. First Generation Project Grant - makes up roughly 0.5% of Brock's Total Government Grant Revenue; offered to support the retention of first-generation students (students whose parents did not attend a PSE institution).
8. Other grants - include Aboriginal Student Success Fund, Credit Transfer Grant, Women's Campus Safety grant, grants for student bursaries, etc.).

Most of the reduction of Government Grant Revenue (2% decline from 2014-15) is driven by lower domestic student enrolment, directly affecting allocation amounts for the Undergraduate Accessibility Grant, Graduate Expansion Grant and Nursing Grant.

Internal Chargebacks account for roughly 2.5% of Brock's total revenue. This is revenue received by units within Brock University for providing services to other units within Brock University. These services include: Utility charges to the Department of Residences; Printing and Digital Services; Information Technology Services; Facilities Management Services; Central Receiving and mail Services; Parking Services; Recreation Services; Machine and Electronic Shop Services (Faculty of Math and Sciences); Health Services; and Marketing and Communication Services.

Brock has 4 areas of other revenue that account for roughly 16% of its total revenue. These include:

1. Ancillary Operations - accounts for roughly 6% of Brock's total revenue; includes Campus Store, Parking Services, Conference Services, and Hospitality Services.
2. Residence Fees - accounts for roughly 6% of Brock's total revenue
3. Investment Income - accounts for roughly 0.2% of Brock's total revenue; based on interest earned on short-term investments of tuition money received.
4. Sales and Services - accounts for roughly 4% of Brock's total revenue; based on income received from services including:
   • transcript printing
   • processing applications to graduate
   • processing letters of permission
   • processing student accounts
   • procesing applications through the Ontario University Application Centre
   • processing graduate studies applications
   • health services;
   • Heritage Place Plaza
   • Recreation Services (aquatic centre, Zone membership, intramural and instructional fees)
   • International learning programs
   • advertising for off-campus housing
   • Centre for the Arts tickets

Areas of growth and new investment highlighted for 2015-16 budget include:

• The introduction of new entrance awards amounting to $700,000 (to increase conversion of applicants)
• A new Data Analytics position in the Office of the Registrar
• Additional support in International Recruitment
• Additional support in Marketing and Communications (social media and website support)
• Two new limited term teaching positions in the Faculty of Applied Health Sciences
• A $150,000 increase in Library acquisitions to account for the falling canadian dollar
• A $475,000 investment in a debt reduction strategy
• A $900,000 contribution to the post-retirement benefits reserve
• $100,000 towards air quality upgrades in the Faculty of Health Sciences space of the Walker Complex
• $1,140,000 for a Village Residence Fire Alarm/Emergency Notification System
• $1,200,000 towards structural repairs to the Aquatics Centre
• $105,000 towards a new group learning space on the sixth floor of the library
• $469,000 towards classroom modernization
• $1,525,000 towards post-Marilyn I. Walker School of Fine and performing Arts renovations
• $250,000 towards a new backup generator for Brock's data center
• $237,750 in expanded disk storage space
• $255,000 in computer purchases and redeployment
• $463,750 in wireless expansion
• $1,000,000 for a new finance system

These allocations are relevant as they all address Brock's budget objective of providing new investment where critically needed in order to maintain business continuity. It is noted, however, that investments towards objectives highlighted in Brock's SMA agreement toward's the province's PSE differentiation goals (service learning, work-based learning, small-group learning), have not been addressed.

Key Takeaways:

• At the beginning of their Budget Report, McMaster's Executive Summary, clearly links the 2015-16 Budget to their SMA agreement and Strategic Priorities (2015), "Work is ongoing to assess the effectiveness of the budget model in incenting and rewarding activities aligned to driving strategic priorities and objectives while minizing costs....Strategic investments include both infrastructure upgrades and program developments aligned to McMaster's SMA."
• McMaster highlights the 6 specific goals of MTCU's differentiation policy as part of their objectives to build their budget model around.
• Much of the Budget report focuses on investments in revenue generating activities.
• Efforts towards Strategic and SMA priorities are highlighted in each academic faculty and non-academic department.
• New investments for 2015-16 are highlighted under each academic faculty in terms of how it will drive progress towards reaching strategic and SMA goals.

Areas of New Investment:

• Faculty of Humanities: Investment in new research clusters that focus on Humanities engagement with the digital frontier, the worlds of science, and community based scholarship.
• Faculty of Business: Investment in the launch of a new health partnership with the Faculty of Health Sciences; installation of a new research center in evidence-based management; and the launch of the new Learn to Lead Academy.
• Faculty of Health Sciences: Investment in the School of Nursing's new community-embedded learning initiatives; a new Biomedical Discovery and Commercialization program; and in supporting research on the use of learning e-portfolios by students taking part in global outreach activities.
• Faculty of Social Sciences: Investment in a new undergraduate degree in Health and Community (collaboration between Faculty of Health Sciences, Mohawk College, and community partners); expansion of experiential education offerings including internship and service learning opportunities; and in supporting increased capacity for faculty to adapt their courses to active learning approaches.
• Faculty of Science: Investment in the new School of Interdisciplinary Sciences, re-development of the Life Science program; and the assessment of all program and course offerings.
• Faculty of Arts and Science: Investment in the improvement of student experience by reducing reliance on sessional faculty and increasing teaching by regular faculty members; and in supporting the expansion of experiential learning and student research opportunities.
• Supporting department (non-academic): Investments to improve the student experience (more support for mental and physical health, and career development); increase of accommodations for students with disabilities; increasing support for first-year and international students' transition to student life; and community engagement initiatives through the library.

Key Takeaways:

UVic begins their Budget Report by setting the context in terms of challenges faced ahead. This includes the decreasing demographic of 18-24 year olds over the next 15 years, the continuing decline of provincial operating grants for PSE institutions, the restrictions on tuition fee increases (which cannot exceed inflation changes), and contractual obligationsrelated to salries and rising costs associated with utilities and library acquisitons (due to the falling canadian dollar).

In response to these issues, special focus was put on recruitment efforts and retention and engagement of existing students. UVic also aligned itself with the provincial government's top priority of economic development (which will eventually require that 25% of the universities operating grant be spent towards programs that support a priority set of occupations). Special investment was allocated towards programs linked to the the top 60 jobs in the province projected to have the highest number of opening by 2022, as well as programs that are feeling pressure from rising international numbers (Engineering, Business, and Economics).

New investments for 2015-16 were framed around the three pillars of UVic's
strategic plan:

Pillar 1: Building on Excellence in Education for Undergraduate and Graduate Students

• Investment to supporting enrolment growth in Engineering, Business, co-op education, and the Pathways program (whereby students complete English language training before entering an academic program)
• Investment to support undergraduate student financial assistance
• Investment to increase support for academic advising and international advising
• Investment to improve services and supports for students with disabilities
• Investment to improve student life programming
• Investment in UVic's mental health strategy
• Investment to improve international recruitment efforts to help further diversify student population
• Investment in a mentorship program to support indigenous students
• Investment towards developing a sustainable scholarship program for graduate students aimed to provide more competitive graduate funding.
• Investments to improve experiential learning particularly in areas of student enrolment growth and international enrolment growth
• Investments in support services for using educational technology and developing best practices for integrating technology into teaching and learning practices with a focus on improving course delivery and achieving learning outcomes.
• Investments towards renewing classroom technology and infrasturcture based on updated classsroom standads and upgrading teaching laboratories.
• Investments in TA and tutor training.

Pillar 2: Building on Excellence in Research, Scholarship and Creative Activity

• Investment in the development of a five year Strategic Research Plan to reflect on research strengths, caliber of faculty, staff and students, and the impact of research locally, nationally and globally.
• Investment in strengthening community access to university knowledge and promotion of community engagement in research and teaching activities

Pillar 3: Building on Strengths in People: Recruitment, Retention and Engagement of Faculty and Staff

• Investment in establishing a productive and cooperative relationship with the newly certified union and achieving a first agreement
• Investment in the support of professional development for administrative support staff and sessional instructors including training and improved teaching platforms

Similar to UVic's Budget Report, Brock's Budget Report begins with an Executive Summary that sets the context by stating challenges faced ahead (System-wide declining enrolment, reduced funding from province, MTCU enrolment restrictions, etc.). The overarching goal defined here is to work towards a balanced budget.

Relevance
As noted in section 4.0 of this report, Brock's key areas of investment are relevant in that they are connected to the second Budget Process objective of Providing new investment where critically needed. There are no investments highlighted under the first objective: Support the Integrated Strategic Plan and Strategic Mandate Agreement. This is justified by the overarching goal for 2015-16 to balance the budget, however, it is recommended that future budget reports increasingly focus on highlighting investments that drive progress towards the province's goals of differentiation and Brock's strategic priorities, as budget issues decrease through the years and become stabilized. It is also important to note that discussions around the ministry's current redesign of the funding model suggests that as years progress, funding will be increasingly tied to performance outcomes identified in each institution's unique SMA agreement with MTCU.

Effectiveness
As long as Brock's Budget report increasingly highlight investments tied to driving performance outcomes identified in the unversity's SMA and strategic priorities, overall effectiveness will also increase. The 2015-16 budget report is only effective in achieving a balanced budget and maintaining business continuity and workplace safety. Its important to remember there are many other institutional objectives that need to steer the budget process in the future. Similar to McMaster's budget report, future budget reports should highlight areas of investment under each institutional support department and academic faculty that drive progress towards overarching strategic and SMA goals. These investments should point to other supporting documents that show actual metrics that prove the effectiveness of such investments over the years.

Efficiency
Efficiency is about allocating funds in the most economic way and reducing redundancies wherever possible.

Ex. With respect to improving Service Learning outcomes (which is one of Brock's key areas of differentiation as highlighted in their SMA agreement): Rather than allocating investments in the various faculties to meet the same overarching service learning objective (as seen in McMaster's report), investment can be made for increased centralized support in the Centre for Pedagogical Innovation. This could be for the development of a training program to help all professors/instructors in all academic units adapt their courses to a more service learning approach (which can be as simple as integrating into each course, a small-group project that solves a real-world problem and is presented to a real-life stakeholder). A common misconception among faculty is that a service learning course must involve volunteer work in the community. Training needs to be provided to promote awareness on what service learning actually means.

Efficiency can be achieved by first looking at investments in programs that can be centrally administered and applied across all academic faculties, and then looking at investments that address the unique needs of the different academic faculties.

By using a Results-Based Budgeting Framework as recommended above, Brock can ensure that budget allocations are aligned with anticipated results and that progress is being made towards these anticipated results. Ultimately, this will result in increased confidence and support from stakeholders like the Board of Trustees and MTCU, and increased funding for future growth.