YUFA responds to the Arrival of ‘Activity-Based Budgeting’ at York

What follows is a brief Introduction to a YUFA report recently submitted to the Employer in response to the Employer's presentation on York’s new SHARP budget model at JCOAA/LRP

What is SHARP?

Over the past two months the York administration has been introducing its new Shared Accountability & Resource Planning (SHARP) budget model. This model is a form of “Activity-Based Budgeting” (ABB) which will replace the old “incremental” model which allocates money in relation to historical baselines. The SHARP model is meant to enhance accountability and also reward entrepreneurial behaviour by allowing units or Faculties more opportunities to keep the money they “earn” or save for the institution.

Incentivizing Performance in Universities

Like Program Prioritization (AAPR here at York) ABB is one of the new governance tools that North American universities and governments are adopting to incentivize greater productivity and performance in postsecondary education and research. This movement has traveled from the U.S. to Ontario where the Wynne government is proposing to introduce performance based funding for universities so that government support can be linked more directly to outputs such as student completion rates, labour market outcomes, publication counts, and so on. The new funding model will complement the province’s so-called “differentiation strategy” where institutions sign Strategic Mandate Agreements” (SMA’s) with representatives of the Ministry of Training, Colleges and Universities (MTCU). Policymakers hope that differentiation will minimize “duplication” among institutions and establish performance metrics to guide internal and external management of each institution.

ABB is clearly one of the components of the performance incentivizing toolkit described above, and York’s SHARP model will be phased in over the next three years. Its key feature is the direct attribution of revenues and expenses to Faculties on the basis of resource usage and measurable performance. Supporters of this model say that this will increase the accountability and responsiveness of units within universities. There is every indication, however, that SHARP provides a basis for subordinating academic decision-making and academic freedom to budgetary and market imperatives and increases the degree to which our activities as teachers and scholars are quantitatively measured.

Some Critical Observations

As we outline in our full report, SHARP is likely to put a premium on competition among departments and is unlikely to live up to its promise of increasing the transparency of decision making and resource allocation. For example, although formulas for assigning revenues or costs to Faculties may now have more clarity under SHARP, the downstream allocation of revenues to units remains entirely opaque. Moreover, it appears, based on the SHARP model, that the benchmarks used for cost and revenue assignment and the generation of surplus contingency funds will be established through administrative fiat and deal-making by the proposed "University Budget Planning Committee" (UBPC) which we fear will operate at a great distance from the collegium. If this is true, SHARP provides no mechanism to ensure real openness or collegial input in the process of setting academic priorities.

As YUFA has many more concerns about SHARP that we have communicated to the Employer, we also urge you to read the full report, which includes recommendations by the YUFA Executive to address the potential and troubling shortcomings of SHARP. Among other things we propose the creation of a Senate Budget and Finance Committee to ensure that academic priority setting will not become more concentrated in the hands of senior administrators as a result of the adoption of the new budget model. At a more general level we need to guard against the excessive proliferation of academic governance strategies that compel us to think of our work as winning brownie points in ranking exercises and competitions for resources and customers.

We thank Kean Birch, the Co-Chair of the Long Range Planning Joint Committee for skillfully developing the report and compiling its critical observations with the assistance of other members of the LRP and JCOAA. Please see the full report here.