Standard 3:
Institutional Resources
The human, financial,
technical, facilities, and other resources necessary to achieve an
institution’s mission and goals are available and accessible. In the context of
the institution’s mission, the effective and efficient uses of the
institution’s resources are analyzed as part of ongoing outcomes assessment.
Rutgers,
like public universities across the nation, is faced with severe constraints on
state dollars for higher education as well as increasing concerns about
affordability that place real as well as political limits on increases in
tuition and fees. While many states have
seen economic upturns that have resulted in new investments in higher
education,
·
invest
in current and new academic programs that will promote academic distinction,
·
maintain
reasonable costs to students consistent with the university’s mission,
·
increase
the effectiveness and efficiency of administrative operations,
·
integrate
costly but essential technology into academic and administrative operations,
·
fund
critical capital needs within a state system that provides only episodic
capital funding, and
·
ensure
that all revenue sources are being considered, maximized and leveraged
are
all components of annual budget considerations.
The
university’s recent introduction of an All Funds Budgeting (#47) (AFB) system
provides a comprehensive framework to identify academic goals and a concomitant
fiscal strategy for accomplishing those that advance the university’s overall
vision. AFB is designed to promote
greater understanding of all revenue sources that support unit budgets and to
encourage more attention to increasing revenue sources that units have more
control over. With a more transparent
allocation of revenues (for example, a direct allocation of tuition revenues to
generating units) and greater incentives to increase certain revenues by an
equitable and more aggressive allocation to the generating units (for example,
an increased F&A return to units), AFB seeks to foster a clearer
understanding of the effects of unit actions on revenues and the trade-offs
involved in expenditure decisions. AFB
stresses making priority decisions within available resources and leveraging
multiple revenues to advance strategic objectives. In addition, AFB provides units with more
flexibility in the use of limited resources to encourage the best possible use
of them. For example, revised budget
rules that permit the carryover of unexpended funds with a plan for the use of
those funds encourage more careful and more strategic planning for the longer
term use of funds. And AFB provides for
a clear process for making budget choices among all needs rather than a first
come, first funded or the squeaky wheel gets the dollars approach to allocating
scarce funds.
A
critical component of the AFB process are annual budget meetings that the
Executive Vice President for Academic Affairs and Chief Budget Officer have
with all deans and the provosts of the
To
inform its planning and resource decisions the university regularly considers
comparative data that benchmarks its standing relative to the other American
Association of Universities public universities or other appropriate peers.
(see standard
7, element 1 (#R30)) For
example, staffing, tuition/fee, and grant comparisons are important measures in
assessing both the outcomes of university expenditures and the university’s
relative reliance on particular revenues.
In
addition, the university submits outcomes data
(#27) to the Commission on Higher Education to demonstrate its progress in
advancing state goals within, or despite, the constraints of limited and
unpredictable state resources. These
data are also measures of the effectiveness of the university’s resource
allocation decisions and provide a public accountability component to the
university’s own internal assessments.
An accredited
institution is expected to possess or demonstrate the following attributes or
activities:
institutional resources required to support the
institution’s mission and goals;
The university sets its operating budget for the
following fiscal year by estimating expected changes in mandatory expenditures
(e.g., salary increases) and any newly expected spending additions and matches
it to expected revenues from all sources.
Because
The
The
resulting operating
budget (#R5) does not necessarily provide the level of support that the
university deems critical to adequately pursue its goals and objectives - in
recent years state funding
(#21), at best, has been unstable, with some years
reflecting severe reductions in state aid.
However, the final university operating budget in any one year reflects
the annual institutional resources available to support its mission and goals.
Given
the state’s inconsistent and insufficient funding patterns, the university has been
actively looking for innovative strategies to make
better use of resources, improve the management of debt, and enhance
revenues. The university created a Budget
Advisory Committee (#164) to plan for the budgetary shortfall that was
the direct result of the state slashing $66 million from the university’s
budget for the 2007 fiscal year. In
addition to guiding the university in making difficult budget decisions during
FY 2007 (#165), the work of the budget advisory group also led to the
formation of the Committee on Efficiency and
Entrepreneurship Initiative (CEEI) (#166). The CEEI
(#58) is comprised of a standing
universitywide committee (#168) and subcommittees
(#169) that have been involved in developing strategies for improving the
efficiency of university operations and expanding revenue streams. Areas that the committee has already
identified since its inception in September 2006 for short-term savings include
energy and information technology.
Recent efforts to conserve energy will save $30
million over 10 years (#170) and a
new site license agreement with Microsoft
will save departments money (#171).
The Academic Excellence Fund (#59, #59.10 through 59.19) is a component of the University’s budget
designed to fund special initiatives including: (1) responding to significant
opportunities for Rutgers based on existing academic strengths, comparative
advantages, the needs of undergraduate or graduate students, or the needs and
interests of the citizens of the state; (2) cutting across the boundaries of
schools, colleges, and disciplines and advancing novel multidisciplinary
interactions and ways of thinking; and (3) leveraging other resources committed
to furthering academic excellence at Rutgers.
In 2004, the university awarded more than $3million in grants to sponsors
of 37 original academic initiatives selected for the university’s first
Academic Excellence Funds awards. The
initiatives selected for funding represent a broad array of academic
disciplines on all three campuses at the university. The program has finished its fourth
year in 2006-07, by awarding $1.5 million in grants. For 2007-08, a grants budget of another $1.5
million is planned. The maximum that may be requested from the
Academic Excellence Fund for any one project is $250,000.
In
June 2006, the Board of Governors and Board of Trustees of the university
approved a comprehensive debt policy for the university. The Debt
Management Policy
(#173) is intended to provide an internal tactical framework for capital
planning and overall debt management.
The Boards of Governors and Trustees approved the Commercial
Paper program
(#174), which is anticipated to be used with respect to the financing of
capital projects, implementation of cash optimization strategies and to provide
financing for the costs of the acquisition and/or leasing of equipment.
Recognizing
the constraints on both state funding and student tuition and fees, the
university is also planning for a major capital campaign to generate additional
resources to advance its overall mission and goals. Planning
for the capital campaign (#R6) has
also entailed the process of measuring and assessing the level of institutional
resources required to support the mission and goals of the institution.
2. rational and
consistent policies and procedures in place to determine allocation of assets;
As noted in the prior item,
the university recently introduced an All Funds Budgeting (AFB) system. AFB includes an allocation of tuition to
generating units in recognition of both the responsibilities of the school of
matriculation and also the unit providing instruction. The allocation of tuition also recognizes the
administrative and support costs that are funded with tuition revenues.
In addition, returns to the
generating units for F&A, summer and winter session profits and continuing
education profits are all clearly delineated.
To encourage greater focus on these revenue streams in a period of
extremely volatile state support, the returns have been increased
significantly.
Similarly, increases in state
appropriations are allocated both to foster universitywide strategic objectives
and to units in accordance with principles to advance the university’s overall
goals.
This transparent allocation of
resources and a clear explication of the costs that must be covered is designed
to promote greater understanding of resource choices and to facilitate more
strategic thinking.
On the capital side, the
choice of capital projects for inclusion in the university’s capital program
was made only after discussion among the Chief Academic Officer, the campus
provosts, and the Vice President for Administration and Finance so that all
campus and administrative needs were fully vetted and the allocation of scarce
capital resources was fair and equitable.
The university relies on a
variety of policies and procedures to aid in the allocation of institutional assets. These include the following:
·
Responsibilities and
duties for universitywide budget planning and implementation procedures are
clearly stated in the Rutgers University Policy Library (#176)
·
Procedures for the disbursement
of extramural awards are documented by the
Division of Grant and Cost Accounting
(#177). These documents include policies and procedures
(#178) on cost sharing, facilities and administrative costs, fringe benefit
rates, human subject rates, etc.
·
Policies of the
Office of Continuous Education ensure the proper distribution of assets
derived from Summer and Winter sessions (#179). The Office of Continuous Education also has
established requirements regarding its operation within individual units of the
university
·
Policies are in
place to distribute endowments held by each academic unit of the university
(e.g., how much is available each year and how much is reinvested against
inflation) (Rutgers Policy 40.2.14.C
(#180))
·
The negotiation of
contracts with unions that represent various groupings of faculty and staff. The labor bargaining process results in collective
bargaining agreements (#181, #181.10 through #181.18) that determine
how a substantial portion of the university’s operational budget is distributed
·
The process for
distributing merit pay awards among faculty and staff, as stipulated in Faculty Academic Increment
Service Program (FASIP) (#182, #182.10 through #182.14) and Pay for Performance
(#183, 183.10 through #183.21) guidelines
·
The use of
information technology resources in support of
the university’s mission of research, teaching and service. The IT Project Governance Committee (#184)
is a universitywide
group of faculty and staff (#185) that is charged with
establishing priorities for allocating central administrative computing
resources
·
The Rutgers
University Libraries allocates its budgeted resources in accordance with its strategic plan (#85) (at pages
1 and 7) and the academic priorities of its constituents
3. an allocation
approach that ensures adequate faculty, staff, and administration to support
the institution’s mission and outcomes expectations;
One of the key attributes of All Funds Budgeting is that
it clearly links planning and budgeting.
Through All Funds Budgeting (#R4), academic units set
annual operational budgets that determine levels of faculty, staff and
administrative support needed are carefully considered. AFB requires that choices be made within
existing or planned for resources. This
focuses planning on the trade offs of various ambitions and needs and
encourages strategic and long range thinking but with a clear knowledge of the
likely resources that will be available.
Faculty
Utilization Reports (#188) are
produced every year to assist deans and senior administrators in the planning
for and process of hiring faculty.
The hiring of faculty and staff is strongly influenced by Affirmative Action/Equal Employment Opportunity Guidelines for Recruitment and Selection (Affirmative Action/Equal Employment Opportunity Guidelines for Recruitment and Selection of Faculty (#189) and Affirmative Action/Equal Employment Opportunity Guidelines for Recruitment and Selection of Staff #190)), and by the university’s firm commitment to diversity. Various university studies and initiatives reflect this support for pursuing diversity and excellence in the workforce:
·
A Study of Gender Equity in the Faculty of
Arts and Sciences, Rutgers University-New
·
Actions Taken to Implement the
Gender Equity Report (#193)
·
As the Workplace
Turns: Affirmative Action in Employment (#194)
·
Office of Faculty
Diversity (#195)
·
President’s Report on Progress Toward
2006-2007 Strategic Goals (#13) (at pages 5, 6, and 13)
·
President’s Report On Progress Toward
2005–06 Strategic Goals (#14) (at pages 3, 12, and 13)
·
Office for the
Promotion of Women in Science, Engineering, and Mathematics website (#198)
In addition, the most recent agreement (#199) between the university and the AAUP-AFT includes a provision for the establishment of a Faculty Development Fund which will assist in the hiring of additional full-time tenured and tenure-track faculty.
4. a financial
planning and budgeting process aligned with the institution’s mission, goals,
and plan that provides for an annual budget and multi-year budget projections,
both institution-wide and among departments; utilizes planning and assessment
documents; and addresses resource acquisition and allocation for the
institution and any subsidiary, affiliated, or contracted educational
organizations as well as for institutional systems as appropriate;
As noted in the
prior items, the university’s All Funds Budgeting system is designed to align
the goals of the university with budget planning. While one of the goals of AFB is to promote
longer term planning and budgeting, the extreme volatility of state funding,
especially in recent years, coupled with several years of legislative tuition
caps has made long term budgeting difficult.
Indeed, the pattern of recent state support has been described as a
roller coaster, encompassing the largest shortfall in state funding in the university’s
history amidst a pattern of ups and downs.
While this instability of a major revenue stream has made planning
difficult, it has also emphasized the importance of the AFB system with its
attention on aligning plans with resources and on increasing other sources of
funds to reduce the university’s reliance on state appropriation.
The university is
also highly unionized being one of the few AAU publics with a faculty
union. The university’s preparation for
negotiations with the various bargaining units representing faculty and staff
at
Recent agreements (#199) with
faculty unions show how these negotiations are closely aligned with broader
institutional goals by example of agreement to establish a multi-year fund for
recruitment and hire of new faculty that will enable
In order to provide guidance in the area of debt management, the Board of Governors adopted a debt management policy (#173) in June 2006. The debt policy formalizes the link between the university’s strategic planning process and the issuance and management of debt, and relates to all forms of debt financing including long-term, short-term, fixed rate, and variable rate debt. The policy relates to other forms of financing including both on-balance and off-balance sheet structures such as leases, and other structured products that impact the credit of the university. The policy also contemplates the use of financial derivatives that may be used in managing the university’s debt portfolio and in structuring transactions to best meet the university’s financial objectives within an acceptable risk tolerance.
Although it is a public institution,
5. a comprehensive
infrastructure or facilities master plan and facilities/infrastructure
life-cycle management plan, as appropriate to mission, and evidence of
implementation;
Unlike in many other states where capital funding is
provided on a regular basis,
Though direct state support for capital development projects in the higher education sector has been limited, the university does submit an annual request for funding of capital projects (#204) to the New Jersey Commission on Capital Budgeting and Planning (#205), the statewide agency charged with capital planning. This annual request is developed through the Rutgers Capital Planning Program, which enables the university to plan, prioritize and organize future capital expenditures. A record of physical planning activities over the last ten years is presented here (#206, #206.10 through #206.15). In addition, the university uses the facility condition analysis system (#207) to help guide the process of life cycle management. Guiding all of the university planning for capital projects is its Facilities Master Plan (#R9).
And the university has
developed a list of highest need capital projects that will be funded with
university bonding. The first phase of
this plan calls for $350m in projects including $75m in deferred maintenance to
offset at least some of the backlog of maintenance. Planning for the use of university funds for
capital is being done within the debt policy that was recently adopted by the
Board of Governors.
6. recognition in the comprehensive plan that
facilities, such as learning resources fundamental to all educational and
research programs and the library, are adequately supported and staffed to
accomplish the institution’s objectives for student learning, both on campuses
and at a distance;
As noted above, All Funds
Budgeting is designed to align the university’s goals with its resources. Plans
must demonstrate that adequate support is available in order to be
approved. In addition, the university regularly
reviews its standing relative to its AAU public peers on such measures as
library collections. These analyses help
to shape the relative priorities of various needs. It is important to note that both the
allocation of resources and the significant cuts that the university absorbed
in FY2006-07 placed highest priority on instructional units in recognition of
the university’s primary academic mission.
Academic support units like the library and research centers are in a
second priority tier with administrative units bearing larger proportional cuts
and smaller proportional allocation of funds.
Comprehensive plans for
universitywide support and staffing, undertaken by central divisions, such as
the Office
of Informational Technology and University Libraries (#R22) are
complemented at the decanal level through various funding and planning
mechanisms including all funds budgeting (#R4), capital campaign planning (#R6) and
individual unit planning and allocation processes.
7. an educational
and other equipment acquisition and replacement process and plan, including provision
for current and future technology, as appropriate to the educational programs
and support services, and evidence of implementation;
Educational and other acquisition and replacement processes operate on two levels: a central process of acquisition and replacement occurs through the Office of Institutional Technology, and units and departments pursue their respective processes as needed. Information on these central activities since the last decennial middle states self-study is found in the report titled Information Technology Support for Activities Examined as Part of the 2008 Middle States Commission Accreditation at Rutgers, The State University of New Jersey (#212). The report presents a breakdown of central Educational Technology (ET) funding sources and describes various replacement strategies and budgeting maneuvers that have occurred during this period. The following annual reports provide evidence of implementing upgrades and improvements to the university’s ET infrastructure: New Brunswick Computing Services, 2005-2006 Annual Report (#133) and Newark Computing Services - Annual Report - Fiscal Year 2005/2006 (#134).
Under the direction of interim Vice President for Information Technology and interim Chief Information Officer, Donald Smith, the university is presently conducting a comprehensive self-study (#218) of the university's IT resources, services, and working relationships, building on the university-wide IT Strategic Plan (#86) completed in August 2006. The goal of the self-study is to ensure that Rutgers' IT resources are used to their full potential in serving administrative, instructional, and research needs across the university.
The state has in place a
revolving fund for the replacement of academic equipment called the Equipment
Leasing Fund. This has provided
critically needed support for equipment at colleges and universities across the
state. Recent difficult budget years in
Having reviewed the provisions
of the Sarbanes-Oxley (SOX) Act to assess its own controls and to determine if
there were additional best practices the university should adopt, the
university operates under what might be termed a SOX model adapted for public
higher education and its mission. For
example, the university created a Committee on Audit several decades ago. The committee, whose membership is drawn from
The university’s internal
audit department (#220) reports functionally to the Audit
Committee. This reporting line ensures a
high degree of auditor independence and authority.
In addition to the Audit
Committee, the university also has several other committees with substantial
oversight responsibilities in areas related to finance (e.g., Budget and
Finance, Buildings and Grounds, Executive Compensation and Nominations, and
Investments.)
An overview of some of the
institutional controls that deal with financial, administrative and auxiliary
operations is found in President McCormick’s testimony
to the New Jersey Legislative Task Force on Higher Education and the Economy
(#221). In addition, President McCormick
recently expressed the university’s commitment to responsible business
practices in a letter to the Rutgers
faculty and staff (#222).
The Office of the Controller
plays a major role in ensuring that adequate financial controls are in
place. Some of these controls or
processes overseen by the controller’s office include:
·
Financial Audit statements for the University.
o
2006 (#223)
o
2005 (#224)
o
2004 (#225)
·
Audit Reports
for post-awards federal grants (#226)
· Audit Reports for post-awards state grants (#226)
Oversight of controls on purchasing – Rutgers Integrated Administrative
System (#228) (RIAS), which is Rutgers’ online purchasing system (RIAS
Training Manual (#229)) and the
Because the research enterprise is
a critical component of the university’s identity and mission, it is paramount
that
·
Policies and Procedures Concerning Grant and
Contract Accounting (#231)
·
Policies
and Procedures for Cost Sharing on Sponsored Programs (#232)
·
Travel, Travel Incidentals, and Meal Expense Policy
(#233)
·
Equipment Inventory and Property Management (#235)
The Internal Audit Department
provides another layer of oversight to university operations through promoting
modern internal control concepts for departments and offices to use. Internal Audit serves as the arm of the Board of
Governors (#220) so its audits are independent of the Office of the
Senior Vice President for Administration and Chief Financial Officer, to which
it reports only for administration oversight.
Internal audit provides services (#237)
that include system assessment, departmental audits and follow-ups, audit
investigations, advisory services, etc.
·
Rutgers University Financial Report 2005-2006 (#223)
·
Rutgers University Financial Report 2004-2005 (#224)
·
Rutgers University Financial Report 2003-2004 (#225)
10. periodic
assessment of the effective and efficient use of institutional resources.
As described in the prior items, one of the critical components of the AFB system is the annual meetings between the Executive Vice President and Chief Budget Officer and the campus provosts and deans. These meetings not only review plans and associated budgets but they also consider the effective use of resources previously allocated. This continuous loop between planning, budgeting and accountability for the use of resources is at the heart of AFB.
Assessment of institutional
resources at
Through the New Jersey President’s Council and the state’s program approval process (#64), requests for new programs must not only meet criteria for need, but must also demonstrate that they are not duplicative of other existing academic programs and are not unduly expensive.
Beyond the budget review process,
the state legislature through the Task Force on
Higher Education and the Economy has been
actively
involved (#44) in evaluating how state colleges and universities can
contribute to state economic development.
A particular concern of the Task Force has been over how the research
sector of the state’s higher education system is currently structured. It has continued to examine if and how
State assessment of institutional resources also occurs through the New Jersey Commission of Higher Education (CHE). CHE reviews budget requests (#245) from individual state public colleges and universities and approves capital projects (#245) financed by various higher education bond acts. In addition, the Commission on Higher Education annually reviews the university’s progress relative to statewide goals, thereby providing a public accounting for its use of its funds.
As noted in standard 1, element 1(d) (#R11) the President of the university regularly reports to the Board of Governors and the Board of Trustees on progress made in achieving university goals and objectives, which necessarily includes the effective and efficient use of institutional resources.
·
Report and Recommendations in Response to
Charge S-0311, Electronic Applications for Admission (#251)
·
Report
and Resolution on Proposed Reduction in State Funding (#252)
Over
the last few years, the university moved from perfunctory reviews of individual
departments and/or programs to more strategic reviews of either specific areas
of study or interdisciplinary clusters.
Through the Committee on Academic Planning and Review
(#R7), the aim of these evaluations is to determine how University resources
can be most effectively used in supporting a specific disciplinary area and in
the case of a cluster review to consider how the contribution of related units
taken together can be greater than the sum of their individual
contributions. Beginning in 2007-2008,
CAPR will also assess policies and practices connected with
The Center for Organizational
Development and Leadership seeks to advance
organizational
effectiveness through assessment, planning, and service improvement. As part of this effort, the office often
undertakes studies that contribute to the university’s utilization of
institutional resources. These
evaluations have included assessments of the university’s
progress in reducing “red tape (#131) ” ten years
after an initial university study and of the university’s
continuing effort to improve student services (#R17).
Another important source of review
of the effectiveness of administrative structures and services occurs through
the Center for Organizational Development and Leadership (ODL) at
The Committee on
Efficiency and Entrepreneurship (#166) is a universitywide committee
that has been actively engaged in the review of all university processes in the
effort to make the best use of
The Task Force on Transforming Undergraduate Education and subsequent implementation process (#R18) is an effort that is geared not only to enhancing the academic and student life experience of undergraduates at Rutgers-New Brunswick but to improve how the university uses its resources in delivering a high quality undergraduate education to its students (#260).
A Matrix of Education Support
Technology (#261) provides an overview of goals for education support
technology at