Principles of the Model
The following principles were established to guide the Steering Committee in the development of the Waterloo Budget Model for the operating budget (in alphabetical order):
- Academic excellence: Consistent with the University and Faculty strategic plans, academic excellence and quality learning experiences for students will be at the forefront of every decision made within the new budget model. This necessarily implies that students will learn in the Faculty that makes most sense to their overall academic program.
- Clarity: Methodologies, record keeping and key processes in the new budget are clearly communicated and understood.
- Collaboration: The new budget is developed, implemented and supported through collaborative and consultative relationships and structures.
- Efficiency: Revenue will be allocated and used to support existing and new resources, structures and processes, and all Faculties and Academic Support Units will be mindful of reducing and containing costs.
- Long term budget planning: The new budget model will incorporate budget planning at all levels of the institution with a longer term outlook.
- Risk management and flexibility: The new budget model will include mechanisms to minimize negative impact from changing funding, enrolment or costs and be able to allow an optimal and nimble response to unanticipated or unfavourable funding conditions.
- Strategic alignment: The new budget model will support the approved overall strategic direction of the university and aligns to academic support, Faculty and academic strategic plans.
- Support for strategic initiatives: The new budget model will ensure that there is a reserved portion of revenues in the Provost office available to stimulate and develop strategic initiatives and institutional priorities guided by clearly articulated academic and business plans.
- Transparency and accountability: The University will have a transparent resource allocation process across the Faculties and Academic Support Units with clear data analysis and evidence to support decision making.
Fund Accounting and the Waterloo Budget Model
The University uses an accounting principle known as 'Fund Accounting'. Money is segregated in several different Funds, depending on their source and purpose. Most Funds (including Research, Trust and Endowment) have very specific purposes attached to them; the way that the University must spend that money is clearly prescribed either by legislation, or by agreements with the granting agency or donor.
The Fund that is the largest, and the one where the University has the most flexibility on spending, is the Operating Fund. Because of its size and flexibility, the University developed the Waterloo Budget Model for distributing this Fund. The Operating Fund is the only Fund for which the University developed the Budget Model.
All of the Funds are described below.
Operating
Fund
The
Operating
Fund
is
used
for
the
majority
of
expenses
including
faculty
and
staff
salaries,
utilities,
student
support,
and
supplies.
The
two
major
sources
of
revenue
that
contribute
to
the
Operating
Fund
are
the
operating
grant
from
the
Ontario
Ministry
of
Advanced
Education
and
Skills
Development
(MAESD),
and
student
tuition
fees.
The
Waterloo
Budget
Model
applies
only
to the
Operating
Fund;
it
provides
a
methodology
for allocating
the Operating
Fund to
units
across
the
University.
Research
Fund
The
largest Fund,
after
the
Operating
Fund,
is
Research.
When
money
is
given
to
the
University
for
research
purposes,
the
terms
of
use
are
very
clearly
spelled
out;
the
University ensures
that the
Research
Fund
is spent
for
the
purposes
intended
by
the
granting
agent.
Trust
Fund
and
Endowment
Fund
The
University
has
many
trusts
and
endowments,
most
of
which
support
scholarships,
Chairs,
and
student
activities.
As
with
the Research
Fund,
the
University
acts
as
a
trustee
for
these
monies,
and
must
ensure
that spending
is
in
accordance
with
the
specific
Terms
of
Reference
for
that
donation.
Capital
Fund
Each
year, MAESD
provides money
specifically
to
support
building
repairs
and
related
maintenance
and
alterations.
Ancillary
Fund
Ancillary
enterprises
include
Housing
and
Residences,
Retail
Services,
Food
Services
and
Parking;
revenues
earned
are
placed
into
this
fund.
The
ancillary
enterprises pay
the
University for
space,
utilities,
administrative
services,
and
maintenance
from
the
revenues
they
receive.
Allocation of Operating Fund
The Waterloo Budget Model describes how the Operating Fund revenues are allocated to Faculties, Academic Support Units, and the University Fund. Within a given Faculty, the model does not describe how money flows to Academic Departments or Schools; the internal allocation of funds is at the discretion of the Faculty.
