Accountability and Governance at UBC: Budget

By Professor Mark Thomson Mac Lean

Over the past months I have become increasingly concerned about the disparity between UBC’s growing tuition revenues and enormous budget surpluses, and the struggles that many academic departments face in meeting their teaching and research missions. Conversations with colleagues and student leaders across campus tell me that I am not alone in having such concerns.

As a long-time faculty member in the Faculty of Science, I have never seen a detailed version of our faculty’s budget. Indeed, when a (now former) head asked for information about the internal funding formula for departments in Science, they were given the key factors used in determining a department’s funding allocation, but they were not given the weightings nor any other details of the exact calculations. It is difficult to understand why such information would be kept from the faculty given that one presumes a faculty’s budget model is meant to drive our collective behaviour in some way by indicating how each of our activities is valued. Certainly this secrecy has the effect of undermining confidence in any financial decisions depending on these secret data.

This is but one example of a problem in accountability and governance from a culture in which financial reporting is done with such limited detail that it is impossible for any reasonable numerate person to judge if the money is being spent well in furtherance of the academic mission at UBC. What purpose does the resulting secrecy serve? (The number of confidential items in a budget is small – things like salaries under $75K, which are not publicly reported otherwise.)

Beyond keeping the faculty (and the students and the public) ignorant of financial details, this secrecy seems to mean that the Board and Senates may not be getting (or asking for) financial information at a level of detail sufficient to judge whether academic programs and research activities are being properly supported. How can a budget proceed through consultations with the Senates to Board approval without evidence that this budget allows us to fulfill the university’s academic mission?

Comparing 2015 to 2018 financial statements for the university, one notes growth at rates of 21.9% for Administration expenses and 26% for Community Engagement expenses over this time period, but a growth rate of 15.7% for Learning and a scant 4.4% for Research over this same time period. Tuition revenues seem to have increased a remarkable 44% during this period.  Are the Board or Senates asking questions about the story UBC’s recent financial statements tell the university community and the public about the relative importance of our academic mission?

The University Act makes the President responsible for producing the budget in consultation with the Senates. The President then submits the budget to the Board, who are to analyze it and then adopt it with or without modifications. I note the use of the word “analyze” in the Act and choose to believe that this means the Board will take measures to ensure they have enough financial and operational information to do the analysis they are required by law to do.  At its best, this process involves strong communications and cooperation between the President, the Senates, and the Board, and the result should be a budget that helps us achieve our goals as a university.

I would have more confidence in the governance of UBC’s budget process if I were to see processes and procedures put into policy and practice that support a higher level of public accountability for all involved in the budget process. Secrecy should be eliminated entirely in these processes, and confidentiality should only restrict information that the law requires be kept private.

To that end, I make the following two recommendations.

  1. Reporting on the State of Academic Units and their Programs

Recommendation: The Board should ask the President to create reporting requirements for Deans to present the Board and Senates with sufficient financial and operational details of their Faculties for the Board and Senates to independently assess the on-going state and health of individual academic departments and programs as part of the annual budget process.

Rationale: UBC’s Board of Governors and Senates do not receive enough information about the financial state and the operational state of each academic department to assess how well these departments are able to carry out their research and teaching missions.  The high-level budget reports for Faculties are not presented from the perspective of how the distribution of resources in the Faculty supports or limits the academic activities of individual departments. There are no reports on the operational state of each academic department in a Faculty that inform the budget process.

The level of detail in such reporting should enable the Board and Senates to independently assess whether:  (1) Department X is able to sustainably meet its teaching obligations to its own programs and to those programs it serves; (2) Department X is able to sustain a healthy graduate program; (3) Department X has the resources the faculty need (including time) to run healthy, top-tier research programs; and (4) the facilities assigned to Department X are sufficient for it to carry out its research and teaching missions to the standard expected of a department at a top university.

Why is it important to have a significant level of detail about each academic department in a Faculty to inform university-wide decision making? Examples: (1) Expanding enrolment in programs to meet demand from students and creating new programs in Faculties require that new resources be deployed to many academic units, both within and outside a given program’s host Faculty. Any lack of a proper analysis of the impact of such expansions on our students, and any resulting failure to ensure adequate resources have been deployed where needed destabilizes programs and creates uncertainty about UBC’s ability to meet its students’ needs. (2) Decisions to compete for Canada Excellence Research Chairs (CERCs) need to be done on the basis of a full analysis of the impact such a commitment will have on the academic department involved and the Faculty as a whole. (3) On-going assessment of whether the budget supports the University’s core mission and its strategic plans requires detailed information to the level of an academic department because academic departments are the true functional units of the academy.

Currently, each individual academic department undergoes an external review every five years. While the external review reports are valuable documents, they are not designed to be central to the annual budget and planning exercises of the Faculty or the University, and so they lack important information, key analyses, and institutional perspectives. These external reviews also do not invoke the same high level of accountability that a Board and/or Senates mandated annual report would since these reviews currently have little bearing on budget decisions.

  1. UBC budget model failures

Recommendation: UBC’s budget model should take into account the fact that the academic department, not the Faculty, is the fundamental functional unit of the University when it comes to the core research and teaching missions. In particular, UBC’s tuition revenue distribution model should track student enrolments to the level of the academic department. Moreover, the distribution of BC Provincial Government Grant monies should be consistent with both the teaching and research requirements of the departments.

Rationale: The current budget model for the distribution of tuition revenues assigns money to a faculty based on that Faculty’s enrolments. There is no requirement that the Dean distribute tuition revenues to academic departments based on their course enrolments, which leaves some departments underfunded and struggling to meet their teaching obligations. The current model also creates funding shortfalls in academic departments with significant numbers of students from outside the department’s home Faculty.  These funding shortfalls undermine some departments’ efforts to provide even adequate teaching and learning support for students, and threaten the health of their graduate and research programs.  (And we should strive for more than adequate when it comes to the academic experiences we offer our students, of course.)

It is unclear what budget model is used for the distribution of government grant monies within a Faculty. This model should be made clear to the faculty, and it should be made consistent with the principle that the academic department is the fundamental functional unit of the University.

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