The Queen鈥檚 Activity Based Budget Model
In 2013 the university adopted a new activity-based budget model, intended to provide greater transparency and stronger linkages to academic goals and priorities.
The activity based-budget model attributes revenues to the Faculties and Schools, which generate the revenue. The Faculties and Schools in turn bear indirect costs to support shared services (e.g., the library, IT), student support, and a university fund for institutional priorities. These indirect costs include a charge for space occupancy, highlighting the cost and value of space as an expensive and scarce resource. This change has had a positive impact on space utilization and accountability.
The net budgets (gross revenues less indirect costs) of the Faculties and Schools support the direct costs of these units, including, of course, the provision of their education programming.
Increased revenue and cost savings will remain in the academic unit that generates the change, providing a strong incentive to be innovative in programming and enrolment planning.
Revenue not directly attributable to Faculties and Schools, such as investment income and unrestricted donations, adds to the contributions from the Faculties and Schools in supporting the university fund. The Fund is used to support the cost of transfers from Operating to Capital, payments to Faculties and Schools to avoid disruptions that could otherwise accompany the introduction of a new budget model, infrastructure renewal, administrative system implementation, a central contingency and a small number of other Board priorities and compliance initiatives.
The new budget model will not, in and of itself, increase net revenue for the University; it is simply a different method of revenue and cost allocation. It is designed, however, to encourage Faculties and Schools to increase revenue and constrain costs, enhancing financial opportunities within their academic units and to the University as a whole.