FAQ

In 2018, Boise State implemented Bronco Budget 2.0 (BB 2.0), an incentive-based budget model for academic revenue units (i.e., colleges). This model employs a formula-based approach that computes marginal annual changes across several key indicators: student credits hours (both graduate and undergraduate), undergraduate majors, and undergraduate degree graduates (for domestic and international students). The BB 2.0 revenue comprises a portion of a college’s budget, along with decision-based subventions, and other instructional support funds such as those utilized for graduate assistants. The model covers Base Funds only (i.e., appropriated funds) and does not include academic degree programs funded through alternative means, such as self-support or online fees.

For campus units outside of academic colleges – administrative and support units, research, and auxiliary areas – the current practices are largely based on an approach called incremental budgeting. That is, budgets are based on historical practices and budget requests are prioritized (approved or denied) through the University’s annual budgeting process. The same practices are generally in place for additional funding requests from academic areas. The annual process is primarily concerned with approval of Base Fund requests that are managed centrally as part of position control, but may require use of one time funding.

Boise State is fortunate to have a strong and sure financial footing, and we want to make sure we can sustain it. Doing so requires us to have a model that balances our revenues and expenses. The budget model we use does not make the pie of available funds any larger or smaller but changes how the slices are distributed.

There are many areas of the university that will continue to increase in cost, including utilities, insurance, construction/repair, technology, and other essential components of our infrastructure. Boise State relies heavily on tuition and state funding, which means we must have a budget model that allows for flexibility in order to adapt to changing conditions if and when necessary.

A primary objective of the initiative is to expand and improve the existing budget model to account for costs (expenses) in addition to revenue for the entire university. This approach will incorporate previously excluded academic programs (such as online and self-support), will identify expected levels of service for administrative areas (which primarily operate under a budget approach called incremental budgeting), and will improve on the design of our current model (i.e., carry forward lessons learned from Bronco Budget 2.0).The vision is to align the university under a single budget approach sometimes described within higher education as “all funds, all areas” budgeting.

While there are predictions of an enrollment decline nationally, we are in a thriving city in a thriving region, and we are likely to have relatively mild impacts from this demographic shift. Even so, we need a model that ensures sustainability when facing impacts we can anticipate and those we cannot. Boise State is financially healthy, and we want to keep it that way.

Because the university is in sound financial shape, now is the optimal time to implement a new model; it is much more difficult for institutions to successfully adopt new budget models during financially difficult times.

The budget modernization initiative aligns to Goal 4 of the University’s Strategic Plan, Blueprint for Success, to “create a transparent, centralized business operations model that responsibly uses university resources, supports collaboration, and promotes consistency across individual campus units.”

A new budget model will help support all goals of the Blueprint for Success by increasing transparency in financial decisions and build/enhance trust on campus. Transparency will help us better understand how strategic decisions are made, helping us prioritize initiatives for student success, research, innovation, and community engagement, which are goals of Blueprint for Success.

Executive leadership will continue to balance opportunities to advance all five goals against available funding. Most RCM style budget models have a centrally held reserve from which strategic priorities are funded. We expect to have centrally held reserves and a transparent mechanism that will be used to advance the Blueprint goals and objectives.

Responsibility Center Management (RCM) budgeting is a decentralized financial management model that assigns responsibility for revenues and expenditures to a “Responsibility Center (RC)” within a university. Examples of RCs in a university setting include colleges and auxiliary units, such as student housing or athletics. RC’s are distinguished from administrative and support units since they generate a significant portion of the institution’s revenues and are therefore responsible for a portion of attributable expenses.

The underlying premise of RCM is that the model entrusts RC leaders with more control of financial resources and enables localized decision-making (e.g., at the college level rather than centrally). This approach aims to align financial accountability with decision-making authority, promoting greater transparency, efficiency, and entrepreneurial spirit within the university community.

Traditional budgeting methods often rely on incremental or formula-driven approaches, which allocate resources based on historical spending patterns or predetermined ratios. In contrast, RCM budgeting emphasizes a data-driven approach, linking resource allocation to actual activity levels, such as student enrollment, credit hour production, research expenditures, sales and services, and external funding.

In their 2013 book, Curry, Laws, and Strauss illustrate fund flows through traditional vs. RCM budget models. In a traditional model, revenues from state appropriations, tuition and fees, and other sources flow into a central university fund and then are allocated to schools and colleges and administrative units as expense budgets. In an RCM model, revenue flows instead to the areas that generate the revenue (e.g., schools and colleges generate credit hours which generates revenue, housing generates revenue through room and board, etc.) and then funds are allocated to administrative units and other central university operations using methods determined by the given institution.

RCM budgeting offers several potential benefits for universities, including:

• Increased transparency and accountability. Units have a clearer understanding of their financial situation and are held responsible for managing their resources effectively.
• Enhanced stewardship of funds. Units are incentivized to make informed financial decisions that align with their strategic goals and priorities.
• More resource decisions made locally (e.g., at the college level) vs. centrally.
• Supports integrated and informed budget planning.
• Incentives for entrepreneurship. RCM encourages units to explore new revenue streams and develop innovative programs and services.
• Data-based foundation for resource allocation that accounts for both revenues and expenditures and is guided by institutional values and goals.
• Reduction of unnecessary administrative costs (e.g., chargebacks and other unnecessary internal transfers)

Implementing RCM budgeting requires careful planning, communication, and training to ensure a smooth transition from traditional methods. Potential challenges include:

• A need for intentional design to allow institutional leadership the flexibility to make central investments to advance strategic priorities and/or the common good.
• Barriers to the shift in financial management responsibilities, including resistance to unfamiliar practices. These may require additional time allowances for adapting to the new approach.
• The complexity of implementation and management of the new model. Establishing a robust system for collecting and analyzing financial data is crucial for effective RCM implementation.
• Developing and maintaining relationships and ongoing communication between central administration and responsibility center leaders to foster trust and connection.
• Decentralization leading to duplication of programming and services if not implemented correctly.
• Ensuring fairness and equity. The budget model should be designed to allocate resources equitably across different units while also recognizing variations in their activities and contributions.

Overall, RCM is a valuable budgeting approach that can be used to improve resource allocation and decision-making in higher education. It is important to keep potential challenges in mind when integrating the specific needs of Boise State into the overall model design.

No, there is no known “best” RCM model for higher education institutions. Most institutions adapt theoretical models and adjust them so they can meet specific institutional needs. While Boise State has and will continue to consider other institutions for examples (both of what to do and what not to do), we intend to develop a model that is unique to Boise State.

In addition to numerous R1s using RCM style budgets, there are R2 institutions that have some version of RCM budgets: University of Vermont and the University of Toronto (Canada), as well as other public institutions like Southern Illinois and the University of Alaska have some version of RCM budgets.

As part of the pre-planning process, the facilitation team contacted over 30 institutions about their RCM budget approach, including multiple R2 institutions. Two institutions were selected for site visits based on their history and development with RCM-style budget models. Due to unforeseen circumstances with the planned third institution (University of Vermont), virtual meetings were held instead with their selected institutional leadership. Teams of six members of the Boise State Pre-Planning Advisory Committee visited the University of Minnesota and University of Virginia in the summer of 2023. Information shared from these two institutions is available in the “resources from visited institutions” folder of the Google Drive, which is accessible to Boise State employees.

Bronco Budget 2.0 will continue until the new model is deployed on July 1, 2026. The FY26 budgets will be developed based on Bronco Budget 2.0. The University Budget Model (UBM) prototype will be shared during FY26 for a shadow year, which enables leaders of RCs to understand the similarities and differences between their budgets under the two approaches and engage in planning to assist their areas for FY27.

No. The budget modernization process intends to leverage existing tools and systems already in use on campus and there may be enhancements or improvements to the ways we are currently using these systems. There are no plans to change technology systems as a result of budget model modernization. There may be future needs for infrastructure improvements that impact the budget model.

No. Boise State already uses a narrow version of RCM with BroncoBudget 2.0 that is limited to the revenue side and is applied to academic colleges only. Executive leadership decided to explore a more robust and more expansive implementation of an RCM-like budget approach for all units across the university (including administrative and auxiliary units in addition to academic colleges), and for not only revenue but expenses. The goal is to align the university under a single budget approach sometimes described within higher education as “all funds, all areas” budgeting. We are committed to updating our budget process while continuing to use an RCM approach. We are tailoring the approach to Boise State’s unique values, circumstances, needs and opportunities. Moreover, during the discovery process through townhall listening sessions and the discussions in the four working groups, we were able to work through questions and concerns, incorporate suggestions for the budget model prototype and gain confidence in the process that an RCM-style budget model is going to be a robust, transparent and comprehensive budget modeling solution for Boise State.

The Planning Advisory Council (PAC) has used a variety of ways to gather input from the campus community and to keep the campus updated on the project, including:

• Stakeholder interviews
• Campus listening sessions
• Working groups consisting of representatives from across campus divisions and employees in different roles
• Topical focus groups sponsored by the working groups
• Regular updates and discussion with the three campus governance bodies (faculty senate, professional staff association, and ACE)
• Budget modernization email account for individuals to ask questions or provide input
• Email updates from the executive sponsors 
• Posting minutes of PAC meetings 
• Updates to the budget modernization website
• Regular updates at Academic Leadership Council and other leadership meetings 
• Communications via the Campus Update and other newsletters

Updating the budget model of the university is a large undertaking. In addition to internal resources dedicated to the project, Kennedy has offered subject matter expertise, provided supplemental resources (e.g., additional capacity solely focused on the project), and shared an outside and informed perspective. During the Discovery Phase, Kennedy focused on the following:

• Project initiation and project management
• Change facilitation and communication plan
• Stakeholder engagement, data collection, and analysis / discovery
• Working Group Roadmaps for decisions and key considerations 

During the model prototype development, K&Co has assisted with:

• Reviewing model components to ensure they reflected Roadmap insights
• Refining the presentations for executive sponsors and other approval groups
• Outlining source, normalization factor, and per-unit allocation for each revenue and expense incurred
• Outlining allocation of costs and revenues and provided all calculations, assumptions and relevant information
• Capturing, vetting, verifying and refining all data necessary for developing the prototype
• Determining the mechanism to allocate tuition revenues and state appropriations
• Participating in the March Budget Model Review Sessions
• Participating in the April Town Hall Sessions

Kennedy has not made decisions about what our model will look like; rather, they have advised and guided us on the types of decisions that need to be made and those decisions have been made internally.

The shadow year will run from July 1, 2025 – June 30, 2026 and represents a time that the University Budget Model (UBM) runs in tandem with the current university budget model approach. This provides the opportunity to develop the governance process, identify stakeholder needs for reporting and review the model for any fine-tuning that may be needed prior to full implementation.

Governance within the model is essential to its success. Part of that governance will establish governing rules that outline what types of services will be centralized and are not eligible for duplication. Decentralized services will be the exception and not the rule. Similarly, curricular governance by faculty will continue and even be bolstered under the new model. For example, currently the General Education Committee carefully monitors and governs courses approved under the University Foundations program to ensure that disciplinary expertise is honored and reflected in approved general education offerings.

The UBM allocates funds to the colleges; colleges are responsible for administering budgets for their units. The intention of the UBM is to place primary ownership of budgets in the care of the units utilizing those funds, and as a result college leadership will have more responsibility and control of revenues and expenses.

As steward of public funds, all areas will continue to be expected to utilize funding efficiently and effectively, just as we are today. The implementation of the UBM will not identify new funds, nor will it remove funds from central services as they exist today. The needs of the university may change in ways that affect resource allocation, and the university may at times need to respond to factors affecting overall operations. If such circumstances arise, university leadership, not the budget model, will determine what changes must be made.

Budget Modernization is a university-wide initiative supported by university leadership and has incorporated thoughtful work and feedback from faculty, staff, and units across campus. As members of leadership transition to other roles, the initiative will continue to move forward as planned. The importance of this work has been affirmed by the interim president, interim provost, and interim CFO, underscoring its priority for the university’s long-term success.

The Division of Extended Studies has operated for some time in a decentralized-style funding system and will see few changes under the new model. Because of this, we already have positive evidence that the development of online programming will continue to be a successful venture for Boise State.

Research doctorates will be used as a performance metric for allocating a small portion of the state appropriations. This recommendation from the Tuition and Fees working group is intended to support, in part, the university’s stated goal of achieving an R1 (Research Very High Activity) Carnegie classification.

The new University Budget Model (UBM) includes all funds and all-areas (e.g., auxiliaries, central services, extended studies) and includes costs and revenues whereas BB 2.0 applied only to the academic colleges and did not include expenses.  BB2.0 allocated a fixed dollar amount, whereas UBM allocates the actual revenues. Many of the revenue allocation methodologies under BB2.0 are preserved. UBM unifies all divisions at the university under the same approach, rather than applying BB2.0 to academic units only.

The new University Budget Model ends at the college level; units within colleges will follow the model as outlined by college leadership. As the shadow year for the model launches, we will roll out resources for business managers and deans. The details of these resources will be shared soon.

One of the guiding principles of the Budget Modernization Initiative is to have a model that is supportive of the Blueprint for Success, Boise State’s strategic plan. The first goal of the strategic plan is to advance student access and success; in order to do that, the model will support continued efforts in those areas. While this budget model extends only to the college level, each college and unit at the university has their own strategic plan to further emphasize student success and will prioritize the goals of their strategic plans accordingly.

The first dashboard supporting the UBM, the Appropriated Budget Dashboard, was launched August 4. It is available on the Boise State Reporting website and is viewable for those with access to financial data. It is available under the “Budget and Finance” tab. There is also a Job Aid available for the dashboard.

Expenses are allocated either directly to academic units (and auxiliaries) or indirectly through allocations based on various cost drivers. Each academic unit will contribute a top-line strategic fund tax, and both academic units and auxiliaries will contribute to building maintenance fund.

They are determined as a share of the metric compared to the whole attributed to units and auxiliaries, with the metrics including space, student headcount, and direct expenses.

The university will establish service expectations as part of the UBM through agreements with OIT and FOM. Other central service units will be accountable for the services offered through other planning processes already in place. Revenue units will be able to advocate for improvements or expansions to services, but will not be able to “opt out” of central  services.

Service level agreements (SLAs) are the mechanism to pivot away from chargebacks to establish an understanding of the base levels of service, that is, the types of services that are considered standard given the allocation of funds to a unit. For example, a base level of service may include trash removal from offices on a certain interval, meaning that is a shared expectation shared by the unit offering the service and the units receiving the service. SLAs also include metrics to ensure services are meeting the given standards and which are especially sensitive to academic needs (i.e., they are student-focused as much as possible).

Direct expenses include the costs of operating a unit, including personnel costs (salaries and benefits), supplies, travel, contracts, and other operating expenses.

Yes, ASC is going to be replaced by charges for indirect cost drivers.

No, direct expenses for the initial model were based on FY24 actuals, and will be updated using FY25 actuals in the next year of the model.

The budgets for college-level services would be determined by college-level administrators. They are similar to central services, but would be fully paid by the college. College-level services are subject to both University-level governance and college-level oversight to prevent unnecessary duplication of services.

College of Innovation and Design has a broad scope of programs and campus wide initiatives. These include the Venture College, facilitating AI coordination on campus, facilitating partnerships on campus through  physical spaces, resources and connections, in addition to helping drive innovative academic programs, which are designed to “graduate” to other academic colleges after sustainability is achieved. Thus, the College of Innovation and Design primarily provides a service to the university. Any revenue generated through enrollment in the academic programs will serve as offsets to lower the overall indirect expense costs covered by other colleges.

Research and creative activity expense allocations exclude cost-sharing expenditures.

Revenues are allocated to academic units through one of five channels: direct revenue, net tuition revenue allocation (total tuition minus centrally-awarded scholarships), state appropriation allocation, extended studies allocation, and research and creative activity indirect cost recoveries.

University response will depend on the magnitude of any decreases in revenue. Smaller decreases may be addressed through the model, while larger or more significant decreases will be addressed as needed by university leadership.

They are allocated to the Provost or their associated central service unit as a cost offset.

Research doctorate (PhD and EdD) degree graduates are averaged over three years, and those in interdisciplinary / co-owned programs (e.g., computing) are counted once per college.

Modified SCH is calculated in two parts: by the college paying the instructor and by the majors of students taking the course. Students with majors in more than one academic unit or in co-owned programs are counted in each college. Modified SCH is used to determine the proportion of a college’s allocated revenue.

Revenue allocated based on SCH will be handled differently for graduate and undergraduate programs. Revenue for graduate activity is based on SCH and will be allocated entirely based on instructor SCH. Revenue for Undergraduate activity will be split, with 75% based on modified SCH (with 75% determined by instructor SCH and 25% by student major SCH) and 25% based on bachelor’s degree graduates.

Because of the nature of graduate programs, most if not all of the SCH offered will come from the unit that houses the program. 

It is calculated using the number undergraduate bachelor’s degree graduates, excluding fully online programs and self support (Same metric used in BB 2.0).

A portion of SCH (25%) is also based on a student’s home unit (college of their major) to provide additional funds for student support & services.

As student fees are generally assessed for specific programs (for example, the advising fee or the library services fee), they will still be distributed directly to that unit. They will offset the cost of those central services for revenue-generating units.

Line-item state appropriations will go directly to the designated unit. Within the budget model, they will be used as cost offsets for central services. In other words, when the state provides appropriated funds for a particular cause, those funds will reduce the overall calculated cost for that cause that is paid by revenue-generating units.

Included in allocated revenues are: tuition, state appropriations, extended studies revenues, research and creative activity, fees from grants and contracts, and other sources of revenue.

Net tuition is allocated which is gross tuition less centrally offered scholarships and waivers. Individual units are only charged for scholarships they offer directly.

Extended Studies revenues are separate from the traditional tuition revenue allocations and based directly on annual year costs and revenues. The strategic investment fund can also support new entrepreneurial growth.

It includes all of the revenue from enrollments, fees and other funds associated with Extended Studies programming. Extended Studies already operates an RCM type of budget model which will continue in the new model

Non-operating revenue includes funds transfers like F&A allocations, gifts, and bond payments.

Partnership is encouraged through counting majors and degree grads in each unit for double majors and co-owned programs. Units can also partner through use of the strategic investment funded programs and by working together to increase support for needed central services // This will also be impacted by decisions around the governance structure developed in the shadow year.

Units generating a surplus will contribute to subsidization based on their proportional surplus.

The university will continue to use the approach established under Bronco Budget 2.0 for offering two or more colleges credit for interdisciplinary programs although the specific methods of allocation will be updated under the UBM. Colleges will receive “credit” for interdisciplinary efforts when revenue is split based on the metrics used for allocation: at the undergraduate level, these metrics are SCH, majors, and degree graduates and at the graduate level these are SCH and research doctorate completions. Governance to facilitate interdisciplinary programs will be further developed.

Most of the allocation proxies are based on a three-year rolling average, but the total revenue and direct costs are based on a single year (FY24 for the shadow year)

The model should not greatly impact these programs/centers which typically have reserves that have surpluses, these funds are already spoken for and part of existing carryforwards

The shadow year began on July 1, 2025, for FY26. Full implementation is planned for July 1, 2026, for FY27.

Specifics of operationalization are being worked on during the shadow year. More and new reports will need to be created to transition this into a forward looking budget model. The university has already begun rolling out dashboards and tools for those with access to financial data.

Most chargebacks will be eliminated. There may be specific exceptions to this, which will be identified during the shadow year.