|
|
|
|
Funds committee addresses financial strategy
|
MUSC is undergoing a critical review of its financial strategy during a
period of unprecedented decline in its level of state funding and
an increasingly competitive education and health care
environment.
That is why a new MUSC Funds Flow Steering Committee is analyzing how
MUSC’s budget model compares to that of similar institutions nationwide
in order to develop a long-term strategy that addresses needs as MUSC
faces state budget cuts and other revenue challenges. The committee
will present its recommendations to the deans’ and president’s councils
by December.
The process began in January when John Raymond, M.D., former vice
president for academic affairs and provost, and Lisa Montgomery, vice
president for finance and administration, appointed the MUSC Funds Flow
Steering Committee. The committee was charged to review the overall
financial philosophy and study resource and expenditure allocation
models that would best meet the challenges that MUSC faces.
“We are in the information gathering and evaluative phase of the
process,” said Mark S. Sothmann, Ph.D., dean of the College of Health
Professions and committee chair. “We are conducting due diligence in
what strategic changes might be recommended given the budget issues
confronting MUSC.”
 John R. Curry
(center), managing director of Huron Consulting Group, meets with
MUSC Funds Flow Steering Committee. Joining Huron in 1995, Curry has
led many projects, involving such specialities as incentive-based
budgeting, rationalization of complex information technology
organizations and library systems, cost reductions through benchmark
analysis and shared services.
The committee has 19 members drawn from the MUSC faculty senate, office
of the president, University Medical Associates, MUSC colleges and MUSC
hospital.
The area of focus for the committee is broad-based and includes such
issues as:
- Matching revenue and expenditures for effective
decision making
- MUSC state appropriation distribution
- Funding key university services operations
- Funding of ongoing universitywide strategic
initiatives
- Previous MUSC funds flow reports
An earlier Educational Funds Flow Task Force concluded in May 2009 that
it was time for MUSC to re-examine its budget model. The report pointed
out that MUSC’s budget has evolved through decades, and there is a need
for a comprehensive analysis to better position the university for more
effective budgetary decision-making in the 21st century.
Sothmann said the increasing complexity of MUSC and the volatility of
its environment accent the need to anchor the university’s budgetary
model to principles and practices that will better position MUSC to
thrive in the future. “There are dozens of universities across the
country who are in this same type of budgetary review because of the
difficult funding environment.”
Input is coming from committee members who were chosen to ensure a wide
diversity of representation of all the key constituent groups at MUSC,
he said. A national expert in university budgeting modeling also
recently visited MUSC to speak with unit leaders to get a 360-degree
view of budget needs institutionwide. There will be subsequent
articles in The Catalyst and an open forum scheduled as the process
moves forward so employees will remain informed.
Sothmann said it’s a complex process. For example, the distribution of
income from a variety of sources is being examined to determine if
better incentives to grow revenue can be built into the system.
“If you flip the lever on one side, what’s the downstream impact
somewhere else? That’s the complexity of this. We all recognize we want
to make some adjustments to provide incentives, but the campus is
highly complex in how key revenue streams support critical operations
and programs. So if you flip that switch and don’t have some
plans on what to do or the implications of it, you’re just going to
create more issues. It’s a very detailed and complex issue that needs
to be addressed from a global perspective and then drilled down in very
specific ways.”
Another area that’s being addressed is how state budget cuts have
impacted critical service units. Historically, certain service units
have depended largely on state appropriation dollars for their source
of revenue. When 55 percent of the state appropriation dollars is cut
without examining the structure of funding for those service units, it
has an unintended—and sometimes disproportionate—impact on these
essential programs, he said.
“We have situations where the historic revenue streams don’t
necessarily provide for the continued operations of critical services
that are valued,” said Sothmann. “We have to grow revenue on one hand,
and we have to figure out the most efficient ways to support those
service units that bring critical value to the institution.”
Sothmann said he’s committed to the committee’s work because it will
give MUSC the best information about what its true costs are and the
revenue streams relative to those costs.
“This is a transformation quite honestly in the sense of trying to
position MUSC for the next decade or two in what will continue to be a
highly volatile and highly competitive environment for what we do, and
it will position us to make better informed decisions relative to how
we address that environment.”
Friday, Aug. 13,
2010
|
|
|
