Budgeting basics

With total revenues of more than $900 million, the University of Manitoba is the largest post-secondary educational institution in the province.

Annual budget development process

Approximately two-thirds of the university's total revenue is recorded in the university’s general fund, which funds its academic, administrative, operational and ancillary costs. The remainder of the revenue is recorded in the restricted funds, which support the capital expenses, research and other special activities, and staff benefits and trust funds.

The annual budget development process occurs over several months. Priorities are identified and shared, institutional data is used to inform tuition revenue projections, and preliminary planning parameters establish a starting point. Academic and administrative units prepare detailed operational plans and budgets for review by various individuals and committees.

Financial Services collaborates and consults with relevant stakeholders to prepare a university-wide restricted funds budget.

The Financial Planning Office plays a central role coordinating and overseeing the overall development and consolidation of the annual operating and restricted funds budgets.

Consolidated budget

The university consolidated budget is approved by the Board of Governors each year. Below are the Board of Governors submissions and additional documents which support budget and planning transparency, accountability and communication to the members of the university community.

These resources have been developed to ensure the university community has access to the organization’s financial and planning information, including linkages to related and relevant information that assist in our decision-making.

The university budget serves two purposes:

  • It is an estimate of income and expenditures that the university will incur over a fiscal year.
  • It is a resource allocation tool, in that the university budget model allocates resources to units based on a formula.

The budget represents the culmination of many months of planning and the decisions of academic, ancillary and central units. Through the annual budget development process, planning assumptions related to revenue and expenditures are developed and informed by relevant economic factors, risk assessments, university and provincial policies, collective bargaining agreements and, but not limited to, provincial direction. 

The budget submissions for each year has a corresponding budget framework until the 2018-19 fiscal year. For example: The 2018-19 budget submissions correspond with the 2018-19 budget framework. 

Please note there is no budget framework or supplementary information for the 2020-21 or 2021-22 fiscal years.

Resource allocation

Resource allocation is among our most important annual initiatives. This process allows us to operationalize our strategic priorities and ensure we are appropriately supporting student success, research and scholarly work, and our academic mandate overall.

The Financial Planning Office's role

The Financial Planning Office supports the resource allocation process, which is led by the Provost and Vice-President (Academic). Some of our main responsibilities include:

  • Participation in the development of the annual request to academic and administrative units for the submission of unit priorities and plans.
  • Review of all unit planning submissions for reasonableness to inform and guide institutional budget development and resource allocation decisions.
  • Participation in the development of long- and short-term fiscal strategy and planning options to achieve the university’s strategic objectives.
  • Development of materials in support of the budget development process to assist with decision-making to ensure appropriate resource allocation.
  • Participation in the alignment of the university’s resources with academic priorities and key strategic initiatives through analytical review of operational strategy, performance results and resource allocation strategy.
  • Preparation of budget, financial and other reports for distribution to various groups such as the Budget Advisory Committee (BAC) and Executive Budget Committee.

Budget model

Guiding principles

These guiding principles anchor UM’s budget model:

  • Align resource management, planning, and allocation with the university’s mission and strategic priorities.
  • Enhance collaboration between and within academic and central support units.
  • Incent creativity, innovation and the pursuit of revenue opportunities to position the university for a strong, sustainable future.
  • Promote fiscal understanding, responsibility and accountability throughout the university.
  • Be straightforward and transparent.

Budget model description

The Budget Model Redesign project culminated in the university moving from an incremental base budget model to a more decentralized hybrid model, first applied to the 2018-19 budget.

The current model incorporates three primary components:

  • Academic and ancillary units
    faculties, schools and ancillary units, to which revenues are directly allocated in support of teaching, research and service activities.
  • Central support units
    units such as Student Services, Research Services, UM Libraries, Information Services and Technology (IST) and Financial Services. These units’ costs are allocated to academic and ancillary units based on a defined set of cost allocation variables.
  • University fund
    This is created through a common fee (or tax) on select revenues. It is used to support the university’s strategic priorities and operations.

More about the budget model

Driver-based allocation is a key concept of the budget model. The allocation rules help portray our internal economy here at the university and, particularly with the revenue allocations, help direct or incent behaviour.

Revenue allocations

Revenue that is planned centrally is allocated to academic units based on one or more variables referred to as drivers or directly to the unit generating the revenue. That revenue is currently limited to the operating grant and most tuition.

Because revenue is planned centrally, academic units are responsible for managing within their approved budget. Fluctuations in actual tuition and operating grant revenue against plan are monitored and managed centrally.

Units are also responsible for budgeting some revenues directly themselves. This includes course-related fees and all of the income-funded activity and various grants and revenues from industry partners and from federal and provincial governments.

Central cost allocation

Central cost allocation is another fundamental component of the model. Allocating costs to the academic units is intended to enhance transparency around costs incurred to operate the university.

Central unit net costs are allocated to academic units using a set of allocation variables. For the purpose of allocating costs to the academic units, central support units are grouped into nine cost pools. These nine cost pools do not represent a reorganization of reporting relationships, but rather a grouping of “like” units for the purpose of allocating each cost pool’s net costs via a single allocation variable.

Each academic unit receives cost allocations based on its proportion of the driver assigned to each cost pool. Drivers do not always have a direct link to the types of expenses or services offered by the support units in each pool. The model is not intended to perfectly allocate expenses. The number of costs pools, the support units included in each and their associated drivers were determined by the UM Steering Committee in consultation with deans and directors to arrive at a model that met the guiding principles.

The University Fund

The final main element of the budget model is the University Fund. Designed to address university strategic priorities and operations, it is funded by a 17.75 per cent participation rate on tuition (undergraduate, graduate and distance), differential fees, and provincial operating grants revenue. Additional contributions come from investment income and revenues earned from the International College of Manitoba and Ancillary Services. The funds are used to invest in strategic priorities, including mission-critical subvention.

Budget model redesign

As approved by Senate and the Board of Governors, the University of Manitoba’s 2015 to 2020 strategic plan, Taking Our Place, identified one of our key institutional priorities as “Building a community that creates an outstanding learning and working environment.” One of the supporting actions of this priority is to form better linkages between planning and resource allocation in support of the university’s academic mission and priorities.

Since 2013, UM had been reviewing options for a budget redesign process, and in fall 2015, a number of key stakeholders were convened for a series of conversations on the topic. A comprehensive and consultative process to review and redesign our current budget model followed. The Budget Model Redesign Steering Committee, chaired by the then Provost and Vice-President (Academic), Janice Ristock, oversaw a comprehensive process to explore various budget models.

The committee was charged with examining UM's current approach to resource allocation and developing a set of recommendations for a new resource management, allocation and planning process. That included the design and implementation of a new technology-based budget and planning solution to streamline and improve the financial planning and management of resources.

Allocation calculations

Find a brief description of how the revenues and costs for the UM budget are pooled and what drives the allocation of those pools to the academic units.

Revenue allocation

Provincial operating grant

Base operating
  • 65 per cent unweighted tuition results
  • 30 per cent sponsored research expenses (three-year average)
  • Five per cent adjusted faculty and graduate student FTE
Access
  • 100 per cent direct to unit
Targeted
  • 100 per cent direct to unit

Undergraduate tuition fee revenue

Program-based fees
  • 100 per cent direct to unit
Credit-hour-based fees
  • 85 per cent faculty of instruction
  • 15 per cent faculty of student record

Graduate tuition fee revenue

Program and credit hour fees
  • Direct to academic units
Non-academic unit fees
  • Percentage of direct allocation
Continuing fees
  • Graduate student headcount

Distance tuition and other student revenue

Distance tuition
  • Distance credit hours
University-wide fees
  • Total student head count
Other miscellaneous fees
  • 100 per cent direct to unit

Cost allocation

Cost pool or allocation

Driver

Academic Credit hours by student major (taught to) – total
President, External, Indigenous Faculty and staff full-time equivalent (FTE)
Information technology

Faculty, staff, and student (Fall Term) head count

Administration Total direct expenses (including restricted) - clinical expenses removed
Facilities Net square footage occupancy - all units
Research Sponsored research expense (three-year average)
Student services Credit hours by instructor (taught by) - total

Annual budget cycle

The university's annual budget development process includes the following steps and groups with primary accountability and responsibility for their completion.

Collect data and develop assumptions

Purpose: Forecast and allocate university revenues in the model and collect variable data.

Participants: Financial Planning Office, Office of Institutional Analysis and the budget management committees.

Timing: May to June.

Develop central support unit budgets

Purpose: Review central support unit budgets and allocate costs.

Participants: Central support units, Financial Planning Office and the budget management committees.

Timing: June to October.

Develop budget requests

Purpose: Collect funding requests from academic and ancillary units.

Participants: Deans and ancillary units.

Timing: June to December.

Finalize funding decisions

Purpose: Review funding requests and set university budget.

Participants: Financial Planning Office, executive leadership and the budget management committees.

Timing: December to May.

Monitor throughout fiscal year

Purpose: Update the forecast based on current data and emerging information.

Participants: All units are involved, as well as Financial Services and executive leadership.

Timing: April to March.

Roles in the budget process

Financial Planning Office and Financial Services

Develop institutional fiscal projections, including estimates required by the provincial government.

Coordinate budget process, including support for the budget model.

Monitor and report actuals and forecast to the UM Board of Governors and provincial government.

Office of Institutional Analysis

Generate enrolment projections.

Create budget model driver data.

Produce other data (student, faculty, tuition) in support of budgeting.

Office of the Provost

Guide planning and coordination of academic programs, enrolment, academic hiring and other processes and initiatives that inform and support budget planning.

Central unit leadership

Develop proposed budgets based on budget planning parameters and other budget development guidelines.

Present to Central Unit Allocation Committee.

Monitor and manage within approved budgets.

Deans and directors

Develop faculty or school plans and priorities in context of institution-wide priorities and plans.

Determine faculty or school operational requirements.

Direct unit budget development.

Manage approved unit budget, including resource allocation within the faculty.

Business managers

Analyze unit budgetary requirements in relation to budget guidelines and unit plans and priorities.

Develop unit budget requests within UM Plan.

Support unit leaders in budget planning, resource allocation within the faculty or unit, and in-year financial monitoring.

Contact us

Financial Planning Office
105 Administration Building
University of Manitoba
Winnipeg, MB R3T 5V6 Canada

204-474-9232