Glossary of Terms & FAQs

Glossary of Terms

Academic Quality Indicators: A group of indicators used to ensure academic departments maintain quality consistent with the mission of the unit. The indicators include:

  • Maintenance of Appropriate Mix of Full-time Faculty
  • Maintenance of Research and Creative Activity Production
  • Minimal Course Duplication and Credit Hoarding
  • Increasing Student Success and Learning
  • Controlling Grade Inflation
  • Controlling Time to Graduation
  • Maintaining Program Accreditation
  • Maintaining Support for Honors Programs
  • Maintaining Support for Interdisciplinary Programs

Administrative and Support Units: Units that provide support to revenue generating units. The units typically have limited revenue opportunities. Included in administrative and support units are academic support units, administrative support units, research administration, information technology, libraries and physical plant and regular maintenance.

Allocated Expenses: Expenses associated with administrative and support units that are allocated to the colleges and schools and other revenue generating units in order to cover the cost of the service provided.

Assessment: A charge allocated to a responsibility center which is required to cover the cost of the public good or service of a support unit based upon the direct expenditures of that center.

Auxiliary Units: Units which are generally self-supporting. (The revenues should cover all expenses.) Units are assessed a portion of the cost of the administrative and support units. Examples include but not be limited to: Intercollegiate Athletics, Rental Properties, Food Services and Parking.

Bad Debt Expense: Past due student accounts where the University writes off the expense after all efforts for collection have been exhausted.

Cost Allocation: Process by which net expenditures for administrative and support units are allocated to revenue generating units based on agreed allocation metrics also known as cost drivers.

Cost Drivers: Factors that directly impact the cost of services. Examples would be student headcount, space metrics, number of students, and number of faculty and staff.

Cost Pools: Pools are the logical grouping of the cost of an administrative and support unit. Cost pools are allocated to each of the responsibility units and the administrative and support units. Different formulas may be used in the allocation of the pools.

Departmental Research: Research activity of faculty funded by the university, college or school to maintain professional effectiveness.

Direct Expenses: Expenses incurred directly by a unit. Includes expenditures for salaries, benefits and general operating expenses. The expenses are under the control of the unit.

Direct Revenue: Revenue from course and program fees that are credited directly to a F&A. F&A are expenses incurred by the university in support of sponsored projects. Due to federal regulations, the expenses cannot be charged directly to a specific grant, contract or other sponsored agreement.

FTE (full-time equivalent): Counts used for faculty, staff and students. A full-time position equals 1 FTE. A part-time position equals TBD FTE.

Hold Harmless: Colleges and schools will not be penalized for performance during a hold harmless period.

IDCR (Indirect Cost Recovery): Cost including academic and administrative support and facilities.

Responsibility Unit: A school, college or auxiliary operation that brings in revenue.

Restricted Funds: Revenue received that can only be used for a specific purpose. Examples would include research grant, scholarship funds and some gifts.

Revenue Generating Unit: Units that can influence revenue production through credit hour production, funded research production or other means. The units may also be called responsibility units.

State Appropriations: Funds allocated by the state legislature to the university.

Strategic Investment Pools: Pools of financial resources under the control of the President and/or Provost. The funds are used to invest in strategic priorities.

University-Based Financial Aid: Financial aid awarded to students and/or colleges or schools that is managed at the university level and supported as a common good through the allocations of costs to the responsibility units.

Unrestricted Funds: Revenue from state appropriations, tuition and fees, investments and student fees that can be used by a responsibility unit for any allowable expense including salaries, general operating expenses and scholarships.

FAQs

What effect will SRI have on research centers?

At the University of Memphis, interdisciplinary research centers will be treated like a college or school in order to understand the level of investment made in the unit or they will be treated as an allocated cost as part of the provost or research office. A final decision has not been made. Research centers that fall completely within a college or school will be part of that units responsibility.

Will SRI encourage the development of new academic programs?

SRI has a greater potential to encourage and support the development of new academic programs. Unlike the incremental budgeting system, where resources were slow to be moved to programs with enrollment growth, the SRI model provides incentives for entrepreneurial activities. Improved student retention may be a by-product which will in turn provide additional resources for the unit.

What affect will SRI have on interdisciplinary efforts?

SRI does not inhibit interdisciplinary efforts. Barriers that exist in the current budget model may continue to exist in the SRI model. Under the SRI model, there is potential to enhance interdisciplinary programs depending upon the model negotiated by the players involved.

Will SRI be applied at the department level?

In the first year of implementation, it will only be applied at the college level. After the first year, it will be the decision of the dean as to whether or not they wish to devolve the allocations to the department level.

Can a unit opt out of the SRI budget model?

No. The University must use one enterprise budget model.

What happens when a unit has a positive or negative balance at the end of the fiscal year?

There is no requirement that a unit break even.The model reveals the reality that has always existed. The continuation of the investments that exist will depend upon the University's willingness to continue the level of investment. Adjustments may be made to increase or decrease investment.

How are central services incentivized?

A committee will be established that will determine the budgets of the central services units.                                                           

What is the effect on deferred maintenance?

There is not a definitive answer however it is anticipated that there will be more conversation about deferred maintenance since the responsibility units will now pay for the space they occupy.

What is the role of faculty play in SRI or how is shared governance affected by SRI?

TBD

Will SRI create duplication of course in different colleges as they compete for the same students?

TBD

How will the parallel process work?

TBD

What are service level agreements?

Service level agreements are agreements made between administrative and support units and responsibility units that detail the level of service expected for the costs allocated.

Can a college or school "opt out" of allocated costs for support?

An "opt out" option would not be allowed for most support services.

How will the need for increased data be addressed?

The University is purchasing a visual analytics software package and teams will be established to develop reports needed in the new model.

How will space be treated under SRI?

Responsibility units and auxiliary units will pay for the space they occupy. Rates will vary by the type of space utilized.

Where can I find information about how my unit is doing in the budget model?

TBD