New budget model at Science

In light of SDU's new budget model, during spring of 2016 the faculty's management group prepared a proposal for a new budget model for the Faculty, and prior to the summer holiday this model was subject to consultation among various councils, boards and committees at the Faculty. Following a review of the consultation responses, the model has been amended and approved by the management group.

– It has been of concern to both the management group and me that we together prepared a model which ensures the most predictable and stable financial framework in the coming years. As the previous budget model in many ways no longer matched SDU's new model, the management decided that a new model should be brought to the table. There were also a number of inexpediencies in the previous model, including the so-called VIP taximeter, which unfortunately varied from year to year and created uncertainty in the departments' finances. In addition, the VIP taximeter was not incentive-driven, which did not create the necessary connection between strategic initiatives and finances, explains Dean Martin Zachariasen.

Incentive-driven model

From now on, the education grant will be distributed via the departments receiving a fixed percentage of the total education taximeter income which they generate.

This makes income predictable, incentive-driven and more stable than it is in the current budget model. In addition, a larger percentage will better finance the actual teaching expenses at the departments.

At the same time, there are four new education incentives, which are transferred directly from SDU's new model:

1. International students on exchange at SDU: A special rate per Student FTE of DKK 15,000.
2. SDU students on international exchange: A special rate per Student FTE of DKK 75,000.
3. International self-funded student: A special rate per Student FTE of DKK 40,000.
4. Research-based part-time education: A special rate per annual student of DKK 23,000.

The new incentive-driven education income will be sent directly, without taxation, to the departments who have earned them.

Martin Zachariasen thinks that the new incentives will give the Faculty new possibilities, especially for increased Student FTE earnings:

– We are convinced that with the new model we have established some guidelines for finances which better support the Faculty's strategic direction and which, via incentives, provide further motivation, for instance for working towards an increased education taximeter income. At the Faculty of Science, we are already very good at bringing home external funding, while on the education side we can become much better at making sure that students do not drop out, just as there will be an increased incentive for reducing completion time, as it can increase our education taximeter income. I would like to see all of us helping each other in the coming years, for the benefit of both the students and the Faculty.

External funding determines the research grant

The incentive structure recurs in the distribution of the research grant, which is distributed in the following way:

1. BFI income is sent directly without taxation to the departments who have earned it. This applies to a small percentage of the research grant.
2. A part of the research grant is distributed based on the department's external income, so that the department receives ordinary income equivalent to a fixed percentage of the external income, including overheads.
   

   Year	2017	2018	2019	2020
   Percentage of external income	12 %	13  %	14  %	15  %

3. The other part of the research grant is a research coverage of teaching that supports research anchoring of the department's study programmes. In the coming four years, distribution will be as follows:
   

   Department	IMADA	FKF	BI	BMB
   Research coverage of teaching (million DKK)	3.5	5.0	3.5	5.0

4. Offset grant in relation to the Faculty's old budget model. Will be phased out by 2020.

– When a budget model like this is created, there will of course be objections to the chosen direction. Questions could be asked, such as: Are the incentives right? Will individual units lose sight of the community and prioritise their own interests instead? Will there be focus only on what can be of financial benefit? These are all concerns that we are very conscious of in the management group, and which we take seriously. However, I am sure that the structure and team spirit which we already have at the Faculty of Science doesn't need to change because of a new budget model, concludes Martin Zachariasen.

The new budget model will be used for the first time in calculation of the budget for 2017-2020. As an offset grant has been introduced, which is to be gradually phased out as of 2017 and completely by 2020, it will not directly have significant consequences for the finances of the departments. In the coming months, the model will be reviewed at department meetings and in relevant councils, boards and committees.

Top illustration: Colourbox