PROPOSAL SAMPLE #3
Changing a University and School's Financial Structure to Achieve Its Core Missions
TRACK: 1 SESSION_ABSTRACT Major strategic goals for Northwestern University are the expansion of its research programs and for the Medical School to move into the top rank. Declining clinical revenue streams nationwide and an inflexible University financial structure that did not support the required revenue growth provided serious barriers to the Medical School's ability to respond. In this session the goals, process and results of defining a new financial incentive structure for the School to achieve its strategic goal, including the intended and unintended impacts at the University and School levels, will be described. The interplay between the new financial structure and the School's core mission will also be addressed. RELEVANCE This topic has great applicability to the conference theme of Mission and Change, in that external factors such as clinical revenue streams and internal factors such as traditional University-side budget allocation rules were having a negative impact on the Medical School's ability to achieve its mission. In this case, changing the financial management structure of the Medical School to enhance the School's ability to achieve its strategic goal of advancing into one of the top ranks of U.S. medical schools was selected by the University as the best means of helping the School to achieve its mission. This topic addresses the University's internal mission (Track 1), in that the University was willing to change its funding model to prioritize important University and School needs and to provide the Medical School with the incentive to compete for new research opportunities. IMPORTANCE The leadership and direction of a major research university often requires major changes to the management structure to achieve strategic goals established in the planning process. In this case, the institution's financial management structure for a professional school was changed to establish a better link between the Medical School strategic goals and financial incentives. OUTCOMES The financial management structure for the Medical School was changed effective in Fiscal Year 2001. The financial management structure within the School has been greatly altered so that financial incentives are much more prominent in the allocation of resources within the School. Given the recent implementation, it is too early to assess the full extent to which the expected results are being realized, though there are early signs that the change is having the expected impact. AUDIENCE The primary audience is chief financial and academic officers, planners and budget analysts/managers from major research universities who wish to consider new funding models to enable their schools and colleges to achieve their strategic goals or to achieve new and emerging missions. SESSION_OUTLINE The primary objective for the change was establishing a better linkage between institutional and school strategic goals with real and identifiable financial incentives. I) Brief background on the Northwestern University environment including a description of the salient features of the overall financial management structure. This will include some specific information about the Medical School such as size, organizational structure of the academic medical center, areas of strength, and financial support.
II) Brief description of the University and Medical School's strategic plan with the identification of key strategic goals and objectives and how a change in financial structure grew out of this planning.
III) Review and discussion of process used for the decision to establish a new financial structure for the Medical School. This element of the presentation will include: A) Pros and cons for a de-centralized financial management structure; B) Impact such a structure would have on the University; C) Finding an existing financial management structure that has been tested over a number of years. D) Building a detailed financial management structure that would not disadvantage either the University or the Medical School in the short-run. IV) Review and discussion of the model selected within the Medical School for the distribution of funds to units. This section will focus on: A) Goals and principles of the new financial paradigm. B) The structure of the model, including funds flows to and between units and central administrative units. C) The transition model to ease impact on units who are "net losers" under the new financial model. V) Discuss the early implementation phase of the change. This included the building of a fund and account structure that yields appropriate financial information for the School and departmental budget managers. A complicating factor in the new fund and account structure is that it is unique to the Medical School. Initially, it is not being applied to any other schools within the University. VI) Identify and discuss the cultural changes that have occurred from the Central Administration and the School viewpoints. This change is highly significant for the University, in that it has always operated with a highly centralized financial management structure for all of its schools, except for the Kellogg School of Graduate Management, which operates on a modified "tub on its own bottom." Similarly, this is a significant cultural change for the faculty and staff of the medical school, who have never had to worry about the cost of space or the amount of grant funding received before the new financial model was adopted. Responses from administrative and academic support areas outside of the School will also be reviewed and discussed. VII) Outcomes from the change to date. Both positive and negative outcomes will be identified and discussed. VIII) Review and discuss what we learned from this major change. SESSION_OUTLINE The presenters will use a power point presentation to cover the topic. A copy of the presentation will be available at the session. Both presenters will participate in the presentation. The formal part of the presentation will be 40 minutes in length with a 20 minute question and answer period for the audience. PROF_EXPERTISE_PRIMARY Jim Elsass is the Associate Vice President for Budget Planning for the University and has been involved in the identification, selection, adaptation of the de-centralized financial management structure to Northwestern University and the Medical School. In addition, he has been involved in the implementation of the new structure from step one. Jim has been Budget Director at Northwestern University for more than 15 years with a comparable professional experience at the University of Illinois at Chicago for six years. Prior to working on these two campuses, he was an associate director for finance at the Illinois Board of Higher Education for eight years. PROF_EXPERTISE_2 Heather Haberaecker is the Associate Dean and Chief Financial Officer of the Medical School and has been involved in the implementation of the new financial model since her arrival almost two years ago. Prior to that, she has worked in higher education finance and administration for over twenty-five years, serving as Budget Director and Assistant Vice President for Budget and Finance at Northeastern Illinois University and Vice President for Finance and Administration at Clarion University of Pennsylvania, both regional comprehensive universities. Prior to working on these two campuses, she was an assistant director for fiscal affairs at the Illinois Board of Higher Education and worked in the office of academic planning and analysis at the University of Michigan while pursuing a doctoral degree.