The Daily Gamecock

USC exerts more control over college funding

State budget cuts force overhaul

In response to state budget cuts, USC has changed the way it funds its colleges and is placing more authority for money allocation in the hands of the provost.

From 2004 to 2010, USC’s colleges operated on a model in which their enrollment numbers and the amount their students paid in tuition determined how much money they received. After paying an overhead fee that funded shared services — such as electricity, maintenance, Student Affairsand libraries — the colleges would retain the rest of their tuition dollars and build their budgets around them.

This system, dubbed value-centered management, encouraged colleges to be entrepreneurial in seeking to expand their programs and enrollment because more students meant more money. But the size of incoming freshmen classes has been capped for at least the next three years because officials say the university has no more room to grow.  

“Encouraging [colleges] to get more students would basically mean a more fierce competition among colleges, and we want more cooperation,” Provost Michael Amiridis said. “It would be the same piece of the pie.”

In addition, officials say the state funding cuts have adversely affected certain colleges. They say these factors have broken the independent tuition funding formula, requiring the administration to take the reins in the budgeting process.

“What we found in the recession, in two and a half years time, we lost $100 million in taxpayer appropriations to the university,” said chief financial officer Ed Walton. “As we started allocating those cuts it was very, very clear that with cuts in the same proportion to the way organizations were receiving resources would wind up with organizations simply not being able to float.”

Smaller colleges in which practicality and accreditation requirements limit the student-faculty ratio, such as the Colleges of Nursing and School of Music, are more reliant on state funds because they lack high enough enrollment to sustain their costs.

“It is much more expensive to educate a music student because the classes are much smaller — because the classes are one-on-one — than it is to educate an English major,” Amiridis said. “The field was leveled by the state appropriations. The effect that these cuts have on music are significantly higher than the cuts on arts and sciences.”

Some areas, such as the Department of Political Science, are considered “cash cows” that can teach many students in large lecture classes and have less need for expensive technology. Tuition money that would have, in the past model, gone to these areas may now be used to subsidize struggling programs.

In addition, USC officials say they require more control over the money allocation process to pay for hundreds of millions in building repairs and, in particular, the hiring of 200 faculty members in the next four or five years. Due to increasing freshmen class sizes, USC has reached a historically high student-to-faculty ratio of 19 to 1.

“We’re fully aware that we’ve pushed the teaching space to its limits,” Walton said.

Amiridis said more central budget authority was also needed to attract deans to the university by funding their specific requests. New deans for the law school, School of Education and College of Social Work were selected this year.

College administrators interviewed were unsure of the effect the change in the funding process would have on their departments. The budgeting process for next year won’t begin until spring.

Sonya Brown, assistant dean for academic planning for the College of Arts and Sciences, by far the university’s largest college, declined to comment. Beverly Simmons, administrative and fiscal manager for the relatively small College of Social Work, said she thought the funding change was beneficial.

“I think what the university did to centralize the budget, considering the economic situation that every college is dealing with, it was the only decision it could have made,” Simmons said. “They probably had no choice.”

Amiridis said it would be detrimental to the university as a whole if larger colleges were to become angry that their tuition funds were subsidizing smaller ones.

“To everybody’s credit, I’ve never heard an argument like this,” Amiridis said.

Though USC has scrapped the old model, Amiridis said the college funding process is still evolving. By 2014, he expects to see a hybrid model that would preserve the advantages of value-centered management while addressing the shortfalls. As of now, colleges’ funding has been capped at 2010 levels and deans are forming budgets accordingly. They are also submitting competing proposal for access to central funds for new faculty hires and other needs.