Development of Budget Priorities - Essay Example

Development of Budget Priorities Name Course Lecturer Date Executive Summary Dubai Star University is going to be the newest New Federal Organization that will offer higher education in the United Arabs Emirates. The institution will be organized into a number of schools. Under these schools, there will be departments. For administrative purposes, schools offering related courses or programs will be managed under a campus. There will be, for example a campus in charge of the schools for Art and Design and for Architecture. There will be another campus for schools of Arts and the school of Business Administration and lastly a campus for the school of math, sciences and engineering. These campuses are found in Abu Dhabi and Dubai. The federal organization educates up to 10000 female and male students from twenty countries. In order to ensure that the education offered is effective, the institution employs Program Review, Accreditation, as well as Assessment of Student Learning, Capacity building initiatives, Innovation in , Student completion of courses, Compensation, Mission-based performance, and Goal achievement as a tripartite approach. It gives priority to the success of each of these areas. The institution invests heavily in programs that promote integration among the various campuses, the exposure of students to the practical world, and participation of the institution in community projects. Such programs include intercampus sports, environmental conservation programs, conferences and forums, which invite interested students from all campuses. Fortunately, the campuses are not located far away from each other. Academically, each campus operates independent from other campuses. Therefore, students’ tuition fees are paid at the campus level. The institution places more emphasis on science, technology, engineering and math, a program known as STEM. Therefore, it always prioritizes this STEM program in terms of Resource allocation. In terms of budgetary allocation, the institution needs to focus more on the priority areas, being a developing educational leader. This paper therefore, explains the budget process necessary for this institution. It also draws a budget plan in the end for the organization. Introduction This budget will involve different allocation techniques. Among these techniques are zero-based budgeting; planning, programming, and budgeting system, incremental budgeting, cost centre budgeting, formula budgeting and performance based budgeting. Under incremental budgeting, it will be clear that there are those additions to the current budget level. These additions are called secondary or incremental adjustments, thus the name incremental budgeting. The budget of the previous year for an educational division or department in UAE, for instance, may be carried forward. Reaching the next annual budget, this incremental budget will be adjusted and scheduled in such a way that it finances known factors like salary inflation, anticipated price, service developments, additional resources, and new legislative requirements. Because it is retrospective, it is easy to understand and very simple to operate this incremental budget. This budget also makes it possible for managers to operate their offices and departments consistently. Through this incremental budget, policy makers can concentrate on the important areas of change, leading to energy and time conservation (Shah, 2007). This budget will also help in the avoidance of conflicts between or among departments. This is because departments receive similar treatment. In this case, however, priorities will not be given to incremental budgeting. This is because future operations come with new financial demands. Therefore, instead of this incremental budget being directed to the particular department, prioritization should be done so that the money carried forward are directed to high priority departments. This will enable the unnecessary financing of unproductive programs. It will also bring new incentives for building and developing new ideas (Banerjee, 2005). Budget Priorities While the allocation of budget may be based mainly on the needs of the university, budget priorities should also be seen in term of the severity of a crisis. In such a case, if a particular department needs budgetary allocation seriously, the university can opt to the act of increasing its revenues to finance the pressing needs and maintain current activities and programs. The second option to do is to reduce expenditures. This can be done by reallocation of funds, retrenchment and expenditure savings. Prioritization will also involve doing away with operational responses having limited effect on instructional programs and that are temporary. Example of this is the reduction in travel, building maintenance, vacant staff positions, among others. in addition, prioritization will also involve doing away with academic program responses having little effect on faculty. Example of this is the reduction in equipment funds, travel to professional meetings and vacant faculty positions (Hildreth & Khan, 2002). In relation to the issue of budget priorities, the following activities that need to be financed were identified. These are investment in participation, innovation and completion. The budgetary allocation in this case will be use mainly to compensate those involved in these processes. Under this budgetary allocation, some funds will go for compensation. Compensation is essential for retaining and recruiting well-qualified staff and faculty. Other funds will be for funding mission-based performance. This involves supporting strategic plan to boost completions and participation. Apart from funding mission-based performance, other funds under completion and innovation and performance, will be directed for accomplishing the goal of the institutions. In this case, money will be prioritized in 2 areas. First is the increased capacity of STEM program and of health professions. STEM program involves science, technology, engineering and math. Second is the increased student completion via progress scholarships and targeted participation in health and STEM programs (Caiden & Wildavsky, 1980). These activities can be broken down into the following Capacity building Innovation Student completion Institutional investment Compensation Mission-based performance Goal On prioritizing these activities or areas to be funded, the following results will be obtained. The Prioritized Budget for the Dubai Star University Area/ Activity Objectives Allocation ($) Revenue Fees 100 m Institution contribution 15 m Others 15 m Capacity Building Expansion of summer course offers, leveraging of hybrid and online courses for increased capacity and flexible scheduling, expansion of boot camp courses and five-week courses 30 M Leveraging on hybrid courses 7 m Leveraging on Online course 8 m Expansion of boot camp courses 7 m Expansion of five-week courses 8 m Subtotal 30 m Innovation Expansion of delivery of hybrid and online course, improvement of data analytics for purposes of supporting career placement and program development, target marketing of such programs as STEM. 10M Expansion of delivery of Hybrid courses 2.5 m Expansion of delivery of online courses 2.5 m STEM Program development 2.5 m STEM Program target marketing 2.5 m Subtotal 10 m Student Completion Enhancement of early notification systems and student progress, increasing of mentoring and tutoring, targeted scholarships, enhancement of placement, admissions and assessment programs. 30M Enhancement of early notification systems 4 m Facilitation of student progress 4 m Improvement of mentoring and tutoring 4 m Targeted scholarship 4 m Post training evaluation 4 m Pre-training needs assessment 5 m Placement of admission 5 m Subtotal 30 m Institutional investment This is done on target tuition, private endowments and investment, reallocations and savings from increased efficiency 20M Target Tuition 4 m Private endowments 4 m Private investments 4 m Savings 4 m Reallocations 4 m Subtotal 20 m Compensation Compensation is essential for retaining and recruiting well-qualified staff and faculty 7M Salary 3 m Travel allowances 2 m Gratuities 2 m Sub total 7 m Goal First is the increased capacity of STEM program and of health professions. STEM program involves science, technology, engineering and math. Second is the increased student completion via progress scholarships and targeted participation in health and STEM programs. 24M Increased capacity of science 4 m Increased capacity of technology 4 m Increased capacity of Engineering 4 m Increased capacity of Math 4 m Progress scholarships in health programs 4 m Targeted participation in health programs 4 m Subtotal 24 m Mission-based performance. This involves supporting strategic plan to boost completions and participation. 9 M Total 130 M The institution will therefore, allocate the money into the above-tabulated areas. The areas with the largest allocation are the most prioritized areas while the areas with least allocation are the least prioritized areas. Priority in this case, is therefore, based both on the significance of the particular area or activity to be financed to the institution as well as the financial needs of the area or activity. Conclusion From the discussion on budgeting, it is clear that there are various budget systems that Dubai Star University can employ in budget preparation. Because budgeting has a number of crucial roles to play, it is important to come up with a budget that is very realistic and which matches the needs of the institution. Some needs are very important in an institution than others. Therefore, it is upon the budgeters to consider these needs in order of their importance. After recognizing this order, the budgeter needs to know the total amount available for allocation. From here, the amount is allocated to the different areas, at different amounts based on priorities. In this case, the area deserving a lot of attention and having great importance is prioritized with larger allocation than the area that is of less importance. This prioritization is done based on cost benefit analysis. References: Balloffet, N., Hille, J., & Reed, J. A. (2005). 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