March 2023

Dear Colleagues,

Northern Illinois University (NIU) is moving to adopt an equitable, iterative budget planning process that aligns resources with strategic priorities over annual and multiyear time frames, and that achieves long-term financial sustainability through a combination of revenue generation, expense reduction and reallocating resources. After having experienced a decade of declining resources, fiscal deficits and operational challenges attributable to our history of state disinvestment, declining enrollment, the Illinois budget impasse and the COVID pandemic, now is the time to collaboratively turn the page on past challenges and move the university’s goals on resource development and fiscal sustainability forward.

Our plans are consistent with the university’s mission, vision and values, as well as the three overarching goals articulated in Thriving Illinois, the Illinois Board of Higher Education’s Strategic Plan:

• Equity—close the equity gaps for students who historically have been left behind;
• Sustainability—build a stronger financial future for individuals and institutions; and
• Growth—increase talent and innovation to drive economic growth.

In this context, NIU has committed to sustaining budgets that are academically responsive and fiscally responsible; that reflect our dedication to being student-centric and equity-minded; and that demonstrate an ongoing investment in our faculty and staff.

This will be achieved by using tactics and objectives reflective of the recommendations received from Budget Resource Planning Group (BRPG). Provost Ingram, Vice President Middlemist and I support the report’s overarching conclusions, and we look forward to continued engagement with the university community as we move to prioritize and implement the changes suggested in this report.

We are grateful for the thoughtful participation of our university community in discussions convened by the BRPG. We also want to thank Drs. Brinkmann, Blazey and Edghill-Walden, and ACE Fellow Adrienne King, for their work. They did an amazing job not only understanding and communicating our challenges and opportunities, but also synthesizing stakeholder ideas and comments into actionable recommendations.
In the BRPG report and their Oct. 4, 2022, presentation to NIU’s monthly leadership meeting, the members of the BRPG advanced six overarching recommendations to help NIU achieve long-term fiscal sustainability. Many have been incorporated into NIU’s 2023 University Goals. Their ideas are consistent with national trends in higher educationand are appropriate to our situation.

NIU leadership supports the BRPG recommendations and, at the same time, we recognize that we must be thoughtful about what we prioritize. Our efforts need to be sequenced with a focus on removing impediments before advancing major change, and with recognition of our capacity limitations. The following, along with the 2023 University Goals, provides insight into our plans and commitment to action for moving forward:

Budget Planning Process: Equitable, Iterative, Multiyear and Aligned with Mission, Vision and Values

The NIU leadership team agrees with all elements of this recommendation. Accordingly, we are committed to:

• Changing how we currently do things to foster a budget and planning process and culture, including more separation of budgeting from accounting processes, and a budget review process and timeline more conducive to multiyear planning.
• Supplementing the guidance already in place from the strategic action planning framework and university goals with an equity rubric that encourages pursuit and adoption of strategies consistent with NIU’s mission, vision and values.
• Implementing budget planning processes that incorporate iterative feedback between senior leadership and departments and divisions to choose between competing priorities. 

As noted in the 2023 University Goals, we have started the work associated with this recommendation, which will require a multiyear effort .

Separate Structural Budget and Innovation Fund

• We support the creation and maintenance of an innovation fund that presents a recurring opportunity but that is managed outside of the university’s general operating budget. Last year, we successfully piloted this concept with our deans and vice presidents, and we look forward to expanding and improving the concept and process.

As we move forward, this plan will need to be integrated with the work in progress by our budget office. For example, as a part of this work, we will need to develop consistent budget definitions so that we have a common language that the university, leadership and board understand.

Need for Revenue Generation, Expense Reduction, Reallocation of Existing Resources

• Leadership will continue to advocate for adequate funding for the university and our students at the state and federal levels. Simultaneously, the university must develop balanced budgets that remain responsive to our mission, vision and values. We agree that revenue generation, expense reduction and resource allocation will need to be part of our multiyear strategy to eliminate a structural deficit. We appreciate the BPRG suggesting specific dollar targets for revenue generation and expense reduction, but we are not ready to endorse numerical targets at this time.

Need to Incentivize Units (through “Gainsharing”)

• Leadership believes it is critical to balance the importance of incentivizing units with the need to ensure units understand that NIU’s structural budget must be a multi-funds budget. In our context, we will use the term “gainsharing” to describe the situation where university units and central administration split surpluses associated with year-end savings, adoption of efficiencies and net-revenue generation. Different formulas and approaches can be used based on the particular circumstances of the innovation, efficiency or programmatic enhancement. We look forward to further conversations about approaches that respond to the varied needs of units, departments and divisions. Such an approach would provide meaningful incentives to units and also reflect our shared responsibility to our students and institution. The 2023 University Goals suggests that proposing and piloting a gainsharing strategy would be appropriate next steps to be initiated in FY23/24.

Education, Reporting/Forecasting, Change Management to Drive Increased Transparency and Accountability

• We understand and support the need for a transparent budget process and acknowledge that the university needs to explain and set expectations around change through education and data sharing with appropriate support and dialogue. These elements are essential to achieving our goals of transparency and accountability in multiyear budgeting. The 2023 University Goals commits to a multiyear timeframe for providing training that covers basic budgeting terminology and concepts, supported with access to actionable data.

Need to Remove Impediments/Strengthen Infrastructure

• Leadership supports a process that revisits practices and policies to remove impediments to multiyear budgeting. A multiyear budget will not work if we don’t remove operational and tactical impediments. Accordingly, we will need to stop doing some things that we do, and start doing things that we haven’t typically done, to strengthen the infrastructure necessary to support multiyear budgeting. For example, we need to assess our current business practices and determine how we can implement processes and policies to encumber funds and bridge fiscal years that better support NIU’s mission and goals. As a first step toward accomplishing these objectives, the 2023 University Goals commits to more fully understanding the intersection of long-standing NIU practices with regulatory guidance and statutory obligations.

Conclusion

This is the time for NIU to join universities across our country to commit to a budget planning process that is equitable, iterative, multiyear, aligned with strategic priorities and supportive of innovation. We recognize that eliminating the structural deficit that threatens NIU’s future will require our unwavering support to move forward initiatives focused on revenue generation, expense reduction and resource reallocation. It will also require enhanced IT and data capabilities and significant change in our university’s practices, policies and processes. We look forward to working with you to create and implement new tools, new timelines and new ways of thinking.

Forward Together,