Dalhousie's Budget - It's About Choices

President's Bulletin: August 31, 2017

For several years, I have been studying Dalhousie’s budget, looking at how the institution allocates its money with respect to academic and non-academic expenditures and investments. A few years ago, Dalhousie Faculty Association enlisted the help of a forensic accountant so we could more fully understand the issue.  As a result, DFA produced a Review of Dalhousie University’s Finances, which is being updated with data from 2016-2017. As collective bargaining moves into full swing, I thought it would be useful to highlight a few points with respect to Dalhousie administration’s budget choices.
 

Making Choices
For the past 15 years, the Dalhousie administration has been directing more funds away from academics and towards infrastructure and administration.  These are deliberate choices.  By making them, the Administration is eroding the ability of academic staff across all faculties and campuses to deliver on the mission of Dalhousie: excellence in teaching and research.  While academic erosion may not be as obvious as a need for building repairs, academic staff must understand and be concerned about the erosion that is taking place.
 

Enrolment Related Budgetary Allocation
The Administration recently released the December 2016 Report on the Enrolment Related Budgetary Allocation Formula (ERBA). ERBA is the “mechanism by which Dalhousie University links program enrolments and class registrations to annual budget allocations of the Faculties.”1 That report makes a series of recommendations; of significant note is the recommendation that “Dalhousie should adopt centrally a risk-management policy that limits the ability of deans to spend money derived from ERBA on recurring costs for tenure-track faculty; fully respecting the Collective Agreement, such a policy should recognize the necessity of appointing in greater numbers limited-term or sessional faculty members.”

The ERBA report relies on the Dalhousie Budget Advisory Committee’s 2017 report and its bundling of responsibility centre expenditures into three categories to conclude that Dalhousie's proportion of spending on its academic mission is in line with other Universities. This reasoning is applied to justify increased hiring of precarious staff.  This reasoning is based on flawed evidence: it does not accurately separate out academic and non-academic spending.

 

Decline in Spending on Academics
Historically, we are at a near all-time low in spending on the academic mission as a percentage of operating fund revenue.  As illustrated in the following table, Dalhousie’s investment in the “academic responsibility centre” (a budget term for academic spending) has decreased from 73.6 per cent in 2002-2003 to 64.3 per cent in 2016-2017.  The decline has reversed slightly in the past two years, but not significantly given the historical trend.
 
In its 2017 report, Dalhousie’s Budget Advisory Committee says that Dalhousie’s spending on academic service and support is “comparable to the average of the other U15 institutions” and that it spends more than other Nova Scotia universities on the delivery of academic programs.3 This is a difficult comparison to make as budgeting models are unique to Universities.  In the remainder of this report, I provide three different perspectives on the Dalhousie administration's budget choices.  First, in the following chart, you will see the percentage of revenues dedicated to Dalhousie’s academic responsibility centre for the past 15 years.  If Dalhousie’s academic responsibility centre received the same percentage of the operating fund revenue funding now as it did in 2002-2003, there would be an additional $43.2 million for the academic mission of the University in 2016-2017 alone.4

Share (%) of Total Dalhousie Operating Fund Revenue
Spent on Academic Responsibility Centre
Millions Directed Away from Research and Teaching
In addition to this trend, millions of dollars are being directed away from operating funds and research toward capital expenditures each year.  Over the past 15 years, a total of $122,242,000 has been directed out of research, and another $215,125,000 out of operating (which includes academics).  That’s an average of more than $22,000,000 being directed away from the academic mission each year for 15 years. Over the same period, a total of $498,946,000 has been directed toward capital expenditures.
Interfund Transfers 2002/02 - 2016/17
(in $000s)
Dalhousie Invests Less in Academics than Most Comparable Universities
The Dalhousie administration invests less in the people who deliver its academic mission, compared to other people at the University, than most other Universities in Canada.  As you can see in the following graph, of the 18 universities in Canada that Dalhousie often uses for comparison (U15 and salary comparators), we fall in the bottom five for this metric.  The top 13 universities in the graph spend between 0.3 percent (Manitoba) and 12.3 percent (Laval) more on academic salaries than on the non-academic salaries. The Dalhousie administration spends as much on non-academic salaries as it does on academic salaries.  Only four Universities in these groups outspend academic salaries on non-academic salaries to at least the same degree as Dalhousie.
Academic Salaries (in % of non-plant expenditures) minus
Non-Academic Salaries (in % of non-plant expenditures) 2014-2015
Let’s Get Back to Our Mission
If Dalhousie is to restore its reputation as a world-renowned educational institution, it must increase, not reduce, its investment in our core academic mission: teaching and research.  Diverting operating funds away from academics and research into capital projects, tying precarious employment to budgetary constraints caused by choices, and increasing administration costs does not bode well for Dalhousie’s educational mission.  New buildings and student services alone will not attract top students and scholars to Dalhousie. A full commitment to the highest possible quality of education and research will.
 

Sincerely,
Darren Abramson
DFA President
 

References:

1. Ronald B. Bond Consulting: Report on the Enrolment Related Budgetary Allocation Formula (ERBA) for the Provost of Dalhousie University, December 2016.
2. Ibid. pg. 31.
3. Dalhousie Budget Advisory Committee Operating Budget Plan for 2017-2018: Report LIV. March 24, 2017.
4. Calculation provided by Matson Driscoll & Damico Ltd. Forensic Accountants, August 29, 2017.
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