University operating budget

Each year, Financial Planning & Analysis develops a budget blueprint for the university in consultation with colleges and other Ohio State units. The Board of Trustees ultimately approves the budget plan.  

 

Fiscal year 2021 financial plan

Ohio State continues to invest in our strengths as a leading national flagship research university and thriving academic medical center.

Our consolidated Fiscal Year 2021 budget projects:

  • $7.5 billion in revenues
  • $7.0 billion in spending

The budget plan also reflects Ohio State's commitment to our strategic plan, including focused investments in access and affordability, academic excellence, and patient-focused health care. 

Read the FY21 financial plan

 

For general funds, the Columbus campus uses an allocation model that is comprised of two components: a modified Responsibility Center Management (RCM) model and the strategic investment of central funds. This structure allows for decentralized decision-making and control of financial resources at the colleges and support units while still retaining central funds for holistic strategic investment purposes. The modified RCM allocation model assigns substantial control over resource decisions to individual colleges and support units. The underlying premise of the university’s decentralized budget model is entrusting academic and support unit leaders with significant control over financial resources, leading to more informed decision-making and better outcomes for the university as a whole. Through this decentralized model, colleges in particular are incentivized to increase resources by teaching more credit hours and increasing research activity. 

Each college and support unit receives a portion of general funds in support of both academic and administrative functions. The process for allocating the funds is administered through the Office of Financial Planning & Analysis under the guidance of the Chief Financial Officer and Provost. General funds are allocated to colleges and support units on a marginal basis under an established set of criteria. In other words, increases (or decreases) in the pool of general funds available each budget year are allocated back to colleges and support units as increases (or decreases) to their base general funds budgets. While the allocation is on a marginal basis, the change is calculated based on total revenues.

Revenue is allocated to colleges based on three primary funding formulas. The first funding formula for colleges utilizes a model to distribute undergraduate marginal tuition and state support. Sixty percent of the funding is allocated based on total credit hours taught, while forty percent is allocated based on the cost of instruction. This allocation method considers the fact that some courses have a higher cost for delivery and are allocated a greater share of the funding. The other two primary funding formulas allocate graduate tuition and state support based on a two-year average of credit hours in fee-paying categories (tuition) and type of course taught based on cost of instruction (state support). As a college teaches more of the share of total credit hours, it receives a proportionally larger share of the incremental funding. Conversely, if a college’s share of the hours taught declines, the college’s allotted share of incremental funding will correspondingly decline proportionally. The two-year average credit hour driver acts as a smoothing mechanism in times of unforeseen volatility. Colleges will receive their share of marginal revenue on indirect research cost recovery, based upon the college’s share of research revenue. Fee revenue from differential, learning technology, course and program fees are provided directly to colleges.

Support units are funded through a combination of central tax, specific activity-based assessments, and an overhead rate charged to auxiliary and earnings units. The central tax, assessments and overhead charges are designed to provide the funds necessary to maintain support services such as payroll services, central human resource services, and academic support services. Support units are generally ineligible for marginal revenue changes because the funding formulas rely on credit hours taught; instead, support units must request additional funding during the annual planning process to support new services or mandates.  

Note: The operating budget is prepared as a planning document for the university and uses the best assumptions and expectations available when it is created. The audited financial reports prepared through the Controller's office reflect final performance based on actual circumstances.