Making Things Work
John V. Lombardi

©Today, June 1998

We take great pride in the strategic initiatives of our faculty, staff, and students: the It's Performance That Counts campaign; ISIS, the Integrated Student Information System for academic advising and tracking; the computing requirement that guarantees all of our students full access to the computer and information revolution; the UF Bank for measuring the performance and quality of our academic programs; and research initiatives such as the Brain Institute and the National Science Foundationís Engineering Research Center for Particle Science and Technology.

These major initiatives and many others illustrate the energy, quality and performance of everyone involved with our university. Other initiatives, less dramatic and more utilitarian perhaps, also make it possible for the university to perform better and more effectively.

Over the past two years, as a consequence of the UF Bank, we have begun decentralizing a wide range of budget management decisions to the colleges and other units. With the ability to track performance through the UF Bank, the university no longer needs to micromanage operations. Instead, after establishing a budget we delegate its management to the deans. They know best how to reallocate and readjust expenditures to meet changing demand or take advantage of emerging opportunities in teaching and research.

A dramatic indicator of the effectiveness of giving operational authority to the deans lies in the amount of carry-forward dollars at the end of each budget year. In the jargon of our bureaucracies, carry-forward represents each college's annual savings from its budget. These funds are used to pay for minor repairs and renovations, equipment, access to additional course offerings and other items that enhance the university's quality and productivity. In the past, without the effective controls of the UF Bank, a college's savings returned to the central administration at the end of the year. Central administration carried forward these savings to the next year and then redistributed them to various programs. Managers saw no reason to postpone expenses or to save for new investment. Instead, as is often the case in public enterprises, unit managers spent as much of their budgets as possible by the end of the year. Under the old system, we managed to save just under $500,000 dollars to carry forward.

All that changed this past year, when we decentralized the management of budgets. With control and flexibility in the hands of the deans, but with accountability through the UF Bank, the colleges keep their savings. This gives the deans a powerful incentive to operate efficiently and effectively because they keep the savings. With the incentive, carry-forward dollars increased over nine times to $4.7 million last year. This year, the colleges use their savings for reinvestment in priority projects related to teaching and research. The right incentives produce remarkable change.

While the carry-forward example offers a powerful illustration of what happens to improve the university when we decentralize authority and accountability, other relatively invisible but nonetheless significant innovation makes success possible. Measuring outputs means we no longer need to approve expenditures or shifting of funds. Deans decide whether to hire a secretary, a graduate assistant or a faculty member, or whether an investment in computers is the best decision. At the university level, all we need to monitor is the total expenditure, to be sure deans stay within budget, and the salary expenditures, because we do have control over the total salary dollars expended.

Everything we did in managing the financial affairs of the university, from hiring faculty and staff, making assignments, purchasing equipment, to buying supplies involved weeks of work and a blizzard of paper for university approvals. Thanks to a tremendous effort by our financial affairs staff, we now have an online computer system called Managing Your Money that allows deans and their staff to track expenditures and make transfers and readjustments quickly and effectively through the university Intranet. Managing Your Money shortened the process of transferring and readjusting expenditures from weeks to days or minutes. We operate faster and better than we did with the old manual centralized process with its multiple levels of approvals and delays. Thanks to computer verification, we maintain strict control over all budget categories. A dean who wants to create a position can discover through Managing Your Money exactly how many dollars remain available for this purpose. A dean who wants to transfer funds from one account to another can make this transfer immediately, secure in the knowledge that the dollars exist and that the purposes involved meet all state and university regulations.

This system, which on the surface sounds so obvious and sensible we wonder why we did not do it sooner, took a major team effort to translate cumbersome state and university rules and paperwork into a streamlined computer-based system over the Intranet. So effective is this tool for enhancing productivity that Managing Your Money and our team won the Davis Productivity Award this year, recognition from Florida Tax Watch for improvements in government operations that result in increased productivity for the state.

This example shows that we improve the University of Florida's performance with the combined efforts of many people. While faculty and students; vice presidents, deans and directors; alumni and friends; the Legislature and the Board of Regents all need to support and direct our efforts, we also need the creativity and expertise of the technical staff to translate and implement our grand designs.

Performance counts everywhere at the University of Florida.