Revenue and expense allocation model

The revenue and expense allocation model was developed through a consultative process with allocation methodologies approved by the Deans and Provost. The model has three key functions to support academic and financial planning of the University:

• Enhances the understanding of how revenues are generated and how costs are incurred and allocated at the Faculty level in a transparent manner.

• Supports longer-term resource allocation decisionmaking for academic units.

• Establishes an incentive mechanism to ensure yearend surplus funds are allocated to the Faculties and to support institutional strategic priorities.

The third purpose refers to the funding of the Deans’ Strategic Funds, which are allocated based on a two-envelope basis. The first envelope recognizes the contributions of the Faculties that have a positive contribution margin (i.e. expenses less than revenue) after space costs, recognizing this contribution margin level reflects expenses Faculties have direct control over. The second envelope provides an incentive for year-over-year improvements in contribution margin, after space costs, for all Faculties through a method that allocates a share of the surplus based on the yearover-year improvement. The use of these funds are bound by the terms of reference with the Provost and are to support the institutional strategic priorities.

Figure 55 reports the full actual funding results for 2022-23 using the Revenue and Expense Allocation Model. Figure 54 is a visual representation of the 2022-23 actual results versus budget, detailing expenses as a percentage of revenues allocated by each Faculty and in total. The model identifies three Faculties generating net positive contributions, and three Faculties requiring additional funding from these positive contributions to support their operations. Through guidance from the Senior Academic Leadership Team, this model reports all tuition based on students in seats. Regardless of a student’s home Faculty, all tuition is allocated to the course students take and the Faculty the course belongs to.

Going forward, the model will continue to be evaluated and adjustments to the model will be made, in consultation with the Senior Academic Leadership Team where appropriate, to ensure the model is meeting its goals as well as supporting the Institutional Strategic Plan.

(1) See page 57 for units included in Space Costs. Note: Space Costs are allocated directly to Faculties in this section. The space costs respective lines in the allocation model.

(2) Excludes Research Support Fund grant revenue as shown separately as part of revenue.

(3) See page 56 and 57 for details of units included in these categories.