Planning for Higher Education Journal

Effective Use of Resources: SCUP 11 in Retrospect

The Target Ratio Model for Planning and Budgeting
Journal Cover
From Volume 5 Number 6 | December 1976
By Donald Triezenberg

The following article, which was presented to SCUP 11 conferences in July 1976, illustrates a "target ratio" model for effectively coupling decentralized planning and centralized budgeting within a college of arts and sciences. According to the model, budgetary expectations for the college as a whole are expressed to the dean as a target ratio of income to expense. The dean in turn sets suitable target ratios for each department, recognizing differences in thier budgetary potential by assigning different ratios. The contribution of each department toward fulfilling the overall college budget is acknowledged by a simple formula relating the college ratio to the departmental ratios. In the view of the author, who is Special Assistant for Academic Affairs to the Provost and the President at The American University, the target ratio approach to budgeting supports the planning process by providing departments with realistic expectations of the budgetary resources available to them over a multiple-year time span while also allowing them maximum flexibility in planning for the use of these resources. It also gives departments a reasonable guideline for predicting the budgetary consequences of their planning decisions.

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