Budget Model ReSTART

The purpose of any university’s budget model is to enable it to carry out its mission in a fiscally sound, planful, and transparent way. A budget model is the framework for allocating costs and revenues. A budget model doesn't create or eliminate revenue. Rather, it aligns existing revenue with the university's priorities. 

The University of Pittsburgh uses an incentive-based budget model called ReSTART (Revenue Sharing to Accelerate Responsive Transformation). This model does the following:

  • It empowers the University's Responsibility Centers (RCs) as they have the best understanding of their operations. 
  • It gives RCs incentives to generate revenue, achieve cost efficiencies, and support strategic initiatives within the schools, including those that support the Plan for Pitt 2028.
  • It encourages collaboration on research. 

University of Pittsburgh faculty and staff can review more information about Budget Model ReSTART on our SharePoint site.

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Pitt's Budget Model

At Pitt, an RC is a budgeting and financial reporting unit such as a school, regional campus, executive office, or support unit designated by the University. 

Under the ReSTART model, there are two types of RCs: 

  • Primary -- Schools and other departments that earn revenue
  • Support -- Non-revenue generating departments such as Pitt IT and Human Resources, that provide services that are essential to the mission of the University.  

The Budget ReSTART model equips RCs with the tools they need to evaluate not only direct revenues and expenses but also allocated central revenues and costs. It provides visibility and oversight over the allocated revenues and costs, especially as it relates to central services received.

Budget Flow Chart

RC heads and senior administration are able to assess the full impact of each unit’s operations and track progress over time. This data supports units with positive performance trends in requesting University funding for strategic initiatives. The process also helps to align available resources with the strategic priorities outlined in the Plan for Pitt.

VIEW PLAN FOR PITT

Primary Responsibility Centers

Generate revenue, cover direct costs, are accountable for performance, and pay a participation fee to support strategic funding mechanism. 

Primary RCs include:
  • Academic RCs: (Arts & Science, Business, Computer and Information, Dental Medicine, Education, Engineering, General Studies, Health & Rehabilitation Sciences, Law Nursing, Pharmacy, Public Health, Public and International Affairs, and Social Work)
  • Regional Campuses: (Bradford, Greensburg, Johnstown, and Titusville)
  • Other Revenue Generating RCs: (Athletics, the Learning Research and Development Center, the University Center for Social & Urban Research, Real Estate, and Business Hospitality & Auxiliary Services)
     

 

Student on computer

Support Responsibility Center

Provide services to Primary RCs, fully allocate their net expenditures (revenues net of expenses) to Primary RCs, and are accountable for agreed-upon service levels. 

Support RCs include:
  • Academic Support: (Honors College, Office of Admission and Financial Aid, Student Affairs, SVC/Provost, SVC/Health Sciences, and the University Center for International Studies)
  • Administrative Services: (Chancellor, Office of University Counsel, Public Safety, SVC/CFO, and SVC/Business and Operations)
  • Employee Services: (Human Resources)
  • Facilities: (Facilities Management, Office of Planning, Design, and Construction)
  • General University: (General University RCs)
  • IT: (Pitt Information Technology)
  • Libraries: (University Libraries)
  • PAE: (SVC/Philanthropic and Alumni Engagement)
  • Research Administration: (SVC/Research)

 

Police Officer with students

Revenue Allocation

The following methods allocate centrally-recorded revenues to Primary RCs in the model.

Allocate to School of Instruction (85%) and School of Record (15%) using credit hours and residency up to Arts & Sciences rate (base price per credit hour for Pittsburgh campus) and base regional rate (for regional campuses).

Allocate 100% of differential tuition (amount above base) to School of Record.

Graduate and professional tuition revenue is directly identified by school and is then allocated in the model at 75% to the school of record and 25% to the school of instruction.

Allocation mirrors undergrad and grad allocation methods beginning in FY23

Direct Financial Aid: Allocate directly based on program

Central Aid: Allocate in proportion to allocated tuition

Allocate 100% to school that generated IDC revenue

Allocate to RCs based on proportional share of in-state student tuition

Allocate to RCs based on proportional share of entity 02 financial aid

Budget ReSTART History

Prior to Fiscal Year 2023, the University of Pittsburgh operated under an incremental budget model, which involved taking the prior year’s budget and adjusting for certain changes, such as compensation, to determine the current year’s budget.

In 2020, the University initiated a comprehensive review of its budget model. The assessment revealed several key challenges, including limited transparency, unclear authority and accountability at the RC level, insufficient incentives to generate revenue or control costs, and a constrained ability to support the strategic priorities outlined in the University's strategic plan. In response, the University of Pittsburgh launched an initiative to enhance its budget model, aiming to better align financial decision-making with its strategic objectives.

The new model was developed using feedback from discussions with faculty and staff. Key to this process was input from a steering committee co-chaired by the CFO and Provost. Members of the committee represented administrative and academic leaders from across the University and provided expertise, support, and recommendations throughout the process. This group met over a 10-month period to develop the structure of the model.

Additionally, focus group meetings were held with all the RCs; a deans’ retreat took place, and more than 50 meetings were conducted with deans, regional campus presidents and RC directors of administration. Sessions were also held with key stakeholder groups including the Senate Budget and Policy Committee, University Planning and Budget Committee, University Senate, Staff Council, Budget and Planning Community of Practice with Directors of Administration and business managers, senior leadership, and the Board of Trustees Finance and Budget committee.

The transition to the current incentive-based budget model began with in Fiscal Year 2022, when the new and old models ran in parallel, with full implementation in Fiscal Year 2023.

This transition did not affect the School of Medicine Division (SOMD), as it already operated under a full Responsibility Center Management (RCM) model, which is more de-centralized than Budget Model ReSTART. The ReSTART model includes the impact of net shared services paid to central University operations by SOMD. This impact is reflected as a net credit “SOMD management fee” (or reduction of expenses) applied to the cost pools affected, which reduces the charges allocated to the Primary RCs.