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Accountability framework: planning and budgeting cycle

The Strategic Plan is informed by a sense of what the University hopes to be in the longer term as well as by a sharper sense of how the University must position itself in the next 10 to 20 years if it is to sustain the vision of being one of the great universities of the world.

Planning and budgeting cycle

Download a chart showing the annual accountability cycle (PDF 42 kb).

The Strategic Plan and the Annual Strategic Review

The Strategic Plan is informed by a sense of what the University hopes to be in the longer term as well as by a sharper sense of how the University must position itself in the next 10 to 20 years if it is to sustain the vision of being one of the great universities of the world. The primary strategic focus, however, is more immediate and involves goals and strategies with three to five year time horizons.

Through an ongoing strategic planning process, the University Council charts a long-term course for the University and monitors performance against plan.

To the extent that it is based on valid strategic analysis, and unless the internal and/or external circumstances facing the University change dramatically, the broad thrust of a Strategic Plan should remain relatively stable. The strategic environment is nevertheless a constantly evolving reality. The planning process therefore provides for an annual strategic review - offering a detailed audit of the external environment and internal capabilities - accompanied by the progressive realignment of the Plan from each fresh strategic perspective.

The evolution of strategic thinking in the University is documented through these annual iterations, with the title being qualified with successive sub-titles such as 'Perspective 2002', 'Perspective 2003', 'Perspective 2004' and so on. The idea of a plan which runs down to a fixed time horizon is unsatisfactory. It lacks the flexibility either to adapt to evolving circumstances or to accommodate the reality of multiple time horizons.

Currency and saliency are promoted by the process of annual review and update. At the same time a focus on longer term performance objectives is maintained by inclusion within the Strategic Plan of a limited number of University Targets set by Council as being the basis on which it will carry out periodic measurement of progress against core ingredients of the Melbourne Agenda. 'Perspective 2004', the most recent version of the Strategic Plan, includes University Targets for achievement in the period to 2007.

In February of each year, a Conference of Deans and Heads of Departments, is held to consider strategic issues for the current and following year. This is followed by a Council Planning Conference at which Council members confer to ensure that the Strategic Plan is reviewed and 'fine-tuned', taking into consideration performance and operational priorities for the following year. These conferences allow strategic priorities, goals and directions to evolve with changing circumstances, but at the same time preserving an underlying strategic continuity. There follows a period of consultation within the major academic and administrative management bodies of the University over the draft Strategic Plan. Council approves the final version of the Strategic Plan, after it has been formally considered by Planning and Budget Committee and the Academic Board, in May of each year.

The Operational Plan

An annual Operational Plan translates the broad direction of the Strategic Plan into more immediate strategies and targets. The aim is to ensure that current decisions reflect a well-developed planning process that helps the University shape its own future. The University works to establish an effective Operational Plan that is a practical, working document, designed to translate consistent strategic thinking into day-to-day decision-making, and to ensure that a sense of strategic priority informs the routine management of human, financial and capital resources.

The annual Operational Plan does not purport to be a compendium of all the activities to be undertaken, or issues to be dealt with, over any one year. Rather, the Plan seeks to identify a limited number of key priorities requiring action at the University level over the coming year in order to make progress towards the achievement of longer term goals and strategies set out in the Strategic Plan, in particular, to promote sustained progress against the medium term University Targets set by Council. The focus of the Operational Plan is on specifying targets and assigning individual accountabilities for their achievement so as to ensure outcomes can be readily measured.

Operating over a one-year period, the Operational Plan needs to be finalised closely to its actual implementation. It also needs to be available within the University to inform the detailed operational planning undertaken within faculties and administrative divisions. The Operational Plan is prepared in the middle of the annual planning cycle, after the intensive period of internal reviews and planning has taken place, and is submitted to Council for approval by November, along with the University's Annual Budget.

Supporting Plans

Melbourne, like any other university, is a loosely-coupled organisation in which planning is distributed and necessarily a highly devolved process. The 'strategic' focus of operational planning at the University level generates a need for more comprehensive planning to identify and facilitate the implementation of institutional priorities in research and research training, teaching and learning and information technology, and to guide the annual program of activities that take place within Faculties, Departments, Centres and Administrative units.

Each of these subordinate plans are to be congruent with the goals, strategies and targets established in the Strategic Plan and given more immediate focus in the University's annual Operational Plan.

The Research and Research Training Management Plan, the Teaching and Learning Plan and the Information Strategy Plan are updated on an annual basis through the Planning and Budget Committee and, following consideration by the Academic Board, are submitted to Council for approval as a complete but concise statement of the priorities to be attended to over the immediate planning period in order to achieve successful outcomes in these fundamental areas of University activity.

Annual Faculty and University Administration Operational Plans are also developed in the context of broader University planning and priority setting. They are designed to translate institutional objectives into a more detailed statement of targets and accountabilities which guide Faculty and Administrative priority-setting so that they can make a substantive contribution to the goals, strategies and targets identified in the Strategic Plan and the Operational Plan.

Faculties and the University Administration are required to submit their annual operational plans, along with their proposed annual budget, in October- November, towards the end of the annual planning cycle, at a time when they are best able to specify the particular actions, in areas such as student enrolments, research, research training, teaching and learning, community development and resource management, that will be undertaken over the following year.

Although not a past requirement, academic and administrative departments are now formalising the outcomes of their regular planning and review activities into annual operational plans and periodic program plans that encompass both a strategic audit and the identification of key targets and accountabilities for their achievement. It is anticipated that by 2006 the annual departmental quality self-assessment exercises will be subsumed into the development and implementation of departmental operational plans.

The University Budget

Operational Planning is vital because it drives the budget process. However, operational planning amounts to very little until it becomes a budget. Effective budgeting is an essential component of the planning process and demands a planned approach to the hard priority decisions that have to be made about the use of scarce resources.

Each year the annual cycle of planning and budgeting culminates in the development of an operating budget for the following year which allocates resources in a manner which supports the achievement of priorities and targets identified through the planning process. An incentive-based approach to budgeting complements the plan-driven manner in which resources are allocated and encourages the strategic application of available funds within a devolved budgeting environment.

An annual Planning and Budget Conference is held in June to draft a plan-driven, incentive-based budget for the following year and budget projections for the ensuing triennium. At this Conference budget proposals from each major budget division are evaluated by the Vice-Chancellor, Deans, Academic Board Officers, student representatives and senior managers and allocations are proposed for the following year. The Conference also reviews and considers funding proposals for the annual Capital and Property Services Plan and other major items of University expenditure.

The University Council has final responsibility for management of the University's resources, including approval of the annual budget. The Finance Committee - a sub-committee of the University Council - has the primary role of advising Council on the organisation and management of the University's financial and business affairs. Once it is satisfied with its terms, the Finance Committee submits the University Annual Budget to Council for approval. To ensure congruity between planning and resource allocation, Council considers the Annual Budget and the Operational Plan at the same time. Any significant subsequent variations to budget revenue expectations are reported through Finance Committee to Council in December each year, prior to publication of the Annual Budget and the commencement of the budget year.

 

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