Higher Education

Performance-based budgeting: strengthens the higher education budget process


Environmental pressures such as declining state support, continued pressure to improve efficiency, and the need to improve student outcomes means that many higher education institutions need to look to more advanced financial planning tools to make better financial decisions for their schools.


Thirty-two states, including Virginia, Tennessee and Indiana, have a funding formula or policy that allocates money to public colleges and universities based on measures such as course completion, time to degree or the number of low-income and minority graduates.


The Portland State University’s Budget Office recommended the university adopt a performance-based budgeting model (PPB) for fiscal year 2015, after completing consultations and evaluations for various budgeting methods. As part of transitioning to a PPB model, the Budget Office developed several resources, including a video which discusses the reasons and benefits for the change.


With competing claims for resources, performance-based budgeting allows universities and colleges to strengthen the budgetary process, by using objective criteria to:

  • Determine resource allocation
  • Ensure accountability among those responsible for management
  • Shift the budget focus to the priorities of the institution rather than department-specific goals
  • Make the budget process more transparent
  • Engage all stakeholders in the budgeting process


Especially in times of fiscal constraint, performance-based budgeting helps schools focus on funding programs that advance progress on the determined goals and priorities.


The capability to link budgetary requests to a school’s publicly stated performance goals helps to align resources with results. This is not available when using conventional spreadsheet budgeting.


Questica’s budgeting, performance and data visualization solutions deliver all of the necessary performance-based budgeting tools, while also offering a high level of configurability and integration to a wide variety of ERP systems. Questica’s solutions were purposely built for the public sector.

Universities and colleges that employ proven performance management systems are well positioned to take on performance-based budgeting. If you are considering adopting this model, schedule a demo of Questica solutions today.