An internal budget approach was adopted by Clemson University in Fiscal Year 1989-90 to decentralize the budget process by shifting the responsibilities and rewards for sound financial management to defined budget centers. The budget centers have been established along the lines of vice presidential authority, with unit heads responsible for managing their own budgets. This budget approach, called the Budget Performance Incentives Program, includes four elements:
The Budget Performance Incentives Program involves the identification of revenue sources and the assignment of the revenue to a budget center. Each center also receives a distribution of state appropriations and student fees. If additional money from state appropriations and student fees is available in the new fiscal year, budget allocations are made in the form of block grants.
Budget centers may apply for funding from the Innovation Fund. This fund, administered by a committee, is for unique ideas that do not have an alternative funding source. Funds may also be requested from the Research Matching Fund. This fund, administered by the Provost and the Vice President for Research, is for matching major sponsored program proposals.
The Budget Performance Incentives Program responds to new planning initiatives through the withholding of certain resources from the system for special venture capital proposals, the creation of special funds for cost containment, and to a lesser degree, through the modification of block funding criteria. Policies concerning the use of revenues could also be modified to create new incentives in response to new institutional strategies. Finally, needs assessments will still be conducted, but at a lower and more appropriate level of the institution. As in the case of the University of Pennsylvania, as described by Strauss and Salamon, the primary objective is "independence and authority in academic planning, in return for responsibility in fiscal planning."