What does the KAIST Budget Team do?

There are two major tasks: the first is to receive and manage contributions from the government, and the second is to manage the executive budget collected from all other financial resources. As for the specific work involving the executive budget, there is work related to the board of directors as well as tasks related to budget allocation, which is dependent on the current status of income expenditure. And to obtain governmental contribution, KAIST looks for new projects. For example, when air pollution and particulates became a hot topic in Korea, the school pushed ahead with new projects related to them. Furthermore, since AI is trending these days, many research groups have been pursuing AI-related projects. The budget team receives governmental contributions based on ongoing projects and long-term school development plans. Since KAIST is an “institute of science and technology”, it does lots of scientific projects for the government.

The online learning systems of other Korean universities are funded 3 to 6 times more than that of KAIST. How was KLMS budget calculated and why was it so low compared to other universities?

We are not so sure how “3 to 6 times more” was calculated, as we do not know how to compare our KLMS budget with other universities. The principal budget of the Learning & Teaching Support team comes from the government contribution. We have been receiving a fixed amount of government contributions since prior to the current COVID-19 crisis, but now we have an unexpected variable: coronavirus. Therefore, the KLMS team’s budget became insufficient to respond to the crisis, as they had to improve the system while promoting new projects. We have tried to increase the budget, but it is not easy to increase the category of academic business expenses.

Online education has become more important during the COVID-19 crisis, yet the KLMS team consists of only two people. It seems necessary to recruit more staff to allocate them into sub-departments, such as big data or AI teams. How would the budget team support them? 

We are delighted and burdened at the same time, because the budget team cannot do everything. Of course, we are in charge of distributing budgets, but we can't get involved in increasing the number of staff. Therefore, if the team really needs more staff, it should be decided through consultation with the planning team, personnel team, and a committee that manages school personnel. It is not an option for the budget team to arbitrarily decide to spend governmental contributions on direct labor costs. However, what the budget team can do is to persuade the government by sending them a proposal that says, "We need more budget in this field," and get additional budget support.

On the day when KLMS server shut down, the KLMS team had to borrow the servers on credit, after discussing the problem with the budget team. Could you explain what happened that day?  

The Learning & Teaching Support team came to us and asked for the funds to introduce the public cloud server and build a new system. We couldn't increase the budget as much as we could, so unlike the original business plan, we distributed the budget in a way that they could spend 300 million KRW on improving the system. In other words, the money that should have been spent elsewhere was spent on urgently improving the system. Regarding KLMS, we will do our best. There is a project called real-time bidirectional education for which the school receives government contribution. With these resources, we planned to facilitate online classes for students by getting approval from an internal committee and the board of directors on a new academic business proposal. The school has been receiving governmental financial support since last year. Because it was the beginning of the project, it took time to settle down, but this year the committee has been already holding detailed meetings on how to spend the budget.

Recently, a lot of people have been making substantial donations to KAIST. How are these large donations being used by the school?

Regarding donations, the board of directors recently held a board meeting, where the same question was asked. Many people are interested in how money that Chairman Soo Young Lee donated to KAIST would be used because she was in the media so many times. But what Chairman Soo Young Lee said was that she will donate 76.6 billion KRW to support KAIST Singularity professors, in the hopes of producing Korea’s first Nobel Prize laureate. It means that the donation can only be used for this purpose. Sadly, her donation cannot be used for the welfare of students because it has a specific purpose. And secondly, the recent donation of 50 billion KRW by Jae Chul Kim, the chairman of Dongwon Group, is for fostering talents in the artificial intelligence sector in Korea. In addition, the 50 billion KRW cannot be used all at once; its operation plan is to be approved by the board of directors, such as how much would be spent this year and next year. This year, the Graduate School of AI decided to spend a certain amount of donations on research funds. Recently, an elderly couple in their 90s donated 20 billion KRW to be used for advancing science and technology. Also, if you look at department newsletters, they ask for department development donations, and these can only be used in their specific departments. What I would like to emphasize is that people donate with purposes and the school has to follow them.

What were the difficulties the budget team faced due to the COVID-19 pandemic, and how did you cope with it?

There were so many hardships. It was unprecedented. We predicted that the financial situation would not be good this year, so we asked each department to refrain from unnecessary business trips or expenses. And last June, the government even told us that they will cut government contributions by 30 percent. It's a lot, so each department had to tighten their belts and give money back. We reduced the buffer budget, such as utilities expenses. We had a hard time reducing even a small amount, but eventually gave 6.689 billion KRW back to the government. Nevertheless, we didn't reduce the budget related to student support and welfare. Our budget is divided into three categories: ordinary operating expenses very essential for school operation, research expenses, and academic business expenses. Last year, there was a huge reduction in ordinary operating expenses and government contributions.
 

How are the budgets at KAIST decided and allocated?

Around October, the general affairs team makes a prediction of next year’s profit based on admission fees, research project profits, and so on. Each department receives this information, and they make profit and expenditure plans based on it. Through this process, one big “household book” (business plan) is made. Then Vice-President for Planning and Budget Bowon Kim holds an internal committee regarding the plan. After deliberation by the board of directors and a resolution are made, account settlement is made. Yet, this is still not the end. The committee is held once again in March, after combining the carryover budget with the budget plan. Once the board of directors approves the plan, we inform all departments that this year's budget will be implemented according to the plan.

What are the different sources of KAIST’s funding?

The government contributes 23% of the total budget. And the research business profit is about 45%. Tuition fees take over about 12%, but considering the student scholarship, it is only about 3% of the total budget. Research business includes projects given by the government or tasks entrusted to KAIST. The others are dormitory fees, customized academic programs (such as the Samsung Semiconductor Engineering Program), self-reliant operation projects (such as school language centers), admission management fees, facility fees, and school clinics. The donations are not exactly fixed, but this year they account for about 1%. And the rest will be a carryforward budget, about 8%. 

Compared to other universities, the KAIST undergraduate tuition is significantly lower. Does this present any difficulty in budgeting?

There are difficulties. For the students, it becomes a problem if the school raises the tuition fee even a little, but from the school's point of view, it has been frozen for 10 years. The profits are fixed, but expenses keep rising. Just as the minimum wage rises, school labor costs and utilities expenses are rising. Moreover, as we suddenly had to switch to remote lectures last year, it cost about 700 million KRW to pay for the equipment of professors and the establishment of the classrooms, where professors can teach online classes. In addition, we had to pay for quarantine costs to prevent COVID-19. The OLEV circulation bus, which is free for students, costs 1.3 billion KRW a year. We do not have sufficient budget to run the school, but it is extremely hard to get more government contributions. In particular, there is no big fluctuation for the academic business budget and thus it is not so easy to increase it.

What departments or offices receive the most funding and what are the criteria for funding?

Budgets for each department vary because the number of undergraduates and professors in office is different. Since large departments have a large number of professors, they receive more budget. In this year's case, the Graduate School of AI has a lot of research funds because donations have been made to them. However, again, they still have to go through all kinds of complicated stages of meetings and committees to determine which research they will spend the money on.

How is the budget used? What does the school prioritize in budgeting?

The three big categories of expenditures are labor costs, business expenses, and facility expenses. First of all, labor costs are supported by the government, but not fully. Some have to be covered by the school. If the school makes a proposal of how many employees are needed to the government, it confirms the proposal and supports that much budget. The second is business expenses, which includes academic business expenses related to student education, budget for centers (such as satellite centers), start-ups, the specialized research institutes, K-School talent training, research expenses, and the budget for self-reliant operation. After they are categorized, the budget is determined in order of priority. In the case of academic business expenses, there are so many ways to support students, but we can't fund all of them. Therefore, we allocate the budget for the essential projects first, and then the less essential ones. There are lots of buildings that have to be constructed and remodeled. Dormitories are also on the list, but I don't know when they would be remodeled. 

The main principle is that there are government guidelines for budgeting and implementation, which we have to follow. We cannot just hire more employees than the government has approved. If we do so, the government contribution would be lowered and the school would have to pay for them. Also, at the end of the year, we have to report on how much money the school spent. If, for example, the government had given 100 KRW but the school only spent 50 KRW this year, the amount would be reduced next year accordingly. It is important to both receive and spend the government contributions effectively. Since KAIST is a public institution, and since there is a certain amount of government contribution involved, we cannot do anything freely without government approval even if we have money.

Is there anything else you would like to say to the KAIST community?

Throughout the interview, you must have felt that there is nothing that the budget team can do arbitrarily and independently. When we distribute department operating expenses, we have to go through various committees and board of directors. Therefore, unlike what students may think, certain departments, professors, or employees cannot arbitrarily decide on the budget. Also, I would like to say that someday, far in the future, tuition fees will have to be raised. As I mentioned, while expenses increase every year, the income is fixed, making it hard to develop a profit-expenditure plan. The income can't be fixed forever... Also, what I felt when we had to return government contributions last year is that we will try our best not to reduce the budget for student support.