1. Responsibility Centered Management APAC Presentation August 26, 2013 Jim Florian, AVP Provost Office

2. Do you have a formula yet? Questions People Ask When will you be done? How much will we make?

3. The Assignment From President Hart

4. Principles of RCM from President Hart’s December 12, 2012 Letter

5. Encouragement and reward for revenue generation and cost effectiveness;

6. Principles of RCM from President Hart’s December 12, 2012 Letter Encouragement and reward for revenue generation and cost effectiveness; Alignment of authority and accountability at the local (unit) level;

7. Principles of RCM from President Hart’s December 12, 2012 Letter Encouragement and reward for revenue generation and cost effectiveness; Alignment of authority and accountability at the local (unit) level; Greater transparency regarding sources and uses of resources;

8. Principles of RCM from President Hart’s December 12, 2012 Letter Encouragement and reward for revenue generation and cost effectiveness; Alignment of authority and accountability at the local (unit) level; Greater transparency regarding sources and uses of resources; Greater flexibility — improved responsiveness to change;

9. Principles of RCM from President Hart’s December 12, 2012 Letter Encouragement and reward for revenue generation and cost effectiveness; Alignment of authority and accountability at the local (unit) level; Greater transparency regarding sources and uses of resources; Greater flexibility — improved responsiveness to change; Enhanced ability to plan with a better sense of future resource flows.

10. The Process

11. Steering Committee Subcommittees Undergraduate Tuition Graduate Tuition Differential Tuition and Summer Session Sponsored Activity and IDC Outreach and Online Auxiliaries and Student Fees Facilities and Space Institutional and Administrative Costs State General Fund Appropriation

12. Guiding Principles Strategic Plan Incentives Negative Outcomes Balance Transparency Matching Simplicity Predictability Adaptability Central Funds Investment Data Risk Communication Leadership Governance

13. Responsibility Centered Unit (RCU) Responsible for a particular function(s) within the university Under the authority of only one individual (i.e. Dean, VP) Revenue Units - College and Related Auxiliaries Administrative and Support Units - Administration Institutional Support Research and Public Service Student Support Facilities - Facilities Units Facilities Cost

14. The Fundamentals of RCM

15. RCM is simply a tool to be used by institutional and academic leaders. It does not replace the sound judgment and leadership required to accomplish the institution’s strategic goals.

16. RCM does not add dollars into the system or create new costs. It merely assigns revenues and expenses to Responsibility Center Units (RCUs) according to new algorithms.

17. At implementation, an RCU’s net spending authority does not change. To the extent that the new algorithms change the bottom line for a Unit, a balancing adjustment will be provided so that the net for the RCU remains unchanged at initial implementation.

18. Going forward, each RC Unit will directly benefit from any increase in revenue generation and/or cost efficiencies it achieves. An RCU will be able to see on RCM reports the total costs both direct and indirect that are attributable to their unit and will see the revenues that are attributed toward their unit.

19. In addition to attributable costs, revenue RCU’s will contribute to a strategic allocation fund which will enable University administration to direct funds to areas of strategic priority. The uses of this fund will be reported to the community on a regular basis.

20. The Timeline

21. Subcommittees Recommendations Fall Steering Committee Preliminary Recommendation Late Fall Modeling and Testing of Recommendations Early Spring Steering Committee Recommendation to President Hart Spring

22. http://rcm.arizona.edu