1. Responsibility Centered Management (RCM): A New Budget Model
Lisa N. Rulney
Assistant Dean, Finance & Administration

2. RCM Basics
How is an RCM budget different than the current budget system?
Incremental
Activity Based Budgeting
Revenue associated with tuition flows to colleges
Expenses associated with activity flows to colleges

3. Has RCM worked at other institutions?
Penn is credited with being the first institution to adopt RCM in 1974

4. What is an RCU? Responsibility Center Units are either:
Revenue Units or Service Center Units
Revenue Units
Colleges
Auxiliary Units

5. What is an RCU? Responsibility Center Units are either:
Revenue Units or Service Center Units
Service Center Units
Research and Public Service
Administration & Institutional Support
Student Support
Facilities

6. Components of an RCM Model
Revenue
Tuition Revenue
Undergraduate
Graduate
Differential Tuition
Program Fees
Summer Session
Outreach College
State Appropriation
Revenue associated with Sponsored Activity: Indirect Cost Return

7. Components of an RCM Model
Expenses
Cost Associated with Sponsored Activity
Sponsored Projects Services
Office of Research and Contract Analysis
Research Compliance Units
Cost Associated with Space
Facilities Management

8. Expense Components continued:
Costs associated with Administration & Institutional Support
Administration
President’s Office
Academic Affairs & Provost
University Information and Technology Services (UITS)
Human Resources
University Libraries
Business Affairs (Non-Facility Related)
Arizona Health Sciences Center (Administration)
Distributed Education (Outreach, UA South)
Institutional Support
University Insurance
Bank Fees
Strategic Investment Fund

9. Expense Allocation Methods:
Assessment Based Allocation
Revenue Based Allocation
Expenditure Based Allocation

10. Frequently Asked Questions about RCM
Will RCM create efficiency?
How much revenue will we receive?
How much will we be taxed?
How will RCM be implemented by colleges?
What is the formula?

11. To Implement or Not? Is the state cutting the budget?
Is enrollment decreasing?
Are you implementing new enterprise-wide systems?
Do you have accurate data?

12. Advice for Success Learn from the Past Avoid Groupthink
Research recommendations from other institution’s experience
Avoid Groupthink
Communicate, Communicate, Communicate
Seek External Advice
Timing

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

14. How can we prepare for RCM?
Key to Success:
Alignment of skills with job responsibilities
Remember the components of the model:
Tuition (All Types)
State Appropriation
Revenue associated with Sponsored Activity
Cost associated with Sponsored Activity
Cost associated with Space
Cost associated with Administration, Institutional Support, and Strategic Investments
Know Your Data!
Academic
Research
Space
Training

15. Resources http://rcm.arizona.edu/
Responsibility Center Management, A Guide to Balancing Academic Entrepreneurship with Fiscal Responsibility
John R. Curry, Andrew L. Laws, Jon C. Strauss

16. Questions?