1. David Proulx, Assistant Vice President for Financial Planning and Budgeting EMail: david.proulx@unh.edu Budget Office Website: http://www.unh.edu/budget RCM Website: http://www.unh.edu/rcm Responsibility Center Management

2. Presentation Outline 1. UNH Overview 2. What is RCM? 3. 5 year review

8. Revenue Summary $435 million current fund revenues Research, net tuition and auxiliary revenue greatest sources Major challenges in state appropriation revenues, financial aid and grant funding Great dependence on out of state students

11. Expense Summary Personnel – largest component of expense Medical benefit cost growing significantly Energy costs growing significantly Behind on renewal and replacement of physical plant Growth rate on general fund revenue – 4% and expense – 4.5%. Need to address structural issue

12. Presentation Outline 1. UNH Overview 2. What is RCM? 3. 5 year review

13. What is RCM? Responsibility Center Management A tool to help UNH manage its resources in a manner to meet the goals outlined in the University’s Academic Plan Informs management of financial impact of decisions Makes explicit where revenues go and how they are spent Promotes accountability at all levels of management

14. OldBudgetSystemOldBudgetSystem

15. RCMBudgetSystemRCMBudgetSystem Revenue - Tuition - Indirect Cost Recovery - State Appropriation Revenue - Direct Revenue (Grant, Gift, Sales, Fees, etc.) RC Units - Academic - Research - Auxiliary Direct Expense - Salaries, Wages & Benefits - Support - Debt service Central Budget Committee - Incremental funding decisions - $700k University Fund allocation - Service Unit Advisory Board subcommittee to review Service Units if necessary Institutional Overhead - Facilities - CIS - Student Affairs - VP Research - General Admin - Academic Affairs

16. RC Units

17. RCM Principles 1. 1.It should be simple to provide easy comprehension and efficient administration 2. 2.It should produce results that are widely perceived as fair 3. 3.It should encourage behaviors that support the institution’s mission and academic plan 4. 4.It should have strong governance and planning mechanisms

18. Shared Governance Central Budget Committee The governing group on budget policy and financial planning for the campus community. Responsibilities include oversight of RCM, review of internal fees, oversight of assessment rates and central service budgets, oversight of facilities chargeout rates, and advising President on significant budgetary/financial issues. Comprised of President (Chair), Vice Presidents, 2 Deans, 4 Faculty, 2 RC Unit Directors, Staff rep, Student Treasurer, Graduate Student Organization rep

19. Unit Financial Structure Units receive direct revenues (fees, grants, gifts, etc) as well as applicable allocated revenues (net tuition, state appropriations, indirect cost recovery, CBC allocations and hold harmless) Units are responsible for direct expenses (salaries, wages, fringe benefits, support) as well as indirect expenses (facilities, general and academic overhead) Unspent funds at end of year are allowed to drop to a unit “reserve” Most auxiliary operations (MUB, Campus Rec, Health Services, Counseling Center, Housing and Dining) have operated in a RCM type system prior to campus wide implementation of RCM

20. Before and After RCM implemented on July 1, 2001.

21. Presentation Outline 1. Overview 2.What is RCM? 3. 5 year review

22. Purpose Understand impact of RCM over the past 5 years Align RCM allocation methodologies to goals outlined in Academic Plan Provide opportunity for community to be informed and participate in discussions

23. Timeline Dec. 2004 – April 2005 – open discussions with all RC units on RCM April 2005 – August 2005 – Data accumulation and review structure development August 2005 – January 2006 – Subcommittee review and Steering Committee recommendations February 2006 – Central Budget Committee Review and President decision July 1, 2006 – Implementation of changes

24. Participation Steering Committee and 7 subcommittees – 58 total members including 2 students on Steering Committee 17 meetings and 2 open forums for information gathering/feedback. 2 open forums for initial recommendations.

25. Review Results RCM works well for UNH and should remain as budgeting tool Enhance communications in some areas Allocation formulas changed to create better incentives/more alignment with Academic Plan (impact in FY07 of changes was zero – offset by hold harmless allocation) Elimination of hold harmless allocation and review of assessment funded units RCM should be reviewed again in FY11

26. Where to get help? UNH RCM Website – information on 5 year review, RCM principles, RCM manual, etc – www.unh.edu/rcm www.unh.edu/rcm Call David Proulx at 2-2421 or send me email at David.Proulx@unh.edu David.Proulx@unh.edu