University of New Hampshire

Responsibility Center Management Update

Overview• We strive to have all financial decisions support the goals laid out in

the Academic Plan

• UNH employs a system of shared financial governance with transparency, accountability and participation being the key ingredients for success.

• Our management structure requires engagement and financial expertise at the local level – budgetary (responsibility center) unit heads and Business Service Center (BSC) Directors (which work in the budgetary units) are key players.

• All funds approach to financial management is necessary at all levels of management

• Central offices serve in an oversight, big picture role

Responsibility Center Management (RCM)

• RCM implemented at UNH on July 1, 2001 after three years of feasibility study

• It was implemented as 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

• RCM has been subject to a formal review, recently completed which has resulted in some changes to the model

• UNH has been approached by many national and international institutions for advice and consult on this subject

RCM Principles

• It should be as simple as possible to promote easy comprehension and efficient administration.

• It should produce results that are widely perceived as fair and in keeping with the core values of the institution.

• It should encourage behaviors on the part of faculty and staff that support the institution’s mission and academic plan.

• It should have strong governance and planning mechanisms in place to ensure that it is wisely used as a tool and does not become an end in itself.

Budgetary/RC Units

Colleges and Related Service Units Research and Public Service Units

College of Life Sciences and Agriculture

College of Liberal Arts College of Engineering and Physical

Sciences Whittemore School of Business and

Economics School of Health and Human Services UNH – Manchester Library

Cooperative Extension Research and Public Service New Hampshire Public Television Institute for Earth, Oceans and Space

Student and Community Life Units Governance, Advancement and Infrastructure Units

Student Affairs Housing Hospitality Services Intercollegiate Athletics Whittemore Center Arena

Facilities Services Computing and Information Services General Administration Academic Affairs

Resource

Flows at

UNH

Resource

Flows at

UNH

Revenue- Tuition- Indirect Cost Recovery- State AppropriationRevenue- Direct Revenue (Grant,Gift, Sales, Fees, etc.)

RC Units- Academic- Research- Auxiliary

Direct Expense- Salaries, Wages & Benefits- Support- Debt service

Central Budget Committee

- Incremental fundingdecisions- $750k University Fundallocation- Service Unit Advisory Boardsubcommittee to reviewService Units if necessary

Institutional Overhead- Facilities- CIS- Student Affairs- VP Research- General Admin- Academic Affairs

RC Unit Resource Flows

• Units receive direct revenues (fees, grants, gifts, etc) as well as applicable allocated revenues (net tuition, state appropriations, indirect cost recovery, Central Budget Committee allocations)

• 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”

RCM 5 Review Results - Summary• RCM has widespread support from the campus community• RCM should be reviewed in 5 years • Central strategic initiatives fund has been established and is funded via

assessments to RC units. • Qualitative and quantitative data suggest that the RCM model has not affected

academic quality, despite widespread perceptions around the University to the contrary.

• There is concern and some evidence that the model provides insufficient financial incentives for outreach and engagement activities. Few mechanisms in place to gather data/facts. Warrants further exploration and attention.

• RCM is perceived as having negatively impacted interdisciplinary collaboration by creating disincentives for faculty and units to foster interdisciplinary teaching and research. Few mechanisms in place to gather data/facts. Warrants further exploration and attention.

• Sufficient unit input exists to central administration for central decisions• A transitional allocation called the Hold Harmless allocation provided to each

unit, will cease to exist in FY08 and be reallocated in the form of a strategic investment by the President.

Benefits of RCM• Improved access to courses

• Strategic and financial planning done at various levels of institution

• Greater awareness of University and local financial status

• Accountability at all levels of UNH

• Increased reserves

• Increased efficiency and productivity

• Consistent quality of services – resources allocated based on activity and demand

More Information

• Please go to RCM Website at www.unh.edu/rcm or contact David Proulx at david.proulx@unh.edu