For those who are curious about what the UA's new budget model will look like or how it's being developed, new resources are now available to help increase understanding.
The UA is moving toward a Responsibility Centered Management budget model that will make the University's budget process more transparent, more decentralized and more closely aligned with the goals of the UA's Never Settle strategic academic and business plan. RCM is expected to replace the University's current incremental budget process starting in fiscal year 2016. This year's budget was based on the incremental system and unit activity this year will affect next year's budget under RCM.
Videos featuring members of the RCM Steering Committee, which is charged with developing recommendations for the RCM budget model, are now available here. The videos provide an overview of RCM and explanations of its components and how it will support Never Settle.
RCM is a decentralized approach to budgeting that specifies how revenues are allocated to units and incentivizes revenue-generating activities. This model emphasizes transparency and accountability to encourage units to make good decisions that benefit not only their unit, but the entire University.
Ron Marx, dean of the College of Education and member of the steering committee, led a discussion on RCM during Monday's Faculty Senate meeting. He said that RCM budget models are becoming more and more common for higher education institutions across the country.
"Many, many research universities – many like us – have been doing this for many years," Marx said.
Marx explained the RCM budget model's key principles will allow for greater flexibility while rewarding revenue generation and cost effectiveness.
Designed with an emphasis on transparency, RCM will also align authority and accountability at the local unit level; provide greater transparency regarding use of resources; enable greater flexibility and responsiveness to change; and provide enhanced ability to plan with a better sense of future resource flows.
After working over the summer, the steering committee and its nine subcommittees developed a draft budget forecasting model. This predictive model is currently being shared with deans, assistant and associate deans, vice presidents and Responsibility Unit Business Officers, representatives from each of the colleges and units that have been identified as Responsibility Centered Units within RCM. The model allows them to see how changes in one area affect other areas.
"We now have a working model of what RCM will look like," Marx said. "I think this is a very honorable process that we've gone through."
Feedback will be gathered from those who test the predictive model to help identify ways it can be improved and refined.
Forums for campus are also being planned for the near future. The final RCM proposal will be submitted to President Ann Weaver Hart in the spring.
Marx said that campus support will be crucial to RCM's success as the implementation process continues.
"RCM is not arithmetic; it's calculus," Marx said. "We're going to figure out a way to bridge from this year to next year and the year after that."