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Responsibility Centered Management

This guide serves as a collection point for information pertaining to Responsibility Centered Management.

College & Department Perspectives

Bepko, G. L. (1990). An experiment in decentralized management. AGB Reports 32, (6), 27-30.
    Institutions are turning to responsibility-centered budgeting to instill campuswide fiscal responsibility. The approach places budget authority within individual academic units and allows decision makers to see their program's share of overhead expenses. The University of Indiana and Purdue University at Indianapolis have undertaken a joint venture using the system.

Hollihan, T. A. (1993). Revenue centered budgeting at USC: The implications for communication studies. Journal of the Association for Communication Administration (JACA), 1, 11-15.
    Describes the system of revenue-centered budgeting at the University of Southern California and how it has benefited some academic units and penalized others.

Linn, M. (2007). Budget systems used in allocating resources to libraries. Bottom Line: Managing Library Finances 20, (1), 20-29.
    Purpose - The purpose of this article is to provide information about many different budgeting systems that are used to allocate resources to libraries. Design/methodology/approach - A number of methods of resource allocation are reviewed. The types of budgeting covered are incremental line-item, formula, mathematical, zero-based, program (including planning, programming, and budgeting systems), performance-based, responsibility center, block-incremental, and initiative-based. Findings - There are numerous types of budgeting systems and each of them functions differently. Research limitations/implications - There are many variations of each of these basic types of budgeting systems. As a result, this article reviews the most prominent ones. Practical implications - This is a very useful source of finding out the fundamentals of each of the basic kinds of budgeting systems. In addition, the article gives many references for finding out more about each of these methods. Originality/value - This paper covers the various types of budgeting systems. This allows librarians to better understand the budgeting system they deal with so that they might better work with it to maximize their library's funding. [ABSTRACT FROM AUTHOR]
Copyright of Bottom Line: Managing Library Finances is the property of Emerald Publishing and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.

Moloney, D. P. & Grotevant, S. M. (1997). Collegiate and departmental performance indicators: The measures that matter! AIR 1997 annual forum paper. Annual Forum of the Association for Institutional Research. Orlando, FL. (ED410898). ERIC.
    In response to changing management and budgetary strategies that have been driving decision making to the lowest administrative levels, institutional researchers have been attempting to identify indicators which can be used to evaluate institutional performance and progress. This paper reviews efforts to introduce departmental operational performance indicators at the University of Minnesota. A decision support schematic illustrates the instructional resource management tool that was developed. The diagram shows the relationships of the broad indicators, such as demand, fiscality, and productivity, to each other and to specific lower-level measures such as tuition revenue management, instructional cost management, curriculum management, enrollment and tuition management, and faculty course management. Two other programs, a "U2000 critical measures" process and incentives for managed growth, are also discussed. The former, an attempt to demonstrate to faculty how daily planning and operational decisions affect overall institutional goals, was judged to have failed. The initial attempts to establish an "incentives for managed growth" program (also termed responsibility-centered management), a financial strategy that emphasizes entrepreneurial activities and encourages decision making at the lowest administrative levels, were disappointing, and few of the university's departments were deemed able to use this strategy.

Neal, J. G. & Smith, L. (1995). Responsibility center management and the university library. The Bottom Line 8, (4), 17-20.
    Responsibility center management (RCM) is a new fiscal management system which has been introduced at several American universities. It seeks to link academic responsibility and budgetary authority and to promote innovation, entre-preneurship, and cost containment. Describes the implementation of RCM at Indiana University with a focus on the impact on and role of academic support units such as the library.

Rooney, P. M., et al. (1998). A program cost study: Determining the revenues and expenditures associated with instruction, research, and service programs. AIR 1998 annual forum paper. Annual Forum of the Association for Institutional Research Minneapolis, MN. (ED422823). ERIC.
    A program cost study was conducted at a large midwestern university to determine department-level expenses and revenues associated with the mission-critical activities of instruction, research, and service. The study (or program) is based on a model for allocating costs, called responsibility centered management, that has been used for nearly a decade to allocate campus revenues and expenses to academic units, and an instructional effort report/capacity model used to examine total faculty workloads. The study/program was conducted at a large, midwestern, urban public university and provides campus, school, and department-level cost information for teaching, research, and service activities. The study also allocates all levels of overhead (departmental, school, and central administration) to the foregoing activities within each academic unit. Direct and overhead costs can be evaluated separately or together to formulate plans and budgets. The information generated by this model is used with indicators of program quality and accessibility as an integral part of the campus planning and budgeting process. (Contains 26 references.) 

Smolka, A. J., Halushka, P. V., & Garrett-Mayer, E. (2015). "The faculty costs to educate a biomedical sciences graduate student." CBE - Life Sciences Education, 14(1), 1-8.
    Academic medical centers nationwide face numerous fiscal challenges resulting from implementation of restructured healthcare delivery models, contracting state support for higher education, and increased competition for federal and other sources of biomedical research funding. In pursuing greater accountability and transparency in its fiscal operations, the Medical University of South Carolina (MUSC) has implemented a responsibility centers management budgetary model, which requires all MUSC colleges to be eventually self-sustaining financially. Graduate schools in the biomedical sciences are particularly vulnerable in the face of these challenges, depending traditionally as they do on financial support from training grant tuition, occasional medical school tuition and medical practice plan revenues, graduate college--based revenue-generating programs, and faculty payment of PhD tuition. The revenue streams are often insufficient to support PhD training programs, and supplemental financial support is required from the institution. In the context of a college of graduate studies, estimates of the cost of educating a graduate student become a significant necessity. This study presents a readily applicable model of empirically estimating the faculty salary costs that may provide a basis for budgetary planning that will help to sustain a biomedical sciences graduate school's commitment to its teaching, research, and service mission goals. The authors have included a supplemental materials article.

Stocum, D. L. & Rooney, P. M. (1997). Responding to resource constraints A departmentally based system of responsibility center management. Change: The Magazine of Higher Learning 29, (5), 50-57.
    A number of universities have implemented Responsibility Center Management (RCM), a financial management system that decentralizes fiscal authority and responsibility. RCM gives significant financial decision-making powers to individual academic units in a university, and the income, growth, and development of these units depends on their ability to regulate costs while providing high-quality, good-value academic programs. An important feature of RCM is the flexibility it affords deans in moving funds from one category to another, according to need. If RCM is left to operate without limits, however, academic programs can be driven purely by financial entrepreneurship. The history of a departmentally based system of RCM at Indiana University-Purdue University Indianapolis is discussed.

Varlotta, L. E. (2010). Becoming a leader in university budgeting. New Directions for Student Services, (129), 5-20.
    This chapter explains what senior student affairs officers (SSAOs) and those aspiring to the position should know and do in terms of budgeting to make the transition from division to university leadership. Before SSAOs can help lead any university-wide budget process, particularly ones that unfold amid fiscal decline, they must master divisional practices as a foundation. Toward that end, this chapter first reviews the steps that managing and aspiring SSAOs should consider when preparing divisional budgets: initiating and maintaining a meaningful strategic planning process, knowing intimately each of the budgets that constitute their overall portfolio, and meticulously responding to and involving others in the budget call or exercise. Once they have their own shop in shape, successful SSAOs move beyond division-level budgeting to hone their macrolevel strategic and operational planning skills. These skills, reviewed next, include developing a refined understanding of the various roles of the university budget and both designing and marshaling data-driven supporting materials to actualize those roles. In addition to examining the potential functions of the budget, budget-savvy SSAOs must study viable budget models. Hence, this chapter ends by reviewing and then delineating the advantages and challenges associated with four budget models--incremental and decremental, zero based, responsibility centered, and initiative based--commonly used in institutions of higher learning.