Responsibility Center Management
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
Presentation Outline
1. UNH Overview
2. What is RCM?
3. 5 year review
Current Fund Revenue FY06*
$435.1 Million**
27.0%
Sponsored
Programs &
Federal Aid
$117.8M
28.5%
T uition and Fees,
net of Financial
Aid
$123.9M
5.0%
Gifts &
Endowment
Income
$21.6M
14.2%
State of NH
General
Appropriations
$61.7M
*Includes Durham, M anchester, NHPTV and UNH-Foundation
25.3%
Other Sources,
Primarily
Auxiliaries
$110.1M
**Excludes Loan, Plant, and Endowment &
Similar Funds
State Appropriations for Higher Education
Operations Per Capita
FY 2006
New Hampshire
#50
Colorado #49
Vermont #48
$50
$65
$80
$95
$110
$125
$140
Pe r C apita Appropriation Dollars
Source: Nat ional Cent er f or Public Policy and Higher Educat ion
ht t p:/ / measuringup.highereducat ion.org/
New Hampshire would have to increase it's funding by:
44% to reach #49 (Colorado) and
48% to reach #48 (Vermont)
UNH Resident Cost of Attendance
Tuition/Room/Board/Fees
vs. New England Land Grant Institutions
$19,000
$18,000
UVM
$17,000
UNH
$16,000
UMASS/AMHERST
$15,000
AVERAGE
$14,000
UCONN
$13,000
URI
$12,000
UMAINE
$11,000
$10,000
FY 02
FY 03
FY 04
FY 05
FY 06
UNH Non-Resident Cost of Attendance
Tuition/Room/Board/Fees
vs. New England Land Grant Institutions
$34,000
$32,000
UVM
$30,000
UNH
$28,000
UCONN
$26,000
URI
AVERAGE
$24,000
UMASS/AMHERST
$22,000
UMAINE
$20,000
$18,000
FY 02
FY 03
FY 04
FY 05
FY 06
UNH Durham General Fund Undergraduate Aid
$18,000,000
$16,000,000
$14,000,000
Financial Aid $
$12,000,000
Need Based Financial Aid
Merit Based Financial Aid
$10,000,000
Athletic Scholarships
Cooperative Agreements
$8,000,000
Entitlements
$6,000,000
$4,000,000
$2,000,000
$FY1998
FY1999
FY2000
FY2001
FY2002
Fiscal Year
FY2003
FY2004
FY2005
FY2006
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
Current Fund Expenditures FY06*
$427.6 Million**
15.7%
Fringe Benefits
$67.3M
24.4%
Supplies &
Services
$104.5M
3.5%
Utilities
$14.9M
47.3%
Salaries & Wages
$202.1M
*Durham, Manchester, NHPTV, UNH-Foundation
9.1%
Transfers
$38.8M
**Excludes Unfunded Benefits, Loan, Plant and Endowment & Similar Funds
UNH Durham Energy Costs
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
FY02
FY03
Electricity
Heating Oil #6
Natural Gas
Heating Oil #2
Propane
FY04
(14,8% Grow th)
(18% Grow th)
(38.3% Grow th)
(38.9% Grow th)
(22.9% Grow th)
FY05
FY06
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
Presentation Outline
1. UNH Overview
2. What is RCM?
3. 5 year review
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
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Informs management of financial impact of
decisions
Makes explicit where revenues go and how
they are spent
Promotes accountability at all levels of
management
Institutional Revenue
- Tuition
- Indirect Cost Recov ery
- State Appropriation
Rev enue
Old
Budget
System
University Budget Panel
allocates rev enue to
departments in form of $142
million E&G Budget
Institutional Overhead
(Service Units)
UNH Divisions
- Colleges/Library
- Facilities
- CIS
- Student Affairs
- VP Research
- General Admin
- Academic Affairs
- Research and Public
Serv ice Units
- Auxiliary Operations
Direct Expense
- Payroll
- Support
- Debt serv ice
Department (Direct)
Revenue
- Grant/Contracts
- Restricted
Gifts/Endow ment
- Sales of goods/serv ices
- Fees
Revenue
RCM
Budget
System
- Tuition
- Indirect Cost Recovery
- State Appropriation
Revenue
- Direct Revenue (Grant,
Gift, Sales, Fees, etc.)
Central Budget
Committee
RC Units
- Academic
- Research
- Auxiliary
Direct Expense
- Salaries, Wages & Benefits
- Support
- Debt service
- 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
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
Student and Community Life Units
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Cooperative Extension
Research and Public Service
New Hampshire Public Television
Institute for Earth, Oceans and Space
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Governance, Advancement and
Infrastructure Units
Facilities Services
Computing and Information Services
General Administration
Academic Affairs
Student Affairs
Housing
Hospitality Services
Intercollegiate Athletics
Whittemore Center Arena
RCM Principles
1.
2.
3.
4.
It should be simple to provide easy comprehension and
efficient administration
It should produce results that are widely perceived as
fair
It should encourage behaviors that support the
institution’s mission and academic plan
It should have strong governance and planning
mechanisms
Shared Governance
Central Budget Committee
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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
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
Before and After
RCM implemented on July 1, 2001.
Item
Overhead for Auxiliaries
Academic incentives
Governance
Incentives for good
financial management
Before
Admin Service charge, safety and
security allocation, facilities charge
No incentives for schools and colleges to
pay attention to enrollments, curriculum
and retention of students
No participation in central financial
governance by students, faculty or staff
Few incentives in non auxiliary units to
be efficient or generate new revenues
After
General assessment and facilities
allocation
Direct financial incentives for
enrollments, curriculum and retention
Central Budget Committee – seats for
faculty, students and staff
Incentives for all units to be efficient and
generate new revenues
Presentation Outline
1. Overview
2. What is RCM?
3. 5 year review
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
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
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.
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
Where to get help?
UNH RCM Website – information on 5 year
review, RCM principles, RCM manual, etc –
www.unh.edu/rcm
Call David Proulx at 2-2421 or send me email at
David.Proulx@unh.edu