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RCM, Sweeping, and other mysteries

Over the past three weeks everyone left behind on summer break has been on a steady diet of budgeting. But no 2014 budget banquet can be complete without a healthy serving of Responsibility Centered management. RCM is either a fiscal Bogeyman or fiscal Deliverer.  It is neither.

It's just a way of running an organization that does not have the luxury of state funding. For those of you old enough to remember when the legislature's toughest decision was how to spend the $600 million budget surplus (there really was a time...check out this article from 1990), we used to get general state support from the state. Almost without asking. It arrived as general student suppor--and we spent it. 

I like to think of this as the Irrigation Line approach to budgeting. Money arrived from high on a mountain, drained into administrative offices, and was spread  upon thirsty departments. Budgeting in the 1990s. Sweet. (Yes, this is an over-simplification, but stay with me.)

It would be an understatement to say that it is no longer practical or possible to just wait for state support and then  spend it on what we need. After two consecutive tuition freezes and declining or flat budgets for four years, it's pretty clear to everyone who is awake that we have to figure out ways to make the money we need to educate students. 

Enter the Bogeyman. RCM decentralizes management--including most fiscal management-- to colleges, or perhaps better to say RCM centralizes management in colleges. Colleges keep the money they earn and pay their own bills--for whatever services they need, from teaching to accounting to advising and fundraising.

(Long aside: That's right - you keep what you earn, including 148 (summer school) money. Contrary to rumor, these funds have not been swept. There is no sweeping. Funds are, however, organized by college rather than department funds. This is consistent with RCM philosophy to empower colleges to act in their interests and the interests of their students. If your camp or summer school has always generated money you depended on for goods and services, or professional development or whatever, it still can. Talk to your dean.)

More on RCM coming, but first I have to Ask David M or Jesse how to post a PPT slide to this feed.







RCM promotes
Entrepreneurial behavior - units keep what they earn
Innovation – units are free to do what works
Lean operations – units pay for overhead they use

Monday, July 7, 2014 - 18:30

Questions? Comments? Email Linda Schactler

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