By Dana Prifti, Media Relations Writing Intern

The RCM Steering Committee has released its initial report and recommendations on how to improve the decentralized budgeting system used at UNH for the past five years.

In its fifth year of implementation, Responsibility Center Management or RCM, is “an effort to provide incentives and empowerment to deans and other managers to achieve missions in a more efficient manner” by giving deans and other unit heads more responsibility and authority for budgetary, spending and resource allocation decisions.

In the new report, the steering committee answers questions about RCM’s effectiveness in terms of academic quality, interdisciplinary activities, research and outreach activities, and centralized academic activities such as UROP, IROP, and Honors programs over the past five years. The report also addresses whether the model needs to be refined in the interest of fairness, simplicity, or strategic direction.

Candace Corvey, former vice president for finance and administration, has stated the importance of the RCM model and the hope that it will expand resource allocation around the university. “Our former centralized, incremental approach to budgeting simply did not work well in situations requiring flexible, creative responses to financial problems,” Corvey said in a previous CJ article. “It tended to favor the status quo and it encouraged short-sighted and inefficient budgetary behavior, a situation that pleased no one.”

In an effort to remedy the ineffectiveness of the centralized budgeting process, RCM was implemented in July 2000. After five years of experience with RCM, the steering committee completed its review and submitted its report to the Central Budget Committee (CBC). The CBC will consult with President Ann Weaver Hart about proposed changes to the RCM system. A final set of recommendations from Hart is expected in late February or early March. To be effective in its goals, university officials have said RCM must provide financial incentives at a local level, be fairly applied to all units, be as simple as possible to apply and understand, and have credible governance mechanisms.

In the area of state allocations, the committee recommends that the state allocate funds based on all faculty salaries, including extension, research, and clinical faculty and graduate stipends at different weighting levels based on funding. In terms of indirect cost recovery, the basic recommendation is to distribute indirect cost recovery revenues among units, principal investigators, central administration, the graduate school and the library. The committee also believes it would be best to keep real-time distribution methodology to each home unit and allocate summer graduate tuition to instructional unit. There should be no weighting for graduate net tuition.

In terms of undergraduate tuition, the committee recommends keeping existing credit hour weightings and two-year averaging, maintaining All tuition revenue flows to instructional units, and allocating all intercollege (INCO) net tuition to units of instruction instead of sending it to the general category of Academic Affairs.

For facilities, the committee recommends to keep existing net square footage (NSF) and Business Affairs allocation methodologies, but reallocate 10 percent of the institutional repair and renovation budget to all units including auxiliaries and NHPTV for campus “greater good” projects. Previous “greater good” projects include master plan funding, fire department repairs, and the Compressed Natural Gas station.

Assessments, used to allocate costs of central administrative units including such offices as the President’s Office, Registrar’s Office, Admissions, University Communications, Human Resources, Office for Sponsored Research among others, will be allocated to all RC units on the basis of nongrant revenues and personnel expenditures not charged to grants.

The steering committee also made recommendations regarding how units would be “transitioned” from the current model to the proposed model. The steering committee recommends that all units begin FY07 in a resource neutral position as compared to the position they would have started using the current model.

The report also addresses the existing quality and governance standards, and examines the effectiveness and availability of the model and committees. According the report, data indicates that RCM has not negatively 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. The committee decided that there was not enough evidence to judge whether or not this was true and that it warranted further attention.

According to the report, RCM is perceived as having negatively impacted interdisciplinary collaboration by creating disincentives for faculty and units to foster interdisciplinary teaching and research. However, the committee determined that there were not enough mechanisms in place to ascertain the validity of this concern and that it, too, deserves further exploration.

The RCM Steering committee report of recommendations to the CBC can be found online at: http://www.unh.edu/rcm/steeringreport.htm.