Dean s RCM Workshops January 2015

Transcription

1 Dean s RCM Workshops January 2015

2 Agenda General overview of RCM Overview of the model and college budget composition Education s view of RCM Engineering s view of RCM Group Activity: Scenarios 2

3 General Overview of RCM 3

4 RCM Basics How is an RCM budget different than the current budget system? Incremental Activity Based Budgeting Revenue associated with tuition flows to colleges Expenses associated with activity flows to colleges 4

5 The Fundamentals of RCM Values Most importantly: Decision making should incentivize higher quality programs, innovation, flexibility, efficiency, and equitable resource allocation. As measured through mission-driven metrics: Completion rates, degrees awarded, time to degree, faculty and student productivity, student placements, etc. Success of College Management under RCM is evaluated here 5

6 Guiding Principles Governance Strategic Plan Incentives Minimize Negative Outcomes Balance RCUs & UA Transparency Matching Revenues to Associated Costs Simplicity Predictability Adaptability Central Funds Investment Data Risk Communication Leadership 6

7 What is an RCU? Responsibility Center Units are either: Revenue Units or Service Center Units Revenue Units Colleges Auxiliary Units

8 What is an RCU? Responsibility Center Units are either: Revenue Units or Support Center Units Support Center Units Research and Public Service Administration & Institutional Support Student Support Facilities

9 Overview of the RCM Model and College Budget Composition 9

10 Current Incremental Budget Process Annual Marginal Changes in Funding: State Funds Tuition Administrative Service Charge Indirect Cost Recovery (75%) Central Administration Marginal Changes to Base Budgets Colleges Budget Base Support Units Budget Base Facilities Cost Budget 10

11 RCM Budget Process Support Units and Institutional Costs -Subventions -Mandatory Fees -Other Misc. Fees -Auxiliaries -Philanthropy Subventions UA Budget - State General Funds - Tuition - Differential Tuition - Program Fees - F&A Recovery (100% less VPR/ORD costs and Research Investments) - Strategic Investments Allocations Subventions Strategic Investments Strategic Fund & Support Unit Cost Allocations Colleges -RCM Allocations -Subventions -Sponsored Activity -Course fees -Outreach -Summer Session -Philanthropy -Sales and Service Administrative Service Charge Auxiliaries Facilities Cost Assessed based on Net Assignable Square Footage 11

12 Transition of Budgets to RCM "Old" Budget System RCM Direct revenues $ 1,000,000 $ 1,000,000 UA budget allocation $ 19,000,000 RCM Allocated revenue Subvention Total revenues $ 20,000,000 $ $ $ 16,000,000 13,000,000 30,000,000 Direct expenditures $ 20,000,000 $ 20,000,000 Allocated expenditures $ 10,000,000 Total Expenditures $ 20,000,000 $ 30,000,000 Net $ 0 $ 0 12

13 College Revenue RCM Allocation Undergraduate Tuition Graduate Tuition Differential Tuition Program Fees Revenue associated with Sponsored Activity: F&A (ICR) Subvention Direct Revenue Summer Session Outreach College/AI&SS Philanthropy Sales & Service Auxiliaries

14 Model Assumptions: Revenue Undergraduate revenue is pooled and allocated to colleges: 75% SCH / 25% Majors Graduate revenue is allocated by student to colleges: 75% Majors / 25% SCH GIDP Students allocated 100% SCH Graduate allocations are not weighted (as a consequence of being done on a student-by-student basis) F&A Allocated 100% to colleges Less proportionate share of SVPR operations Less proportionate share of Research Investment Fund

15 RCM Revenue Components 15

16 RCM Revenue Allocations 16

17 Components of the RCM Model Expenses Cost Associated with Sponsored Activity Sponsored Projects Services Contracting & Research Services Research Compliance Units Cost Associated with Space Facilities Management

18 Expense Components continued: Costs associated with Administration & Institutional Support Administration President s Office Academic Affairs & Provost University Information and Technology Services (UITS) Human Resources University Libraries Business Affairs (Non-Facility Related) Arizona Health Sciences Center (Administration) Distributed Education (Outreach, UA South, Global Initiatives) Institutional Support University Insurance Bank Fees Strategic Investment Fund

19 Model Assumptions: Expense All costs of running the university are billed to colleges Space is billed to colleges at a single rate based on net assigned square footage of the college

20 RCM Expense Components 20

21 RCM Expense Allocation 21

22 College Budget Composition: EDUC 22

23 College Budget Composition: ENGR 23

24 Education s View of RCM 24

25 Thousands Millions Education s View of RCM Long-term UG Tuition Flow (assuming 1% constant growth for all of Campus) College of Education College of Science $10,000 $95 $9,500 $90 $9,000 $85 $8,500 $80 $8,000 $75 $7,500 $70 $7,000 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 $65 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 UA/COE 1% COE -2% COE +2% COE +3% UA/COS 1% COS - 2% COS +2% COS +3%

26 Millions Education s View of RCM Growing at or above UA Campus is crucial to maintaining UG tuition growth $10 By FY2019 $5 $- $(5) $(10) COE Constant 3% growth will yield $0.9 million over FY2014 COS Constant 3% growth will yield $8.6 million over FY2014 $(15) FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 UA 1% COE -2% COE +2% COE +3% COS - 2% COS +2% COS +3%

27 Engineering s View of RCM 27

28 Market Position/Growth Potential Undergraduate Evaluation of Environmental Engineering degree Two new hires: Recruiter and Advisor Graduate Tuition Discount Model Sponsored Activity Focus on Full F&A Projects (Increase effective rate) 28

29 Group Activity: Scenarios 29

30 Draft Forecasting Model 30

31 Draft Forecasting Model The model has three main components: The Assumptions Section where the assumptions are have been set; The Input Variables Section where RCUs input their forecasts which the model uses to forecast revenues, cost allocations and distributions; The Reports Section that displays the results of the assumptions and inputs. 31

32 Draft Forecasting Model The Input Variables Section Each of the links listed in the Input Variables Section will take the user to an area of the model where the relevant data needs to be entered for the listed component The input area is shaded and updates the numbers in the section either directly above the input area or to the left of the area 32

33 Draft Forecasting Model The Reports Section The Reports Section provides links to reports that will display the results 33

34 34