Financial Planning & BudgetsApril 21, 2015

Responsibility Centered Management (RCM)

RCM is a decentralized, incentive-based budget

model. It gives account directors or center

managers greater flexibility in and responsibility

for generating income and managing expenses. It

provides greater budget authority at lower levels

of the university administration and decentralizes

key aspects of the university’s budget process

The university’s RCM policies can be found on

Financial Planning & Budget’s team site in the

RCM Budget Model folder

RCM Budget Model

» Revenue» Tuition – all tuition generated from courses delivered on-campus, online

and through Global Campus sites outside of Mount Pleasant is recognized where earned, within the colleges (e.g. Accounting in CBA)

» State Appropriations – funds allocated to the colleges/departments based on their 3 year rolling average percentage of total University semester credit hours (SCH)

» Other Revenue - Revenue recognized in department as earned. Examples are fees, room and board, service fees, material reimbursements, etc.

CMU’s RCM Budget Model

» Expenses» Personnel Expenses – wages and benefits for positions within in the

center where the worked is performed» Other Compensation – compensation outside of regular wages, e.g.,

overtime, shift differential, higher classification pay and temporary employee wages

» Supplies and Equipment – supplies, equipment and contracted services

» Transfers (In or Out)» Transfers – movement of funds from one cost center to another to

recognized expenses/revenues in the proper cost center. Also includes intra-college subsidies

CMU’s RCM Budget Model (Cont.)

» Operating Assessment – a proportional fee is assessed to the colleges on their actual tuition and state appropriation revenues. The assessment is used to fund the university service centers (e.g., office of scholarships and financial aid, payroll and registrars office, etc.). The assessment percentage applied varies by college

» The operating assessment percentage is adjusted in the following fiscal year as base budget requests are approved

» Surplus operating assessment funds remain in an account to be used for future fluctuations in enrollment and at the discretion of the President and the Cabinet

CMU’s RCM Budget Model (Cont.)

» Carry Forward Funds – funds remaining at the fiscal year end. Remaining funds carry forward according to the appropriate Division’s guidelines and RCM policy #32

» Carry Forward funds are not taxed and carry forward 100% from one year to the next at the divisional/departmental level

» Each Dean/VP has the authority to decide whether an individual account receives the carry forward balance in the new fiscal year

» The President and Vice Presidents have the authority to redirect any carry forward balances within their divisions

CMU’s RCM Budget Model (Cont.)

» Feel free to contact us at any time with questions» Email – fpb@cmich.edu

» Telephone – 989-774-7378

» Web-Site – www.cmich.edu/budget

Financial Planning and Budgets