Learning About RCM
There are many resources available for faculty and staff members to learn more about RCM. Below are some of the commonly asked questions about RCM.
What is RCM? Why did Kent State choose RCM? RCM is a budget allocation model. The University adopted this budget model beginning July 1, 2009 so that resources will flow to areas experiencing growth and encourage entrepreneurial activities, such as new programs or services, enabling us to provide higher quality services.
What do I need to know about RCM? How does RCM affect my department? RCM fosters net budget growth and this is accomplished by either growing revenues or reducing expenses. All employees, regardless of department, need to contribute to the overarching goals of the university. RCM will help improve the quality of the university in that budget dollars will be more readily available to invest in the academic mission.
Where do I get financial and enrollment information? In this website you will find a section on RCM resources. In this section you will find where you can locate financial and enrollment information. For the link to that section click .
How is revenue calculated? The actual revenue earned by the responsibility center is a formula that considers multiple revenue streams and a two-year average for both tuition and state share of instruction. The RCM manual provides details on how revenue is calculated and the link to that section is here.
How can I estimate the incremental revenue impact from a new course? To help determine revenue that a new course will earn, a tool has been developed. You will be required to estimate the potential enrollment and the tool will calculate a “break-even” analysis. The tool can be accessed here.
When will I find out the actual revenue numbers of each semester? Colleges will be given updates on their actual revenues periodically throughout the academic year.
How can I suggest ideas for budgeting, using RCM, and other models? All suggestions can be sent directly to Wayne Schneider, Director, RPIE (phone: 330-672-8225 or email@example.com) or on the home page of this website.
How long will Kent State operate under RCM budgeting? The University is expected to operate according to this model for the foreseeable future. The RCM budget process will be continually reviewed by the Executive Officers and by FaSBAC.
What is the 80%/20% split? The 80%/20% split refers to how revenues are distributed. 80% of the revenues are based upon the course that the student is taking. 20% of the revenues are distributed to the students’ major. For a more detailed explanation please click here.
What assumptions are used to guide the yearly preliminary budgets? The preliminary budgets are based upon enrollment projections from each of the colleges. These enrollment projections are the foundation for building the budget.
Where can I get training on RCM? RCM training can be customized. Individuals wanting customized training for their departments should contact Wayne Schneider (firstname.lastname@example.org).
What is included in overhead? How is overhead assigned to RC’s? All service and support areas are in the overhead allocation. This would include areas such as, admissions, registrar, auditing, etc. Overhead is distributed to the responsibility centers based upon their portion of revenues. For a detailed explanation of the overhead allocation, please click here.
Can colleges opt out of RCM? No. RCM applies to the entire University—all eight campuses.
Can units opt out of the overhead allocation by not using University services? No. The service and support areas will undergo periodic review to ensure that they are appropriately serving the university and the responsibility centers in the most financially effective manner.
Do other higher education institutions use RCM? Major institutions have adopted the RCM model. Some of these institutions include Ohio State University, Indiana University and Iowa State University. A listing of all the other higher education institutions using RCM can be found by clicking here. There is no single way of implementing RCM, as you look through the documents from other universities, you’ll see how each institution has adapted RCM.
How is RCM tied to strategic planning and decision making? Budget dollars are directly tied to areas of growth enabling investment. Dollars, through subvention and investment funding, are available to help fund new strategic initiatives. Decision-making is clearer under RCM because all aspect of the financial performance is known by all decision makers.
How will we evaluate the success of RCM? An ongoing evaluation of RCM is conducted by the FaSBAC governance group. For a description of FaSBAC, please click here.
What is SSI? SSI refers to the State Share of Instruction. This is the money that comes from the state to support the costs of higher education. For an explanation of how this revenue is allocated to the responsibility centers, please click here.
What is the Telecom pool and what does it take care of in the budget? The Telecom pool refers to how the University handles phone and internet services throughout the university. In general, all these costs are pooled centrally and are expensed to the units based upon the proportion of their revenue. For a more detailed explanation of this, please click here.
How are employee fee waivers handled under RCM? The costs for all fee waivers are pooled centrally and are expenses to the units based upon the proportion of their revenue. For a more detailed explanation of this, please click here.
Why don’t RC’s get 100% of tuition money that students pay? Tuition covers many centrally funded expenses, such as scholarships and bad debt. Tuition is adjusted for these expenses so that the actual SCH rate calculated is different from our tuition rate.
Will RCM save money or prevent layoffs? The goal of RCM is to realize net revenue growth. This model places the University in a stronger financial position provided that each of the responsibility centers focus on how to generate revenue through increased enrollment, retention and decreasing expenses.
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