SU seeks input on budget process

SU seeks input on budget processFebruary 28, 2005Matthew R. Snydermrsnyder@syr.edu

A large group of Syracuse University faculty, deans, administrators and students has been reviewing the University’s budgeting process for several months. Now, the University Senate Committee on Budget and Fiscal Affairs is considering the budgeting model known as Responsibility Center Management (RCM), and will seek input from the entire campus community during the Spring 2005 semester.

In May 2004, Vice Chancellor and Provost Deborah A. Freund convened a working group of senior faculty, deans and staff and charged them with analyzing the University’s current system in response to several concerns: It may not be responsive to the decentralized nature of the University; it may restrict deans and other leaders to making incremental decisions, rather than bold ones; and it is not sufficiently transparent.

After a summer of research-including campus visits, review of other budget models and an extensive literature review-the working group identified each of the four funding models common to higher education. These are: “central control,” SU’s current model, in which revenue is collected centrally and doled out to the schools, colleges and other units; “tubs,” in which each school, college and auxiliary unit is expected to be self-supporting; “activity driven” budgeting, a hybrid of tubs and central control; and RCM, which places teaching and learning activities in the schools and colleges at the center of financial decision making. In RCM, schools and colleges set their academic agendas in concert with a university strategic plan and raise the resources necessary to reach academic goals; in effect, revenue is linked directly to enrollment and instruction, or in the case of revenue-earning auxiliary units, to money brought in from charges and fees as a measure of support for the central mission. In November 2004, based on this research, Freund convened a 27-member taskforce to explore RCM’s possible benefits to SU.

“Why RCM? Because RCM is the model that gives best incentive to the schools, colleges and auxiliary units to achieve the core mission of the University-teaching and learning,” says Michael Wasylenko, task force chair and senior associate dean in the Maxwell School of Citizenship and Public Affairs. “It helps them advance fairly alongside the University’s strategic goals, it ensures robust faculty governance and it brings transparency to the ‘social contract’ by which members of the University community help the whole become greater than the sum of its parts. Budgets become a matter of public knowledge and decisions are clearly explained.”

A growing number of universities have adopted RCM since it first appeared at the University of Pennsylvania and University of Southern California in the 1970s and 1980s. According to Wasylenko, RCM has been successful in part because it calls for less top-down management of schools and colleges, considerable scope for faculty governance and increased discretion at the deans’ level, while allowing centralization of strategic directions and macro decisions, such as those pertaining to overall enrollment, financial aid and tuition costs.

Now, Wasylenko’s task force and the University Senate Budget and Fiscal Affairs Committee, seven members of which sit on the task force, are seeking input from faculty, staff and students. The Office of Budget and Planning has posted information about RCM at http://sumweb.syr.edu/ir/budget_i.htm, and the task force, which has been briefing deans regularly on its progress, will host a series of town meetings to solicit input and answer questions. The meetings, open to all members of the University community, will take place March 7, from 4-5:30 p.m., in Maxwell Auditorium; March 8, from 9-10:30 a.m., in Rooms 304 A-C of the Schine Student Center; and March 21, from 3:30-5 p.m. in Rooms 201 A-C of the Goldstein Student Center on South Campus.

Working closely with the task force, The Senate Budget Committee will consider the issues that arise during the town meetings, then brief the full Senate at its April 20 meeting. The Senate will advise Chancellor Nancy Cantor on whether or not to adopt RCM, with the task force providing specific input on allocation methodologies to Cantor, Freund and Senior Vice President of Business, Finance and Administrative Services (BFAS) Louis G. Marcoccia. Cantor is likely to decide on the proposal in late spring, and it will be subject to further review by the Board of Trustees.

If RCM is adopted, the task force will provide RCM-modeled budgets to the schools, colleges and other units for fiscal year 2005-06, during which units will be held fiscally harmless-they will receive their actual budgets in the same format as prior years, while tracking the model RCM budgets’ hypothetical billing for fringe benefits, space and financial aid, and proposed infusions of resources from tuition and other income. Shortfalls or surpluses in the RCM framework compared to the existing budget will be noted and for one year kept in place. During fiscal year 2005-06, the task force and University Senate will review the process and recommend changes to the Chancellor, Provost and senior vice president for BFAS; units will plan for fiscal year 2006-07 adjustments to tuition, enrollment, retention and other variables to meet fiscal targets in a phased manner. If RCM is adopted, fiscal year 2006-07 will see units operating fully within the RCM framework.

“At other universities, RCM isn’t an artificial means of reallocating wealth. Changes will occur over time and with full participation of the University community,” says Gerald Mager, professor of education and chair of the Senate Budget Committee. “If RCM moves forward, units will take more of an all-funds approach-in effect, deans and other leaders will have the responsibility to advance the academic mission of the institution, along with the fiscal authority to move forward.”

For more information on the RCM proposal, visit http://sumweb.syr.edu/ir/budget_i.htm or contact Wasylenko at mjwasyle@maxwell.syr.edu or Mager at gmmager@syr.edu.