RCM at Indiana University Bloomington M.A. Venkataramanan

RCM at Indiana University RCM introduction at IUB Overview philosophy and guiding principles Advantages & Disadvantages Allocation of major revenue sources Assessments: Allocation of central expenses Recent refinements

RCM Introduction 29 year legacy at IU Nationally more universities are adopting, especially after great recession Academics guide decision-making RCM is a tool for allocating resources, and not an academic solution

Overview philosophy and guiding principles Bulk of tuition revenues go to the academic units Facility, operations, and central administrative costs are assessed or taxed by campus and university A pool of funds is collected to meet common campus needs

Advantages of RCM Decisions are made closer to activity Rewards innovation Combines fiscal authority and responsibility Increases transparency Improves predictability

Disadvantages of RCM Tragedy of the commons Funding for campus strategic investments Multidisciplinary initiatives, when one unit is fiscally disadvantaged Perception that budget model limits choice (but budget model is only a tool)

Allocation of major revenue sources Tuition and Fees Undergraduate – financial aid and common pool funds off top; rest distributed based on agreed upon per credit hour rate Graduate – directly to schools State Appropriations – distributed to schools External grants and contracts – to PIs, less ICR Advancement – donor intent

Allocation of central expenses Provost Fund – funds taken off the top for common good priorities (multi-school initiatives) Through budget hearings, returned to schools for campus priorities (diversity, student services, etc.) Campus facilities and central support services – taxed as campus assessment Drivers: ASF, FTE, and Credit Hours University services (e.g., information technology) – taxed by university administration

Recent refinements Increased transparency Increased predictability (always trumps accuracy of allocating expenses) Increased funds for common good priorities

Questions - Discussion