1. Budget
A budget is a statement of an organization’s plan, priorities, goals and objectives, expressed in financial terms.
Assist in planning and control

2. There are different budget models the most common are:
Incremental budget
Zero base
Formula based
Responsibility centered
Hybrids

3. Incremental budgeting
It is the most common method of budgeting, and what CWU had used in the past
Incremental budgeting takes last year’s actual figures and adds or subtracts a percentage to obtain the current year’s budget
it is simple and easy to understand
Can perpetuate inefficiencies or can ignore external drivers

4. Zero-based budgeting
Starts from scratch and develops a budget that only includes operations and expenses essential to running the business
Allocates funding based on efficiency and necessity rather than on budget history
The zero-based approach is utilized when a corporation is going through a financial restructuring or a major economic or market downturn
it can be an extremely time-consuming approach, so few universities uses it.

5. Formula based
This model uses selected criteria (e.g. enrolment, graduation rates, gross square feet of facilities) to allocate resources
The choice of criteria is critical
Not take into consideration external factors

6. Responsibility Centered
This model shifts responsibility for budgeting and budget management to departments
The model view departments as either revenues centers or cost centers
Revenue centers are expected to meet their needs and produce additional revenue to help support cost centers.
Cost centers are not expected to meet their own financial needs

7. Academic and Support areas
Academic units (Revenue generating)
four Colleges CAH, CEPS, COTS & COB
generate revenue through tuition
Receive allocation through RCM model
Support Units
Some of them generate revenue
Provide service to academic units
Accountable for using budget resourcefully
Most of them use incremental budget model

8. RCM Has been used for more than 35 years Private institutions
Claremont Graduate University, Cornell University, Duke University, Georgetown University, Harvard University, Northwestern University, Johns Hopkins University, Stanford University, Syracuse University, University of Pennsylvania, University of Southern California, Vanderbilt University, Washington University, St. Louis
Public universities
Central Michigan University, Iowa State University, Kent State University, Texas Tech University, Ohio State University, University of Alabama-Birmingham, University of Arizona, University of California Berkeley, University of Cincinnati, University of Idaho, University of Michigan

9. What does RCM accomplishes
Offers rewards for revenue generation and cost effectiveness
Provides accountability at the college level
Aligns of revenues and expenses
More transparency
More flexibility
Better planning