1. Central Washington University
RCM/ABB Journey

2. RCM – ABB what are they and why are we here?
Management philosophy designed to support the achievement of academic priorities within an institution, and allows for a budget which closely follows those priorities.
Significant changes in the higher education landscape— decreased state funding, increased student price sensitivity resulting in limited tuition rate increases and rising costs of salaries—have been major contributing factors in the migration to RCM models across the country, often leading to implementation of incentive or activity based models. 

3. CWU Recognized budget challenges in advance.
Forecasts predicted that costs would exceed revenue in the near future.
Universities across the country were experiencing the same dilemma.
Evaluation of the budget structure and creating an environment that promoted revenue generation led to the implementation of RCM

4. Planned Benefits The RCM model promotes:
Encouragement and reward for revenue generation and cost effectiveness
Intentional decision making in budget planning
Change the nature of decision making at the University, College and Department levels
Alignment of revenues and expenses
Greater transparency regarding sources and use of institutional resources
Enhanced ability to plan with greater control of future resources
Accountability of operation and administrative units
Facilitation of conversations surrounding institutional priorities and the strategic plan
Translation of strategic goals into management and operating plans

5. 4 Years from Planning to Implementation
Progression of the Model:
Tabletop (Excel) model. Used to model data, evaluate performance factors and impacts to the colleges. Initial model had four performance factors.
Student Credit Hour (SCH) – 80%
Majors – 10%
Pre Majors – 5%
Graduation Ratio – 5%
All State 149 revenue was subject to the distribution
All university and academic overhead costs were distributed by the same percentage as the revenue
3 Year rolling average

6. Current Model Performance Indicators simplified: Shared Governance
SCH – 70% College of Instruction
Majors – 30% College of Major (defaults to College of Instruction if none)
Shared Governance
Other updates:
Waivers follow the student – (Currently being re-evaluated)
Facilities costs allocated based on controlled space
Allocation reduced to 3 quarters (spring, fall & winter) vs. 3 years
Budget forums and town halls

7. RCM Flow of Revenue

8. Governance Structure established to support RCM/ABB
President’s Budget Executive Committee
Budget Allocation Sub-Committee
Space & Equipment Budget Sub-Committee
Tuition waiver Budget Sub-Committee
CWU System Budget Sub-Committee
State Funded Capital Sub-Committee
Link to CWU RCM Presentations:

9. Expenses by Program Code

10. Budget Allocations Year over Year
The allocations reported do not include transfers from other funds or the Provost.

11. Next Steps
Continue to communicate and review potential improvements to the model
Develop reporting at the department level to support decision making. Prepare to post revenue, allocated costs and subvention at the department level.
Work with deans and college committees to understand department level data, reports and impacts to the budgeting process.
Fine tune budget forums and town hall meetings to effectively educate the community.

12. Benefits Realized Course fill rates improved
Utilization of WLU improved
Intentional budgeting and awareness of decision’s impact to budget
Space utilization improved, increased control given to Registrar
Summer session projected net profit increase 25%
Subvention requirements dropped in second year by 38%, with one unit’s subvention rate being approximately 50% less than year 1

13. Lessons Learned
Communication: The first two years, “Heads went up and down, but we were all talking different languages.”
Being cognizant of terminology that can be offensive or cause fear.
Presenting the data in a format that was understandable to all.
Continued refreshing of the data and the model frustrated people.
Lack of exposure and expertise to existing financial models on campus caused a lack of understanding for the change.