1. RCM at Indiana University Bloomington
M.A. Venkataramanan

2. 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

3. 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

4. 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

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

6. 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)

7. 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

8. 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

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

10. Questions - Discussion