Responsibility Center Management
With Fiscal Year 2022, Drexel University has adopted the RCM model, with plans for full implementation by Fiscal Year 2023. The RCM budget model offers numerous advantages over Drexel’s traditional, incremental model of budgeting, including:
- Increased transparency into budget decisions.
- Enhanced stewardship of funds.
- Incentives for academic entrepreneurship.
- A data-based foundation for resource allocations.
RCM Implementation at Drexel
To ensure the success of the University within the RCM model, the RCM development and implementation process has been guided by several key principals:
- Common Good: The model focuses on the greater good of the University instead of the individual units, including what is best for our students, academic and scholarly excellence and the overall health and sustainability of the University.
- Transparency: The model aligns with the University’s strategic goals with allocation methodologies that are clear, understandable and auditable.
- Clarity: The model prioritizes simplicity with easily understood rules that allow units to maximize performance and reap the rewards of sound financial stewardship and strong performance on strategic priorities.
- Innovation: The model provides significant opportunity for innovative ideas to be piloted and implemented.
- Responsiveness: The model reflects the unprecedented changes in the higher education landscape and is flexible enough to adjust to changes in the future.
Drexel’s historical budget model was incremental in nature. In its simplest form, it rolled units’ prior year operating budgets forward and either added or subtracted some amount of funding to those figures. This approach did not tie activity levels (e.g., enrollments, credit hour production, research activity, etc.) directly to funding and therefore sometimes resulted in non-equitable and/or non-transparent funding allocations. The redesigned RCM model is intended to remedy these issues and utilize a data-driven approach to resource allocation. The University’s transition to the RCM model began with a 2012 review of Drexel’s administrative processes, performed by an outside firm, and has had multiple iterations leading up to a fully revised model to be implemented in Fiscal Year 2023.
In late 2019, the Provost’s Finance Group was formed, comprising leadership from the Provost’s Office and the Office of Budget and Financial Planning, with the goal of fully implementing the RCM model. The Provost’s Finance Group later joined with administrative and financial leadership from four colleges and schools as well as the Faculty Senate Budget, Planning and Development Committee to form the RCM Working Group.
In spring 2021, the Provost’s Finance Group began meeting with every college and school to discuss recent revisions to the RCM model, as well as the work that remains to be done. While the previous RCM model allocated four revenue pools with different allocation methodologies, the revised RCM model simplifies this with one revenue pool allocated to three priorities: Research Sponsored Revenue, Scholarly Productivity (Student Credit Hours) and Undergraduate Performance Metrics. Program performance data is normalized across the colleges and schools to account for enrollment disparity using a min/max methodology.
The revised RCM model “soft launched” in July for Fiscal Year 2022, and was fully implemented in Fiscal Year 2023. An RCM Advisory Committee was established and charged with ongoing review and improvement of the model, as well as with identifying any substantive issues or unintended impacts resulting from the RCM model.
The RCM Working Group and the Office of the Senior Vice Provost for Finance and Administration invite your questions and feedback on the Responsibility Center Management budget model and implementation.