Monday, September 22, 1997 UCLA departments ease into new budget
system FINANCE: Despite hype, RCM is still criticized by faculty
and students
By Mason Stockstill
Daily Bruin Contributor
UCLA’s new budgetary system, Responsibility Center Management,
is entering its second year of testing, but it still faces concern
and opposition from faculty and staff.
Despite claims by administrators who say that RCM is a cure for
UCLA’s financial concerns, it has its share of potential problem
areas.
The parallel-test phase is different in its second year. Last
year, the old budget system was used officially, but schools ran a
simulation of RCM procedures simultaneously to see how things would
run under RCM.
This year, however, the opposite is the case: RCM procedures are
actually being used, while the old method of accounting is run
side-by-side, to allow administrators to ease into the new
system.
The main cause of concern among faculty and students over RCM
were early reports that fund distribution would be based solely on
the number of full-time students that each department enrolls.
The results could be dire, they feared: smaller classes being
cut in favor of classes with a larger number of students.
Newly appointed Chancellor Albert Carnesale addressed these
concerns at a recent news conference.
"People have this uncomfortable feeling that this (RCM) means
that decisions are going to be made purely on the economics of each
unit," he said. "And the answer is ‘of course not.’"
Decisions to cut programs may not be based solely on economics,
but Carnesale has hinted that they could be based on the strength
of different departments.
Another concern raised in the past year has been the possibility
that academic departments might grow competitive for the limited
capital available to them.
"We might be moving to a zero-sum game where ‘the money I get is
the money you don’t get,’" said Dwight Read, former chair of the ad
hoc Responsibility Center Management Coordinating Committee.
Faculty members are also concerned about the lack of a model
that specifically shows where RCM allocations will go, said Project
Manager George Letteney.
"There is no such model because, as under the old system,
revenue allotments will still be up to the chancellor and the
executive budget committee," he said. "RCM has evolved a great deal
since the project began."
For example, one change has been in the concept of subvention,
the process of subsidizing low-income departments and schools.
Previously, RCM administrators planned on having a portion of
revenues earned by all the departments and schools returned to the
general fund to be distributed – at the chancellor’s discretion –
to departments and schools that did not generate enough revenue to
meet their needs.
Now, however, subvention has been scrapped as a potential RCM
tool, and project-team members are working on other mechanisms to
keep low-revenue schools from faltering.
Letteney said that potential student concerns, such as the
advent of course fees and layoffs, are unfounded because any
changes caused by RCM would take place slowly.
This would allow department heads to deal with changes
gradually, instead of as one drastic paradigm shift.
"(Schools) will end up with no more or less revenue than they
would have under the old system," he said, which would make changes
at the beginning of RCM’s use unlikely.
But, as schools and departments become more used to RCM,
administrators hope that they will discover new ways of saving
money through cutbacks or outsourcing.
The difference between RCM and the old system of fund
distribution is outwardly simple. Under RCM, academic departments
will no longer be supplied with free services, such as janitorial
and payroll services, but will be allotted more money from the
general fund.
For example, a school that previously was allotted $100 million
and used $50 million worth of free services will now have to pay
for those services, but will receive $150 million total to make up
for the shortfall.
The premise is that, given responsibility over all of their
funds and required services, schools and departments will become
more efficient in their spending.
"RCM places responsibility closest to people who know the most
about the decisions," said Executive Vice Chancellor Charles
Kennel. "With responsibility and authority comes an ability to make
financial decisions."
Schools and departments will also keep a larger portion of the
money they earn from things such as research grants, much of which
– prior to RCM – went into the general fund for disbursement by the
chancellor.
For the average student, the effect of moving to RCM will be
minimal.
Any impact that the new system could have on student life will
probably take years to come about and, even then, will probably be
minuscule.
Students not sure about how RCM will affect them can view the
RCM project’s Web site (http://www.rcmproject.ucla.edu), but the
site is mainly dedicated to financial jargon that does little to
explain what RCM is or does.