Central Washington University

Overview of RCM ModelsPreliminary Thoughts

Faculty SenateADCO

Scenarios Considered

• Scenario 1 – Share current revenue with colleges based on scheduled credit hours (SCH) and majors/minors. Reallocate entire FY 2013 budget based on FY 2012 actual SCH and majors/minors. Similar with subsequent years.

• Scenario 2 – Share incremental revenue with colleges based on changes in SCH and majors/minors.

• Scenario 3 – Review impacts of general education classes. Pull and pool general education courses.

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Pros and Cons for All Models

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Pro• Known metrics

governing budgetary distributions.

• Budgetary changes can quickly reflect student interests.

• Budgetary change mechanisms can be assessed within Colleges.

• Incentive to improve quality to attract students.

Con• Tendency to de-

emphasize cooperation and collaboration.

• Tendency to de-emphasize service activities.

• Incentive to hire less established faculty teaching large enrollment courses.

• Pressure to offer more courses (possibly outside of one’s expertise or at a lower standard).

• Less discretionary money for meeting the common needs of all.

Questions for All Models (1 of 5)

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• All models base allocation primarily on SCH production. How are scholarly and service activities factored in? Are there qualitative aspects we should consider for these models?

• Grants, Contracts, and other funding sources: How will the RCM model apply when a unit has access to other revenue streams?

• While the Provost is the chief academic officer, many of the academic decisions will be made at the Dean’s level. Is this a model administrators are comfortable with?

• Will there be discretionary fund pools? If so, at what level? What will be done to ensure transparency and equity?

• Would budget decreases follow the same model?

Questions for All Models (2 of 5)

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• Are costs of instruction (personnel, instrumentation, etc.) accurately reflected in any of these models?

• What happens when CWU marketing conflicts with College marketing? i.e. Will CWU still market itself as a school offering small class sizes?

• How will state vs non-state SCH be factored into these models (i.e. Cornerstone courses)? What about courses for interdisciplinary programs such as DHC? What about UNIV and other non-department courses?

• How will summer courses be considered?• How are state support funds used in these

models?

Questions for All Models (3 of 5)

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• Will other metrics (such as graduation rates, retention, fundraising) be part of the allocation scheme?

• How are costs associated with graduate and undergraduate education factored in?

• How will self-support and academic support units be incorporated into the chosen model? Since the focus is on SCH production, will they be at a financial disadvantage?

• Similarly how will new or innovative units that lack cash be funded (at least in their first year)? The model forces programs to always operate at a deficit, only gaining additional faculty AFTER SCH is documented.

Questions for All Models (4 of 5)

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• No overhead is applied to these models. How will administrative services and subvention be funded?

• Given past experiences, how will the campus be confident the data they are being provided is accurate? (i.e. APTF)

• How are resources quickly reallocated if tenure-track lines are used?

• Will in-state vs. out-of-state tuition, tuition waivers, etc. be considered? If so, how?

• Does CWU have an infrastructure to support RCM models?

• How is faculty and staff salary (including compression and equity) factored into RCM models?

Questions for All Models (5 of 5)

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• How will undeclared students be incorporated?– Require all students to declare upon admission

to CWU. If so, the need for retention numbers seem important. (Not popular with some faculty/departments.)

– Require undecided students to declare an interest in a Department, College, or Colleges. (Not popular with some faculty/departments.)

– Pool revenue from students and split evenly/proportionally with the Colleges.

Scenario 1 - Similar to Kent State Univ.

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Share current revenue with colleges based on SCH and majors/minors. Reallocate entire FY 2013 budget based on FY 2012 actual SCH and majors/minors. Similar with subsequent years.

Scenario 1 - Impacts (by College)

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SCH Hours Allocation Model College Budget (FY 2013) SCH Bud DiffCAH 11,005,200 11,357,481 352,281 CEPS 13,403,400 12,673,761 (729,639) COB 7,552,300 5,216,716 (2,335,584) COTS 16,718,100 19,276,069 2,557,969 OISP 671,300 826,273 154,973

Grand Total 49,350,300 49,350,300 -

80/20% model based on SCH and Majors/MinorsCollege Budget (FY 2013) Mixed Bud DiffCAH 11,005,200 10,949,012 (56,188) CEPS 13,403,400 13,346,186 (57,214) COB 7,552,300 5,436,892 (2,115,408) COTS 16,718,100 18,943,912 2,225,812 OISP 671,300 674,299 2,999

Grand Total 49,350,300 49,350,300 -

Scenario 1 - Reallocation based on SCH and Major/Minor

Pro• Metrics reflect

student enrollments.

• Flexibility with adjusting ratios for CWU with data available for assessing the appropriate ratios.

Con• Large changes in budgetary

allocation.• Compensates SCH production

without considering the cost it takes to offer that SCH.

• The unit sizes might result in unequal abilities to effectively compete for funding.

• Problem for high cost programs.

• Reflects one set of metrics (i.e. time to degree, retention are not included). 11

Scenario 1 - Reallocation based on SCH and Major/Minor

Questions• What is the appropriate set of metrics that

should be used? SCH to Major/Minor ratio, should Major/Minor be weighed equally, are there any other parameters to include (time to degree, retention, total credit hours, tenure/tenure track FTE, other academic and staff FTE, assignable square footage, participation at the Centers).

• When will the baseline be taken? The use of a single academic year seems inappropriate.

• How are sudden changes in enrollments handled?

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Scenario 2 - Similar to UW, Indiana Univ.Share incremental revenue with colleges based on SCH and majors/minors.

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Scenario 2 - Model Impacts with only incremental budget increases

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FY 13 to FY 12 Budget Increase Recalculated based on SCH and Major/Minor RCM Metrics

College FY 12 Budget FY 13 BudgetBudget

IncreaseIncrease on

SCHIncrease on

Maj/MinAdjusted Increase

Adjusted FY13 Bud Diff

CAH 10,871,788 11,005,200 133,412 526,512 431,833 507,576 11,379,364 374,164 CEPS 12,955,387 13,403,400 448,013 587,532 743,394 618,705 13,574,092 170,692 COB 7,128,988 7,552,300 423,312 241,837 292,872 252,044 7,381,032 (171,268) COTS 15,739,940 16,718,100 978,160 893,603 816,612 878,205 16,618,145 (99,955) OISP 366,407 671,300 304,893 38,305 3,078 31,259 397,666 (273,634)

Grand Total 47,062,510 49,350,300 2,287,790 2,287,790 2,287,790 2,287,790 49,350,300 -

Adjusted Increase calculated by taking the total budget increase from FY12 to FY13 and prorating it based 80% on SCH and 20% on Majors and Minors

Scenario 2 - Incremental Budget IncreasesPro• Minor differences in

overall budget scenarios for many units.

Con• Can make a lousy

situation worse since it assume the current level of support is sufficient.

• Can only acquire new resources if you can out-perform prior year. (Once again this forces units or departments to operate at a deficit.)

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Scenario 2 - Incremental Budget Increases

Questions• When will the baseline set of numbers be taken?

Given the drastic changes in enrollments during the past several years, the use of a single academic year is inappropriate.

• How will sudden changes in enrollments be handled?

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Scenario 3 - Removing GE productionReview impacts of general education classes.

Pull and pool general education courses.

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Instruction Cost (based on custom Instructor Workload data) Term College 1119 1121 1123 Grand Total

Non Gen Ed CAH 1,717,837 1,739,601 1,982,672 5,440,110 CB 1,174,787 1,167,106 1,278,649 3,620,542 CEPS 2,726,629 2,885,745 2,791,641 8,404,016 COTS 2,514,249 2,723,660 4,813,854 10,051,763 IDST 171,874 190,742 132,018 494,634 INTL 56,522 56,522 Non Gen Ed Total 8,305,377 8,763,375 10,998,834 28,067,586 Gen Ed CAH 652,300 699,088 600,778 1,952,167 CB 70,182 59,582 45,909 175,673 CEPS 118,187 92,070 97,867 308,124 COTS 1,017,202 690,982 662,814 2,370,998 IDST 28,448 14,973 13,830 57,251 Gen Ed Total 1,886,320 1,556,695 1,421,198 4,864,213 Grand Total 10,191,696 10,320,070 12,420,032 32,931,799

Scenario 3 - Impacts by College

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SCH Hours Allocation Model (Reallocating Gen Ed to separate College)College Budget (FY 2013) SCH Bud Diff CAH 9,053,033 2,807,529 (6,245,505) CEPS 13,095,276 10,555,491 (2,539,786) COB 7,376,627 4,657,075 (2,719,551) COTS 14,347,102 6,094,450 (8,252,651) OISP 614,049 826,273 212,224 GEN ED 4,864,213 24,409,482 19,545,269 Grand Total 49,350,300 49,350,300 -

Tuition Generated Allocation Model (Reallocating Gen Ed to separate College) College Budget (FY 2013) Tui Revenue Diff Tui Bud Diff CAH 9,053,033 4,555,415 (4,497,618) 3,579,795 (5,473,238) CEPS 13,095,276 14,435,539 1,340,263 11,343,920 (1,751,356) COB 7,376,627 7,207,161 (169,466) 5,663,623 (1,713,003) COTS 14,347,102 9,743,535 (4,603,567) 7,656,789 (6,690,312) OISP 614,049 464,121 (149,928) 364,721 (249,328) GEN ED 4,864,213 26,394,228 21,530,015 20,741,451 15,877,238 Grand Total 49,350,300 62,799,999 13,449,699 49,350,300 -

80/20% model based on SCH and Majors/Minors (Reallocating Gen Ed to separate College) College Budget (FY 2013) Mixed Bud Diff CAH 9,053,033 3,722,759 (5,330,274) CEPS 13,095,276 10,986,492 (2,108,784) COB 7,376,627 5,651,529 (1,725,097) COTS 14,347,102 7,665,221 (6,681,881) OISP 614,049 672,481 58,432 GEN ED 4,864,213 21,583,233 16,719,020 Grand Total 49,350,300 49,350,300 -

Scenario 3 - Non-Gen Ed and Gen Ed Classes

Pro• Removing funding link

to General Education may eliminate “turf wars”, possibly leading to a meaningful revision to the General Education program.

Con• General Education

courses are also Service Courses. Will these components be differentiated?

• What is the incentive for departments to participate in the General Education program?

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Scenario 3 - Non-Gen Ed and Gen Ed ClassesQuestions• How to distinguish General Education and Service

Courses?• At what rate (TT or NTT costs?) are departments

reimbursed for providing their faculty resources and expertise to the General Education program?

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Other issues for discussion• Option: None of the RCM models be officially

adopted. Rather the administration uses them as one of several guiding factors in making decisions.

• What type of training will Administrators, Chairs, and Academic Support units receive in overseeing any of these models?

• Large course enrollments drive SCH production– How will we deal with accreditation requirements

that dictate class sizes (or faculty/student ratios)?– These models drive the offering of large general

education courses to maximize SCH revenue.– Departments capable of offering large enrollment

classes can have revenue privilege.

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Other issues for discussion (2)• CWU is “known” for its small class size, low student-to-

faculty ratio, and “knowing our students by name”. RCM appears to discourage this practice.

• What is the correlation between large GE classes and retention? Are the best instructors used to teach GE classes or major classes?

• Higher retention rates = more SCH generated by upper division courses. Smaller class sizes = higher retention rates but lower SCH!

• Other schools have used differential tuition to implement RCM models. However, even if such a model could be implemented at CWU, can these higher cost programs recruit eligible students in sufficient numbers?

• Other states use academic fees (rather than differential tuition) for select disciplines. Although it is another revenue source it is not a transparent budgetary model.

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Other issues for discussion (3)• Will RCM apply in FY 2014 after salary and

benefits?– FY 2013 provided incremental revenue for

sharing– FY 2014 headroom will most likely be

consumed by salary, equity and benefit costs• A clear rationale for changing CWU’s budgetary

model should be developed and presented to the university.

• Next Steps– White paper with pros/cons of each model for

President Gaudino.– Michael Jackson/Melody Madlem/Kirk

Johnson/Lori Braunstein key contributors– Target date; April 15, 2013? 23

References• Information on Kent State University’s RCM model

can be found at (retrieved March 6, 2013): http://www.kent.edu/about/administration/business/rcm/links.cfm

• Information on Indiana University’s RCM model can be found at (retrieved March 6, 2013): http://www.indiana.edu/~vpcfo/RCM/index.shtml

• M. J. Bugeja, Stamping out rubber-stamp collegiality, The Chronicle of Higher Education. Can be found at (retrieved March 18, 2013): http://chronicle.com/article/article-content/131946/

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