Responses

Jonathan Discussion:

            In its introduction to the proposed Responsibility Center Management (RCM) budget strategy, Kent State’s leadership team discussed a need to reevaluate its current processes. This acknowledgement led to a review committee who was tasked with the goal of finding a budgetary model that could accommodate the ever-changing expectations of public universities (Kent State, p. 2, 2015). While they admitted no budget approach alone is perfect, they felt as though the RCM budget model provided the most flexibility and aligned closest to the college’s principles and values.

            Since Kent State is a “…eight-campus educational system…” (Kent State, p. 3, 2015), the flexibility and autonomy built into an RCM budgetary model was ideal for them. This allows each center to act under its own best interests, while the university president and board of trustees keeps a watchful eye on their progress and expenditures. Throughout the RCM plan, Kent State lays out scenarios concerning reserves, tuition and indirect costs amongst other things. This gives each center guidelines, while also giving them the autonomy to make decisions based on their own best interests. Due to the layout of the university, the RCM model gives Kent State the best chance to weather difficult times, while also trusting its appointed leadership to make wise financial decisions.

 

References

Kent State. (2015). RCM Manual. https://www.kent.edu/budget/rcm-manual.

Faith Discussion:

Budget Cycle Models

            When reviewing Kent State’s decentralized budgeting method, it is clear they chose this approach due to it’s high level of flexibility. Responsibility Care Management, or RCM, “is a decentralized approach to budget allocation that assigns greater control over resource decisions to deans” and offers the assumption that the leader’s will bear more control over finances and the decision-making process (RCM, 2015). The school went with the RCM model because it “is a highly flexible budget approach that can be adapted to unique circumstances or characteristics of a university” and is effective and efficient for the university. “Overseeing the financial operations of the University is primarily the responsibility of the President, Provost and Senior Vice President for Academic Affairs, and Senior Vice President for Finance and Administration” leaving the decisions and budget up to the academic leaders. Internal and external factors that will impact the budget include any social, economic, or political factors. A major government or political factor that impacts higher education is that of financial aid as this can also play a key role in enrollments. “Financial aid has helped low-income students afford a college education, as well as to believe higher education is an opportunity that is available to them” (McClellan, 2017). Economic trends, such as the recession or the current pandemic, can cause campuses to have to make drastic budget cuts or cuts to faculty and staff. Developing a detail budget model, such as the RCM, will help institutions be better prepared for the worst.

 

 

Sources

McClellan, M.J.B.G. S. (2017). Budgets and Financial Management in Higher Education. [MBS Direct]. Retrieved from https://mbsdirect.vitalsource.com/#/books/9781119287766/

RCM Manual. (2015). RCM Operating Manual. (Kent State University). Retrieved from https://www.kent.edu/budget/rcm-manual