New fund allocation system tried at UCLA
By Daily Bruin Staff
March 12, 1997 9:00 p.m.
Thursday, March 13, 1997
FINANCE:
Departments
required to practice fiscal responsibilityBy Mason
Stockstill
Daily Bruin Contributor
UCLA is in the midst of radically restructuring the system used
to allocate funds from the state, and fortunately, the transition
appears to be running smoothly.
The new fund allocation system, called Responsibility Center
Management (RCM), will greatly change the way money is distributed
by the university.
Until now, the College of Letters and Sciences, as well as the
other schools, received a set amount of funds for the year, plus
free support services, such as maintenance, police, and payroll
processing.
For example, a school within UCLA may currently receive $150
million each year to pay for teaching and research, and may use $50
million worth of such things as supplies and services provided by
Murphy Hall.
Under RCM, the school would be given $200 million, but must be
charged for services that were previously free.
The new system is currently in a "parallel test phase," said
Assistant Vice Chancellor Paula Lutomirski.
This means that the program is being tested in departments
campus-wide, while the old system is still being used. However, it
is still in a trial stage, and at this point, anything could
happen.
"We’re learning things, finding areas that need improvement,"
Lutomirski said. "It’s a very complex environment."
The program’s full implementation is set for next Fall.
Ideally, RCM would lead to greater financial efficiency, as
departments gain a better understanding of their expenses and make
choices that they would not have had to make before RCM’s
enactment, according to administrators.
"Departmental units will be more aware of the costs they incur,"
Lutomirski said. "This will let departments rethink their budget
strategies, and eventually cause more efficiency."
However, some fear that increased fiscal responsibility in
separate schools and departments could lead to increased student
fees in the form of school and course fees.
In the past, the schools have had unlimited free use of services
and supplies. But under RCM, they will be forced to limit their use
of these amenities in order to fit within a pre-determined
budget.
"There are things we’ve come to expect as always being there,
but we never gave any thought to the cost," said Eva Baker, dean of
the Graduate School of Education and Information Studies.
"Under RCM, we have to pay a lot of attention to what costs
what," Baker added.
Some departments are concerned that the schools, instead of
tightening the fiscal reins on themselves, will pass any additional
charges on to students by instituting course fees.
But administrators claimed that students need not be worried
about yet another charge from the university.
"I don’t think that the average student will notice any
difference," Baker contends.
"If anything, it will lead to increased efficiency," Lutomirski
said.
The implementation of RCM has gone smoothly so far. Across
campus, schools and departments are utilizing RCM techniques, but
are still using the "old" system of accounting.
While the trials have lead to some "mixed results,"
administrators did not elaborate on some of the program’s potential
problems.
"Again, we’re learning things," Lutomirski said. "Hopefully,
this will minimize costs and allow us to put some money that
previously was wasted back into academic enterprises."
Chancellor Charles Young has thrown his support behind RCM.
Young stated in his retirement letter that RCM would be one of his
main objectives before his retirement in June, and it still is.
"It’s going quite well," Young said in a recent press
conference.
New Chancellor Albert Carnesale will enter his position while
RCM is still in its trial run.
Although he will have the ability to cancel RCM if he sees fit,
it is unlikely that Carnesale will do so, because Harvard uses a
similar allocation system.
Carnesale, who has a reputation in Cambridge as a "budget hawk,"
will have leeway to re-organize UCLA’s proposed system in a manner
similar to Harvard’s, should he be so motivated.
Regardless of potential changes, though, there is little doubt
that RCM will be fully implemented by next Fall.
"I think it’s a good idea to give us responsibility for our
finances," Baker said.
