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Maximizing Departmental Resources:

Maximizing Departmental Resources: . The RMM in Myth and Reality October 29, 2013. BUDGET, noun. a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them

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Maximizing Departmental Resources:

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  1. Maximizing Departmental Resources: The RMM in Myth and Reality October 29, 2013

  2. BUDGET, noun • a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them • a plan for the coordination of resources and expenditures • the amount of money that is available for, required for, or assigned to a particular purpose • Source: http://www.merriam-webster.com/dictionary/budget

  3. Resource, noun • a supply of something (such as money) that someone has and can use when it is needed • a place or thing that provides something useful • Source: http://www.merriam-webster.com/dictionary/budget

  4. Resource Management Model, aka RMM • Iowa State’s approach to attributing revenues and allocating administrative expenses as part of its annual plan to coordinate resources and expenditures • Includes principles and formulas to direct the mechanics of the process • Includes decision-making at every level of the university

  5. Tuition • Attributed to colleges based on enrollments and student credit hours • All enrollments? Yes -- undergraduate, graduate, professional, off-campus, on-line, summer, fall, spring • All student credit hours? With the exception of 599 and 699 graduate research credits, yes -- lectures, labs, studios, undergraduate, graduate, professional, on-campus, off-campus, on-line

  6. Indirect Cost (IDC) Revenue • Attributed to individuals and organizational units to reflect the effort and commitment in attracting and managing external grants and contracts • Academic home(s) of PI and co-PIs  45% • Unit that administers the grant/contract proposal & award  10% • Central research support  10% • Individual PIs  15% • Central research & mandatory facilities support  20%

  7. State Appropriations • Primarily distributed among colleges, central research office, and extension & outreach • Initial distribution in FY09 balanced individual unit budgets • Subsequent redistribution of on-going appropriations and distribution of new, incremental appropriations reflect institutional strategic goals and priorities • Also funds President’s Office beyond what interest & miscellaneous income provide

  8. Administrative Expenses • Allocated to colleges (including the Agriculture Experiment Station), central research office, extension & outreach, and significant non-academic auxiliary units, e.g. Residence Halls • Utilize data to approximate consumption or benefit of the administrative services

  9. Administrative Expenses, cont. • Metrics used to fund central administrative units: • Academic administration & academic support programs—faculty FTE • Library—student, faculty, staff headcount • Students Services—student headcount • Information Technology Services—employee FTE & student headcount • Business Services—employee FTE • Facility Services—net assignable square feet

  10. Five Common Myths about the RMM • The RMM applies to all funds • The RMM created new money • The RMM is just a bunch of formulas • The RMM doesn’t affect me (a department chair) and budgets don’t matter • The RMM is to blame for……. [fill in the blank!]

  11. 1. The RMM applies to all fund sources • NO, the attribution of revenues is largely focused on those revenues in the “general fund”, i.e. tuition, IDC revenue and state appropriations • And YES, because all of the activity supported by all fund sources, e.g. the employees in the residence system and those supported by external grants & contracts, are included in the data used to allocate central administrative costs

  12. 2. The RMM created new money • NO, when first implemented the RMM took the institutional budget and “repackaged” it. The budget got no bigger, nor smaller • And YES. Since the implementation of the RMM, overall enrollment has grown by nearly 24% and external funding has increased by 19%.

  13. 3. The RMM is just a bunch of formulas • YES, there are formulas and mechanisms to attribute revenue and allocate costs • And NO, there are many decisions that are made before and after the formulas are employed, e.g. • Distributing state appropriations • Determining the size of the administrative cost pools

  14. 4. The RMM doesn’t affect me (a department chair) and budgets don’t matter • YES because the RMM formulas don’t formally flow down to the department level. They “stop” at the college level. • NO, that it is not true, because the RMM has changed how colleges manage their budgets, which is bound to affect departments.

  15. 5. The RMM is to blame for…… [fill in the blank!] • Maybe…………maybe not!

  16. Thank you for taking the time to review these slides. • Please bring questions to the session on Tuesday, October 29 at noon in the Pioneer Room at the Memorial Union. You may also submit questions in advance to me at ellenr@iastate.edu

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