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Dominican uses new budget system to promote shared governance

Smart Management?
November 14, 2011

WASHINGTON – Much of the talk at the annual shared governance meeting of the American Association of University Professors is about the lack of sharing – and faculty members spend plenty of time trading stories about outrages they have experienced. But a sparsely attended session at the meeting here featured praise for an institution that has adopted a different approach to administration.

Faculty members benefit from a transparent and open culture while individual schools have more flexibility to plan their budgets under a decentralized management system called Responsibility Center Management (RCM) at the Dominican University of California, speakers here said. Dominican, a Roman Catholic university in Marin County with about 2,300 students and 170 full-time faculty members, might be the smallest university ever to opt for this system, which gives greater powers to individual schools in the budgeting process.

“What the system does is align responsibility and authority together in a shared governance structure,” said Harlan Stelmach, a professor of humanities and chairman of the RCM task force at the university.

Variations of the system have been in place at much bigger universities like the University of Pennsylvania and the University of Southern California. The University of Virginia is moving toward a similar model.

At Dominican, the idea was introduced by Luis Calingo, the chief academic officer, more than two years ago. The result, Calingo said, is greater transparency and greater knowledge of choices facing the institution. As a result of RCM, Dominican’s four schools – School of Arts, Humanities and Social Sciences, School of Business and Leadership, School of Education and Counseling Psychology and the School of Health and Natural Science – have more control over their budget and spending.

“There is a hope that this will lead to more attractive programs – increase in quality and increase in revenue” Calingo said. “The faculty feels they are being listened to," he said. “Dominican is revising a cumbersome governance system that sought to have checks on a previous centralized management culture and often non-transparent budgeting approach,” according to an abstract of the AAUP presentation.

Dominican’s model most closely resembles that of the University of Denver, a smaller university, which has also implemented RCM. The challenge, university officials said, is to retain the idea of the university as a whole instead of having different departments or schools just fending for themselves and focusing too much of their initiatives on just helping themselves. Stelmach said that if a school or department raises more money under the new system, it stays within the school. Faculty members can now work with the deans of their schools to decide how they will run a particular program. Another positive, according to Stelmach, is that departments can do their own fund-raising. “Any fund-raising in the past was at the central level,” he said.

Already, officials said, there is a greater sensitivity to new programs, a consequence of what they call “academic entrepreneurship.” New programs in environmental studies and in public health are examples, they said.

“The most immediate consequence is a willingness to develop new programs because faculty members are motivated,” Calingo said. One of the reasons, he said, is that any surplus revenue from these programs can be used by the schools for new initiatives based on the strategic plans of the department.

“Certainly, we had new programs proposed before. But RCM has accelerated the pace,” he said. “I feel that faculty members have become more sensitive to market considerations.”

Critics of RCM have said that there is a danger that individual departments might focus too much on money and not on academics; that it might discourage cross-disciplinary programs; and it might create too much competition between schools.

 

 

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