Despite Ohio University’s plan to switch to a “more efficient” budgeting strategy by 2016, Responsibility Centered Management could mean deficits for certain colleges.
A formula released by OU last month, which aims to calculate individual colleges’ financial standing after the switch, allocates 15 percent of a college’s funds for the number of students and 85 percent for the amount of weighted student credit hours.
Both Executive Vice President and Provost Pam Benoit and Vice President for Finance and Administration Steve Golding helped answer early concerns at last month’s Faculty Senate meeting, but several senators raised questions about potential debt.
Scripps College of Communication faculty learned the formula projected a $2 million annual deficit under RCM, leaving questions as to how the formula was calculated, said senator Bernhard Debatin.
Although the formula isn’t finalized, Benoit said it is being used to assess possible implications of the RCM switch.
The current formula came from discussions with deans, practices from OU’s RCM consultants and the Huron Consulting Group, she said.
“Deans made a set of assumptions, and now for the first time they are actually giving their staffs real numbers to look at and can understand the consequences of any choice made,” Golding said.
The next step for the deans is to go back to their colleges, meet with the senior leadership team and look at the consequences to determine if they should recommend any changes to modify the model, Golding said.
The Scripps College is required to cap certain classes at 25 students to maintain specific accreditations, while two-thirds of classes needed to obtain a journalism degree come from the College of Arts and Sciences, Debatin said.
“It has a long-term effect. It’s humiliating and not good for morale to create a situation where certain colleges are permanently put in a situation of constant deficits,” Debatin said.
The College of Arts and Sciences and the College of Business are set to receive the greatest return because of the number of students in their programs, the size of the classes and general education requirements.
Meanwhile, colleges such as Fine Arts and Scripps are subject to little or no returns because of the need for smaller class sizes and instruction.
Faculty Senate Chair Joe McLaughlin said he was not surprised by the discussion at last month’s meeting and added that although no final decision has been made, fairly detailed models of implications were recently shared with faculty for the very first time.
“(Arts and Sciences) teaches about 45 percent of Athens students in terms of credit hours, and only about 30 percent (of students) are majors,” McLaughlin said. “That kind of formula is going to benefit the college.”
Colleges such as Fine Arts that require one-on-one instruction have higher faculty salaries and costs, he said.
“As promised, a forum on campus with the current numbers will be held before the end of the quarter,” Golding said. “We are committed to doing that.”
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