What is responsibility centre management?
Responsibility centre management is a process that empowers our academic and non-academic leaders to manage their own revenues and expenses.
Placing resource decisions closest to the locale where they are put into practice improves both decisions and outcomes. In addition to budgetary authority, responsibility and accountability is also placed at the local level. An appropriate level of central governance and controls ensures ongoing alignment with institution-level values, priorities and fiduciary obligations.
This process best aligns the institution to meet goals set out in the vision, mission, and values and expressed in our institutional plans. Through the resource allocation process, responsibility centre management assigns revenues to the units based on activity metrics. The university retains some funds centrally for flexibility and to reach institutional goals.
Resource allocation is a decision-making process whereby the university’s resources are assigned. Financial authority is aligned with university governance structures, decision-making authority, and management is accountable for their use. In moving to an responsibility centre management model, the university must intentionally design structures, policies, practices, and processes to ensure the new model will fit with the organizational culture and strategic priorities. This in turn will enable the alignment of resources behind strategic plans, both institutionally, and at the college/unit level.
The university began the process of improving the resource allocation model in 2007/08, with the second integrated plan. Responsibility centre management has now been adopted as our resource allocation model. The ongoing work includes refinement of the transparent, activity-based budget system (TABBS).
The transparent, activity-based budget system (TABBS) is the university’s allocation model. The current model attributes operating revenues and costs to the units that generate them. This creates a “full-cost” view of revenue generating operations. The TABBS model data is updated annually to reflect changes in activity levels, tuition revenues and government funding. The university plans to have ongoing reviews of the TABBS model to ensure the incentives in the model align with plans and priorities, and to ensure the information regarding costs continues to be reliable.
Principles and common terms
The principles of the university’s RCM framework are:
Empowerment - responsibility for revenues and costs are managed at the local level
Accountability - alongside budgetary authority, responsibility and accountability is also placed at the local level, where decision are taken, and plans are implemented
Balance – appropriate level of overall governance, policy direction, and financial control ensures the organisation is not only the sum of its parts, specifically by delegating responsibility and decision-making for implementing the academic mission while centrally coordinating services to support efficient and effective achievement of the mission
Intentionality - Planning ensures ongoing alignment the institution-level values and priorities
Good governance - fiduciary obligations of the Board of Governors continue to be abided, the transition to RCM does not change the university’s governance structure
Transparency – rationale, process, and outcomes of decisions are communicated clearly
Comprehensiveness – to inform decision-making at local and central levels, all funds will be budgeted to align with institutional plans and priorities, and unit/college plans
Responsibility centres: divide the organization’s planning units into revenue and support centres responsible for financial decisions delegated to the most appropriate local level of the organization.
Revenue centres (RC): academic responsibility centres charged with carrying out the institution's primary missions of teaching, research, and outreach (i.e. colleges and schools).
Support centres (SC): responsibility centres providing support services to other responsibility centres (i.e. administrative units).
Responsibility sub-centre: represents the standard of intra-centre decentralization at the discretion of each responsibility centre or sub-centre, allowing operating decisions to occur in close proximity to point of implementation (e.g. Gwenna Moss within Vice-Provost TLSE, or Department of Biology within the College of Arts & Science)
Institutional expenses: common goods/services managed on behalf of the institution by various units across campus but which are distinct from the responsible unit’s operational expenses/envelopes (e.g. utilities).
Envelope funding: the allocation of operating funding to a responsibility centre as a single line item (i.e. in an “envelope”) managed directly by the responsibility centre.
Transparent Activity-Based Budget System (TABBS): a financial model developed by USask which informs allocations of operating budget revenues and costs to revenue centres.
Unrestricted operating grant: base operating funding primarily from the Government of Saskatchewan that supports general university operations.
Restricted operating grant: operating grant funding that has financial restrictions on the use of the funds. For example, funding provided from multiple provinces to the Western College of Veterinary Medicine in accordance with the inter-provincial agreement.
Indirect costs: represent allocations to support centres and institutional expenses which are assigned to revenue centres through TABBS.
“Hold neutral” concept: procedure applied during resource allocation process to ensure a like for like model comparison. This is used as revenue centres should not be advantaged or disadvantaged by changes in the model design or data within it in the year those changes are introduced. For example, extraordinary items such as the College of Medicine faculty restructuring are neutralized through the hold neutral procedure.
Baseline: the starting point of a responsibility centre’s envelope calculation, initially based on the prior year allocation and is subject to strategic and operational adjustments.
Source: Whalen, E.L. 1991. Responsibility Center Budgeting. Indiana University Press
|President||Office of the President|
|USask Legal Office|
|Provost and Vice-President Academic||Office of Provost & Vice-President Academic|
|College of Graduate and Postdoctoral Studies|
|Vice-Provost Faculty Relations|
|Vice-Provost Teaching, Learning and Student Experience|
|Vice-Provost Indigenous Engagement|
|USask Health Sciences|
|Institutional Planning and Assessment|
|Museums & Galleries|
|Vice-President Finance and Resources||Office of Vice-President Finance and Resources|
|Information and Communications Technology|
|People and Resources|
|Vice-President Research||Office of Vice-President Research|
|Centre for the Study of Co-operatives|
|Vice-President University Relations||Office of Vice-President University Relations|
|AVP Alumni Relations|
|Dean, Agriculture and Bioresources||College of Agriculture and Bioresources|
|Dean, Arts & Science||College of Arts & Science|
|Dean, Dentistry||College of Dentistry|
|Dean, Education||College of Education|
|Dean, Edwards School of Business||Edwards School of Business|
|Dean, Engineering||College of Engineering|
|Dean, Kinesiology||College of Kinesiology|
|Dean, Law||College of Law|
|Dean, Medicine||College of Medicine|
|Dean, Nursing||College of Nursing|
|Dean, Pharmacy & Nutrition||College of Pharmacy & Nutrition|
|Dean, Veterinary Medicine||Western College of Veterinary Medicine|
|Executive Director, Environment and Sustainability||School of Environment and Sustainability|
|Executive Director, Public Health||School of Public Health|
|Executive Director, Public Policy||Johnson-Shoyama Graduate School of Public Policy|
Resource allocation overview
Provincial operating grant
Senior Director, Resource Allocation and Planning
Senior Director, Assessment and Analytics