FAQs for Finance & Budget Officers

How does an Algonquin-specific RCM differ from Algonquin’s current budget process?

Today

  • Budget approved based on academic & financial necessity
  • Each school primarily responsible for financial performance for expenditures and tuition revenue
  • School is not responsible for full “matching” revenue and costs
  • Limited program costing reporting
  • President’s Council deals with operational budget decisions

Under RCM

  • Budget approved based on academic & financial necessity
  • Each school primarily responsible for financial performance for revenues and expenditures
  • School is responsible for full “matching” revenue and costs
  • Continued program costing reporting
  • President’s council deals with strategic direction of budget

What are the major decisions Algonquin must make in order to put in place an Algonquin-specific RCM?

There are three (3) major decisions that Algonquin has made to have their own RCM model.

Revenue

Direct tuition and other direct revenue sources are already allocated to the schools (academic) departments. The Provincial Grant is centrally held.

Decision: How will provincial grant to be allocated to Academic departments?

Central or Corporate Administration expenses

Direct costs are already charged to the respective departments – both academic and non-academic. Under RCM, the academic departments will be charged for their share of the Central or Corporate Administration expenses.

Decision: How will non-academic costs be allocated to the Academic departments?

Space Costs

Direct costs for dedicated space (academic or non-academic) are already allocated to departments where easily attributable. Under RCM, the space costs need to be allocated to the Academic departments.

Decision: What will be included in defining space costs? How will these costs be allocated to the Academic departments in a manner reflective of costs of differing types of space and campuses?


What is the relationship between program costing and RCM?

Program costing is an in-year evaluation done by the College for full time programs only. Certain decisions are made during program costing which are not covered under an RCM model.

RCM stops at the Dean level; it does not prescribe a methodology for allocating costs to a particular program. The Dean has authority on how costs are allocated, if at all, between their programs.
One of the largest differences between RCM and program costing is the Provincial Grant recognition. The College receives a large Provincial Grant on a 3-year average, 2-year lag tied to enrollment and Weighted Funding Units (WFUs). For a new program, we may not see full provincial grant revenue for 5-6 years. In Program costing, in-year funding will be assumed to better represent the actual performance of any program.

RCM supports the fundamental principle that the future of any program should not be made wholly on financial performance.

What is the Finance Support Group?

The Finance Support Group is a working group consisting of members from the College’s finance departments and budget officers and business administrators, from each of the Academic and Non-academic department. As a community of practice, the group works to support each other and assist their respective departments in strengthening financial literacy and budget management.

How can costs be apportioned fairly?


The “Made at Algonquin” RCM model is a methodology that decentralizes both revenues and expenditures. Departments are allocated their share of grant revenues, and assume responsibility for their share of central administrative and physical resources costs.

Each department’s share of revenue is based on grant allocations: the General Purpose Operating Grant and Growth Grant from Ontario Ministry of Colleges and Universities (OMCU). The total amount of revenue is based on the number and value of Weighted Funding Units (WFUs) for all the programs contained within a particular department.

Academic Departments contribute their share toward central administrative services, based on their relative portion of the College’s total direct costs.

Example:

Department Direct Costs…………………………………………………………$100,000

Total Academic Direct Costs………………………………………………÷$1,000,000

Department % of Total………………………………………………………………………..10%

 

Total Central Administration……………………………………………………$50,000,000

Department % of Total Administrative Costs…………………………x 10%

Department Share of Central Administrative Costs…………………$5,000,000

 

The costs to operate and maintain Space are shared according to the percentage of assignable square footage by each department. These space costs (General Overhead) are composed of; the Director of Physical Resources office, Facilities Planning and Occupational Health and Safety. These costs are calculated based on the department’s portion of the total College assignable square footage.

The other space operating costs are specific to the Woodroffe Campus only and are therefore only charged to departments using space within Woodroffe. These space costs (Woodroffe specific) are composed of; Technical Services, Operations and Maintenance, Grounds Services and Protection Services. These costs are allocated based on the percent of assignable square footage used at the Woodroffe Campus.

Open classroom space is assigned to Academic departments based on the percentage of actual utilization in the previous fiscal year. This percentage is multiplied by the total assignable square footage for Open Classroom space and added to the Academic department’s assignable square footage total.

How will RCM affect my job?

For Budget Officers, the daily and periodic work to manage budgets and the flow of data will continue as usual. A major change will occur with the implementation of the ERP software that will improve functionality through standardized, timely and accurate data.


Will there be training?

We are currently finalizing our Training Plan that will be composed of four (4) phases:

  • Just in time – within the next two weeks, the description of the journal entry processes and specific General Ledger Codes and descriptions;
  • Specific RCM Training – specific training geared to how to read the financial statements, general finance information and budget training to be available starting in June and repeated several times annually;
  • Review of actual financial information – in June and August, an opportunity with Duane McNair and Grant Perry to look at the financial reporting system and RCM entries. Two meetings would be scheduled to be able to focus on Academic and Non-Academic departments in separate meetings.
  • Tool Kit – this training is a more of a tool kit of resources and training, internal and external to the College to support skills needed to exceed in leadership and management under RCM, but also in a larger context of management skills.

We have created an RCM resources page, with links to training on RCM, Algonquin financial software’s and Financial Literacy. Go to the RCM Resources page at https://www.algonquincollege.com/rcm/rcm-resource-centre/. These baskets of training will be updated as needed, so check back often!

  • Where can I read more about RCM?

    Go to the RCM Resources page at www3.algonquincollege/rcm/. This area will be updated frequently so please check back often.