A Merger, and the Case for Decentralized Financial Management

Faced with a challenging situation at the University of Toledo, Scott Scarborough reports, in Business Officer, what he learned as he explored the pros and cons of responsibility-based budgeting- and the still-to-be-answered questions that help that institution's leaders make the decision.

"When I joined the university in early 2008 as its new chief business officer, the deans of business and education asked, "What's the next step toward implementing RBB?" It was obvious that these deans were eager for more control of the financial resources generated by their colleges and schools. At that point, I set out to review responsibility-based budgeting—its strengths and weaknesses—and how it might work at the University of Toledo."

"Over the past few months, the deans and I have studied and discussed RBB; we have weighed its pros and cons. In addition, we invited Jon Strauss to the University of Toledo campus for one day to join and inform our conversations; he was very helpful. I have briefed the president and his cabinet on the strengths and weaknesses of RBB and solicited their input. Our president is very supportive of taking the next steps down the RBB path. The deans and their financial staffs voted unanimously to pursue changes to the university's centralized model of financial management. Roughly half of the deans and their financial staffs, however, thought it best merely to modify the centralized model by adding more funding incentives and increasing transparency. The other half in attendance thought it best to pursue RBB fully and abandon the university's centralized financial model. Everyone, however, agreed to continue the conversation before making a final recommendation to the president."

Read the full article here:
http://www.nacubo.org:80/Business_Officer_Magazine/Current_Issue/April_2009/The_Case_for_Decentralized_Financial__Management.html