Thursday, June 11, 1998
Billing system requires more study before being changed
ADMINISTRATION: Program aims to help University control
difficult monetary ledgers
By Lawrence Ferchaw
Daily Bruin Staff
The university’s controversial new budget system is suddenly not
so controversial – at least for now.
In a recent letter to faculty, staff and administrators,
Chancellor Albert Carnesale announced that academic departments
would not be charged for the administrative services they use,
something the budget system, Responsibility Center Management
(RCM), had once called for.
Carnesale also announced a name change from RCM to INFORM
(Information for Resource Management). In the same letter,
Carnesale described some of what RCM, now INFORM, has done.
"Really, 85 to 90 percent of what we set out to do has been
implemented," said George Letteney, RCM coordinator.
"The signal the chancellor wanted to give is that this is no
longer a test initiative. This is something that will become a part
of the fabric of administration," he continued.
One of the most controversial aspects of INFORM was the
implementation of a new billing system for campus units. Under this
plan, each department would get more money, but would also have to
pay for some of the services that are now free. This portion of
INFORM has now been tabled for further review.
In his letter, Carnesale said that more information and study
was needed before deciding to charge academic departments for
services.
"We are not, and will not be, moving to a private sector model
for financial management of the university," he added.
"That’s the right approach," said David Lefkowitz, assistant
professor of music. He said he agrees with deferring this kind of
resource allocation.
With INFORM, departments now see both a statement showing the
costs of administrative services and a statement which does not
include these costs. Letteney indicated that these reports show the
true costs of a department.
Administrators will continue to study this billing process, but
have not decided when they will start billing departments for the
services.
"It’s not a simple matter to accomplish. This is not something
you’re going to accomplish overnight," Letteney said.
But even with the delay in charging departments for university
services, INFORM’s current incarnation still marks a major change
in the way the university does business. These are some of the
changes:
*The system consolidates the large amount of financial and
non-financial information of the university – supposedly to make
for easier decision making.
*INFORM provides interim financial reports for the campus units
and budgeting that includes all the funds a department receives,
not just state funds which the previous system used.
*INFORM also introduces a web-based database where faculty and
staff can look up this financial information as well as
non-financial data. So far, 1,500 faculty and staff members have
requested access.
*INFORM changes financial planning and budgeting from a one-year
cycle to three to five-year intervals to reflect the long-term
nature of academic planning.
"When you’re looking three years out, and you can line up
financial resources, then you can get something done," said Glyn
Davies, assistant vice chancellor for academic planning and
budget.
Administrators also claimed that, sans charging departments for
services, INFORM enjoys widespread support.
Lefkowitz noted that almost everyone who worked on the
committees to implement INFORM was in favor of the more open
accounting processes.
"UCLA is a rather vast enterprise to be running with little or
no information," agreed Letteney, pointing out that the university
would be in the Fortune 400 if it were a private company.
With 14,000 funds, 7,000 contracts and grants, 500 departments
and over nine million transactions per year, UCLA’s financial
picture is complicated. INFORM is supposed to make the picture
clearer, Letteney said.
But despite the apparent need for such budgeting tools,
administrators said the move to the new system did not mean the old
one was bankrupt, Letteney said.
"INFORM is not a panacea, it’s just another set of tools," he
said, which would make better decisions easier to make.
Besides information and funds allocation, INFORM is also
supposed to examine the services that central administration
provides and improve them.
Ten Service Advisory Boards (SAB) have been established by the
chancellor to monitor departments to make sure they are providing
services in an effective and efficient way.
Each SAB covers a number of departments. For example, the
physical infrastructure SAB advises Facilities Management, Energy
Services, Capital Programs and 504 Compliance office.
The INFORM team has been reduced in size and some of the
functions have been transferred to other departments.
The entire team will be phased out eventually, but the system
they developed will remain.
"RCM/INFORM is an information system, it’s not a way of life,"
Letteney said.