Responsibility Center Management (RCM)
Penn adopted Responsibility Center Management as our management model in 1974. Under this
model, all Schools and Responsibility Centers are responsible for managing their direct revenue and
expense. Schools, Resource Centers, and Auxiliaries are expected to incorporate into their budgets an
appropriate allocated share of the cost of central administrative services. Administrative centers are
expected to maintain budget balance based on their receipt of a portion of these Allocated Cost Charges.
The RCM model documents our common agreement as to how we will aggregate funds and object codes in
budgets and financial reports, and how we will measure operating performance and changes in financial position.
RCM vs. GAAP Reporting
In addition to RCM for internal budgeting and financial reporting activities, Penn complies with external reporting requirements by reporting financial performance in accordance with Generally Accepted Accounting Principles (GAAP).