University of Rochester

Administration and Finance

Management Assumptions / Decision Rights

In March 1989, the Priorities Advisory Committee approved a document that outlined central administrative responsibilities and school/college responsibilities under a distributed budgeting system. While the order has been changed for the sake of clarity, the following material is taken entirely from the document approved by the committee.


The degree to which Central Administration will be involved in the decisions of a specific school or college will depend upon the degree to which the decision affects the University as a whole or operating units outside of the specific school or college. Of prime concern are the costs or risks that the decision imposes on the University during the present or in future periods.


  1. A school wishes to establish its own freestanding accounting system without adequate interaction with the University's central systems. The University, in this case, would insist upon certain standards, compatibility of systems, etc. The potential costs result from the possibility of inadequate government reports and financial statements, greater expenditure by University accounting and systems personnel on adjustments, etc.
  2. A school wishes to hire an individual without appropriate attention to affirmative action issues and procedures. The University, in this case, would insist upon adherence to affirmative action protocols. Potential costs in this case are associated with charges of discrimination, lawsuits, etc.

Central Administration Responsibilities

  1. Overall fiduciary responsibility for the University and its constituent parts, i.e., long-range financial stability. Compliance with Board-defined policies.
  2. Ensuring compliance with federal, state and local laws and regulations.
  3. Definition of the University's strategies, goals, assumptions and operating principles.
  4. Allocation of resources and central expenses across the major units of the University.
  5. Provision of defined central services and infrastructure support to divisions.
  6. Approval of major financial transactions. (Those exceeding a certain dollar threshold and those that have implications for the future, e.g., grants, contracts, tenure commitments.)
  7. Stewardship of assets—physical and financial (endowment and facilities).
  8. Formal relationships with external agencies including government, industry and accrediting boards. (Schools and colleges are participants in these relationships.)
  9. Decisions affecting the University as a whole.
  10. Investment decisions.
  11. Borrowing and financing decisions.
  12. Establishment of management systems, structures and procedures for monitoring and control of University operations in accordance with the current regulatory environment. (Schools and colleges provide input and participate in evaluation.)
  13. Verification of norms for programmatic and financial performance. Evaluation of divisional performance.
  14. Allocation of corporate and individual development prospects.

Divisional Responsibilities

  1. Development of school/divisional priorities consistent with those of the University.
  2. Development of school/divisional operating plans.
  3. Preparation of and adherence to budgets that are consistent with program priorities and with overall University financial policies.
  4. Management of resources of the school or college and maintenance of financial control in accordance with University policies.
  5. Specific personnel actions (hiring, firing, promotion, evaluation and salary increases).
  6. Maintenance of quality of programs and evaluation of students, faculty, staff.
  7. Management of assigned development prospects.
  8. Provision of information on programmatic and financial performance, and on strategic goals.
  9. Compliance with University policies and procedures.

Examples of Decision Making Under School/Divisional Budgeting

Issue School/College Central


  • Distribution of Positions
  • Hiring, Evaluation, etc.
  • Specific Cases
  • Specific Increases
  • Overall Faculty Size
  • Recruiting & Other Protocols
  • Salary Guidelines
  • Overall Review


  • Specific Cases: Hiring, Firing, Evaluations, Raises
  • Selection of Incumbent
  • Overall Personnel Policies, Salary & Wage Scales, Guidelines, Protocols
  • Applicant Screening & Referral


  • School Operating Plan
  • Revenue & Expenditure Projections
  • Management & Control
  • Transaction Management
  • Local Reporting & Monitoring
  • University Priorities
  • Budget Guidelines & Policies
  • Review & Approval of School Budgets & Plans
  • University-Wide Monitoring

Financial Management

  • Local Management System
  • Local Control & Approval
  • University-Wide Management System
  • Disbursement Rules
  • Reimbursement Limits
  • Financing/Borrowing
  • Investments
  • External Financial Relationships
  • Official Financial Reporting
  • Admissions & Aid Policies
  • Individual Admissions & Aid Decisions
  • Admissions & Aid Policies
  • Individual Admissions & Aid Decisions
  • Discretionary Facilities Maintenance, Modifications, etc.
  • Energy Conservation
  • Space Allocation
  • Major Maintenance & Repair