You are here

Articles: Asset & Investments

It wasn't long ago that the longstanding relationship between town and gown in both Pittsburgh and Providence absorbed a shock, as city officials rolled out plans to tax local colleges and universities.

In 2009, the mayor of Pittsburgh proposed a 1 percent tax on tuitions at the city's 11 higher education institutions to shore up the pension fund for city employees. The mayor in Providence, meanwhile, sought legislation to reduce a $17 million budget deficit with a levy of $150 a semester for each student at Brown University, Johnson and Wales University, and Providence College.

As 2010 comes to a close, campus officials still have concerns about economic realities, but as many in higher education have learned firsthand, a department doesn't need an overabundance of budget dollars and staff members to operate effectively. In fact, tighter budgets bring on creative problem solving, and it's entirely possible to save time and money while raising service to a higher level.

Gov. Mitch Daniels recently implored Indiana's public college trustees to maximize efficiencies and cut administrative costs. Instead of coming to the "Statehouse asking for more money," as he stated, trustees should "stay back at the school and find ways to be more efficient with those dollars." As the president of Indiana's largest public college, I applaud the Governor for acknowledging how critical it is to manage costs as our state faces serious budget challenges. And we all have put some recent efforts in place, under the guidance of our trustees, to cut spending.

Educating students to "think critically, reason wisely, and act humanely" is solidly at the core of what we do in higher education. Sometimes it seems, though, that what's at the periphery—including retail, real estate, and public facilities— demands an inordinate amount of our time and energy. In audits and reports, letters to alumni, and press releases, we lump those responsibilities together under "auxiliary enterprises." The diversity and range of what these may be, however, defies categorization.

It is easy to communicate with constituents when you are talking about enrollment growth, a large financial gift, faculty accomplishments and new building projects. But what about when the going gets rough? What then? How do you share bad news with individuals, both internal and external, who are vested in your institution?

Are you watching all the for-profit universities'; stocks soar as their online programs grow by double-digit percentages?

Have you been reading about private equity firms buying failed private colleges and "preserving the mission,"; but developing online programs? Do you wonder how the University of Phoenix grew to more than 400,000 students? Do you believe that you could develop online programs, market them nationally, capture a small share of those online students, and add millions to your bottom line?

Determining the fair value of assets and liabilities on a university's financial statement has become increasingly stringent, particularly under the Financial Accounting Standards Board (FASB) Accounting Standards Codification Fair Value Measurements and Disclosures (Topic 820), formerly FAS 157. Since compliance with accounting regulations is an undeniable part of a CFO's responsibility, it is important that accounting professionals in higher education are aware of the new standards under Topic 820.

Year-end statements for pensions, 403(b) accounts, and mutual funds aren't as frightening to open as they were this time last year. University endowment managers usually wait until their fiscal year ends in June before they really look at their statements, but interim surveys indicate that performance has improved.

WHEN LYNNE SCHAEFER STARTED HER position as vice president for administration and finance at the University of Maryland, Baltimore County in 2005, the institution's financial reporting tool left much to be desired. Developed internally to pull data from UMBC's PeopleSoft ERP, the tool has produced complex reports that make it "hard to find exactly what pieces of information you're looking at," she says. "This creates frustration, especially for the untrained eye. ... I'm sure in some cases it has resulted in people throwing up their hands and just hoping it all goes ok."

THE NEWS COMING OUT OF higher education these days can seem like an endless stream of updates on shrinking endowments, rising tuition costs, and across-the-board budget cuts. The recession is hitting higher education hard; it seems no one is being spared.

IN THE CURRENT ECONOMIC environment, it comes as no surprise that some higher ed institutions are beginning to wonder whether a radical strategy like reducing sticker price would be the best way to maintain market share. This spring, deposits were lagging at many private IHEs, even at campuses where admit numbers were up. More families were appealing financial aid awards, and more institutions were responding to those appeals. Officials are concerned students may “melt away” before fall.

 

JULY 1 WILL MARK THE START of the new budget year in most institutions across the country. Nothing new, as that’s the regular budget cycle of higher education. But new this year are the deep cuts some budgets have undergone due to the economic situation.

Twenty years ago, projectors had three "guns," weighed between 80-120 pounds, were the size of a coffee table, and took a crew of technicians a couple of days to install and converge. They were dim, expensive, and finicky machines, but the one advantage they had over today's bright, ultra-portable, and inexpensive projectors was that you could come into the classroom or lecture theater and pretty much count on still finding them, on the ceiling, where they were yesterday. Theft wasn't an issue.

Pages