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Articles: Asset & Investments

There has been a rash of major embezzlement cases cropping up like a pox at institutions of higher learning all around the country. While employee theft occurs daily at all types of organizations, we have tracked a disproportionate number of significant misappropriations at U.S. colleges and universities. The damage, while significant, is not only financial. Institutional reputation, alumni relations, endowment growth, employee productivity, and even enrollment, can all be negatively affected by a major defalcation.

You can’t just toss an old computer into the corner trash can when it has outlived its usefulness.

Because of the environmental issues involved, special care must be taken in disposing of such equipment. Often, that involves paying for proper disposal. If you do choose to trash aging PCs in a Dumpster, you need to wipe any sensitive data from each one’s hard drive for security and privacy reasons.

Doing more with less is the new normal in higher education. And as college and university administrators work to increase efficiencies, the areas of planning and assessment have grown in importance as strategic tools to manage resources.

Thomas Edison, America's most prolific inventor, once explained his passion for innovation by saying, "There's always a better way." That's the spirit, if not the directive, for the campus departments profiled in the first round of 2011 Models of Efficiency honorees. When it comes to finding ways to streamline business processes or save time and money, the stories you'll read on the following pages will, we hope, inspire you and your department to look for your own ways to better serve constituents.

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?

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."

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.

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.

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