Part One of Campus Budgeting Culture:
In a post-pandemic reality, colleges and universities face tougher decisions and increased scrutiny of student outcomes. Mark Toner’s 2024 research study, “Budgeting Approaches to Achieve Strategic Sustainability,” makes the case for smarter metrics in the budgeting process. His study notes the need for budgeters to have a sense of “situational awareness” when developing metrics in a way that points to student success. A budget that aligns directly with accreditation requirements, the strategic plan, and other campus-related metrics can lead to student success.
Developing budgetary metrics built to fulfill the promise of quality education to all students takes a collaborative culture. Aligning resources in ways that support student success requires all stakeholders to share the school's vision, mission and values.
Higher Education budgeting officers are under the microscope and heavily scrutinized. Externally, the media constantly generates stories about the cost to benefit ratios of attending college. Corporations like Google and Microsoft are dropping requirements for a college degree. Prospective students and their parents and caregivers pressure schools in their choice to forgo postsecondary education or attend a different school. Internally, school executives, governing boards, and donors are demanding a focus for finding ways to make the most of the funds they receive.
Here are two characteristics of an ideal vision of an organization’s culture. First, absolute fiscal transparency of the school’s budget. Second, it is important that every staff member, administrator, executive, and faculty member has a laser-focus on customer service. Quality customer service requires budgetary attention to fund programs and services that achieve the highest quality outcomes for graduating students.
Today’s parents, caregivers, families, and students are smart enough to understand the cost of instruction and attainment models. We live in an information age where it is easy to find information about salaries, employment, and available services to compare to the cost of student debt and blindly accept the guidance offered by admissions recruiters.
The right culture and transparency of the financial models used could inspire budget managers and their staff to want to help and contribute to solving financial challenges. Evans and Chun, in their book Creating a Tipping Point: Strategic Human Resources in Higher Education, echoed the cultural importance, indicating that in times when budgets tighten, a “clued-in” culture plays an important role in fiscal resolutions. This kind of culture encourages leaders to monitor their financial performance and honor their individuals to collectively orchestrate creative and voluntary budget cuts to avoid extreme job loss.
Before the 2020 global lockdown, Margaret Barr and George McClellan wrote in their book Budgets and Financial Management in Higher Education that improved fiscal performance results from responsibility center budgeting (RCB). However, the RCB method can lead to the stratification of departments and academic units. This sense of stratification – real or imagined – distracts institutional leaders from entering the budgeting process with a spirit of collaboration because of their underlying sense of competition and division. Additionally, RCB lures leaders into budgetary behavioral patterns that drift from the institutional strategic plan and towards decisions that only benefit their specific department. Barr and McClellan’s concepts are not new but remain relevant even after the world has been turned upside down by a global pandemic.
The post-pandemic reality is that higher education leaders must transform the budgetary culture and adjust fiscal behaviors to survive a constantly evolving worldview towards college degrees. Our next post takes the reality of constant scrutiny and looks at new metrics to pivot budgets toward student success.
References
Barr, M. J., & McClellan, G. S. (2018). Budgets and financial management in higher education. John Wiley & Sons.
Evans, A., & Chun, E. (2012). Creating a Tipping Point: Strategic Human Resources in Higher Education: ASHE Higher Education Report, Volume 38, Number 1 (Vol. 38). John Wiley & Sons.
Toner, M. (2024). Budgeting Approaches to Achieve Strategic Sustainability [Article]. International Educator (1059-4221), 1-9.