Financial Affairs

I have seen a lot of Universities in this long career but to date, there does not exist a University that does not complain about it's finances. Of course, some complaints are justified, while others are not but who can see the difference if people just complain about everything all the time.

1. The first location to look for income to any educational establishment is if it has support from the government. Some governments including ours support some of the Universities in full or in part according to the criteria followed in distributing support. In the UK for example, support is distributed based upon a specific set of criteria that earns the University the right for an amount that they are awarded by government.
2. Students represent the second largest contributors to a University's budgetary system and although many neglect this fact. What we're talking about here of course, is student fees, where students pay for every hour of instruction or credit hour they are likely to gain at the end of the semester.
3. In addition to the above, Universities also resort to eliciting additional fees for extra services, like library support fees, electronic services fees for students who will use these systems, registration fees, transcript printout fees, late book return fees, etc. Although they seems small they do end up supporting the various services that are offered in return for these fees and frequently this is done in a non profit basis. For example, when a fee is calculated for library use, it will probably be based upon the University budget allocation for the library divided by the student population number, so it should not be surprising if it ends up being only 1BD per student per semester. Use of electronic systems however, is usually higher because the cost of equipment is depreciated over a usually period of 5 years, but this too is usually calculated such that it ends up to be a reasonable number.
4. Other sources of income include renting out space on campus for outsourced services, like restaurents, a stationary shop perhaps, the bookshop, etc. The cost of rental, versus kind of service, versus space required will determine the amount requested from this non operational income.
5. Last but not least, a source of income to the Universities is contributions. It is quite common for well known Universities to establish close ties with the private sector and industry specifically those who recruit the University's graduates. If a company for example, recruits ten graduates each year, and then trains them to prepare them for the workplace that this same establishment may be interested in establishing a training center on campus, so that the new recruits come prepared. This will benefit all students who learn at the center and not only those who end up working in that company because class sizes are rarely 10.

Perhaps what makes a University atmosphere challenging is that there are money generators like the various deanships that attract a large number of students and there are non generating centers like those who provide services without covering their cost, like admin and finance. Therefore we may ponder a number of solutions to the financial supervision of the operating vs non operating expenses.

1. One possible solution is to move away from a centralized badly run system to one that is actually run by a financially qualified individual (not an academic). It should not be a shock, because academics teach, and do research, and these activities do not help them gather any experienced in running this type of office. That experienced is only gained by doing the actual job.
2. Another possibility that could be implemented with the first is to establish cost centers and sinks. A cost center, for example, a department, will be able to calculate how many instructors it has, what the total cost is and deduct that from the total income generated by the department, either through the government grant (based upon the number of students) or through student registration fees or additional fees. This will quickly help the management identify any departments that are not performing well and to investigate how matters could be improved. If the department is a sink, then it has no income that could be improved and can only be assessed by the central financial affairs people who will weigh all income with all costs.
3. Comparative statistical analysis is always important. It is never beneficial to ask for more money without first running a detailed comparative study of institutions of the same rank, around the world to identify where the deficiencies exist and how much of a defiency it is. In other words, even future needs and increases to fees must be calculated not only based on what people think, but documented information of the actual costs incurred by the institution and the fees charged in comparable institutions. So any future requests to government for increasing support must be properly documented with the names of reasonable Universities like the University of Cyprus (average salary for an assistant prof is equivalent to BD1500), not like MIT (I wouldn't dare check this figure) for example.

Perhaps my thinking is a bit off the beaten track in this country but I do not believe in remissions. I do believe in scholarships, so if a student does not have sufficient finances to support their studies at our mythical University then they will apply for a scholarship, and if they get it, then they will ensure that for the full duration of the scholarship and these are usually limited in years according to the program of study, things will not change and they will not be asked to pay fees. This system exists in many Universities around the world and reduces the overhead on both students and administration staff to check and recheck student status. It allows students to concentrate on their studies once they get that scholarship which they only risk losing if they end up on probation.

I sometimes wonder if people know the meaning of the word. All buildings, computers, equipment, must undergo costs analysis for depreciation. This would allow the administration to get a global view of the assets including the fixed assets and take asset replacement into account when preparing future budgets.