Financial stewardship by college governing boards too often stops at balancing the budget. That was the message two finance experts presented last week during the annual meeting of the Association of Governing Boards of Universities and Colleges. Furthermore, the yearly budget exercise can give trustees a misperception of their institutions' fiscal health, said Thomas C. Longin, one of the presenters and a longtime consultant for colleges and the association. That's because many colleges have become adept at just surviving year to year, without conducting longer-term strategic financial planning. "If we get fixated on balancing the budget, we will never have any control of costs," and that will lead to higher tuition and deteriorating academic quality, Mr. Longin told trustees. "If you simply focus on getting out of the hole you're in, you'll just get in deeper." The solution, said Mr. Longin and his co-presenter, Richard Staisloff, vice president for finance and administration at the College of Notre Dame of Maryland, is for boards to shift their financial attention to strategic monitoring of how their institutions invest "time, talent, and treasure" over the next three to five years. Mr. Staisloff's "magic formula" for evaluating a college's financial health is "mission plus net revenue equals success." The two experts described several financial tools they said were critical for better planning. They included the following concepts: (1) Planning Tools; (2) Net revenue modeling; (3) Financial ratios; (4) Strategic and dashboard indicators; and (5) Demand and yield.