ERIC Number: ED214450
Record Type: RIE
Publication Date: 1981
Reference Count: 0
Financial Analysis for Academic Units. AAHE-ERIC/Higher Education Research Report No. 7, 1981.
Walters, Donald L.
The state-of-the-art of financial analysis for academic units within institutions of higher education is evaluated with attention directed to: how the cost of an academic unit is determined, how revenue is identified with academic units, how costs are analyzed, how revenues and expenditures are projected, and how the financial efficiency of an academic unit is evaluated. Based on the literature, it is suggested that: indirect as well as direct costs need to be measured; cost has both fixed and variable elements in relation to the number of students or faculty in an academic unit; in some analytical models, the revenue attributable to an academic unit is measured; costs per student, per full-time equivalent faculty, and per class are measures of unit cost; level of study, method of instruction, and other factors are used to weight data about cost per student; the expected cost of an academic unit may be measured by determining its level of average faculty support and workload; and financial measures may yield important information, but the use of the information still requires discretion. Accounting for revenues of academic units is not as well developed as accounting for costs. Where actual revenue attributable to a unit is not available in the accounts, some form of allocation system is used. Mathematical models, such as trend line analysis and the cohort-survival technique offer means for projecting future enrollment and consequently revenue and expenditures that vary according to enrollment. Relating cost to quality, or fiscal efficiency to program effectiveness may result in misuses of quantitative data. A bibliography is appended. (SW)
Descriptors: Cost Effectiveness, Cost Estimates, Cost Indexes, Educational Finance, Expenditure per Student, Expenditures, Faculty Workload, Graduate Study, Higher Education, Income, Program Effectiveness, Resource Allocation, School Accounting, Undergraduate Study, Unit Costs
American Association for Higher Education, One Dupont Circle, Suite 600, Washington, DC 20036 ($4.00, members; $5.50 nonmembers).
Publication Type: Reports - Descriptive; ERIC Publications
Education Level: N/A
Sponsor: National Inst. of Education (ED), Washington, DC.
Authoring Institution: ERIC Clearinghouse on Higher Education, Washington, DC.; American Association for Higher Education, Washington, DC.