UNIVERSITY BUDGETING.   Term Paper ID:26217 Click to get this paper

Essay Subject: Economic impact of decentralization, selection of best method of budgeting, goals, revenue responsibility, priorities.... More...

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Paper Abstract: Economic impact of decentralization, selection of best method of budgeting, goals, revenue responsibility, priorities. Paper Introduction: UNIVERSITY BUDGETING Universities are pressed to manage their limited resources wisely. Compounding a university’s problem of having to do more with less is the fact that the general public and countless policy makers are demanding higher levels of performance and credible methods of ensuring accountability. In an effort to encourage the development of high quality universities and their departments, various systems of resource allocation that combine budgeting and accountability have been proposed. The traditional top-down method of budgeting in universities is falling into disfavor, much like most other hierarchical methods of operation in the for-profit and non-profit sectors. Decentralization is in vogue. Decentralization has a few arguments on its side: it places decision making square Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Heportrays professors as though they are children at Disneyland: "Gimmee,gimmee!" He asserts that absent the responsibilities of producing revenue,generating grants, or containing costs, professors have an attitude ofentitlement and will leave the university if their desires are notsatisfied (Massy, ed., 1996, pp. The same can be said for many other professions, but it cannot besaid for teaching as a profession. Decentralization has a few arguments on its side: it places decisionmaking squarely in the hands of those who must implement the decisions,hopefully making the decisions/changes relevant and appropriate to thecircumstances; it encourages investment ("buy-in") by those who will beresponsible for implementing the changes; theoretically, it utilizes theknowledge and expertise of persons who are in a position to know what worksand what does not; and it incorporates the values and wisdom of a largerbase of diverse persons, as opposed to decisions/changes always being areflection of the same persons with the same values. Most human beingsenjoy having their opinions solicited and their expertise utilized onbehalf of something about which they care. 27). Performance based budgeting also distributes tuition and researchfunds as separate funds. In short, if theDepartment of Education's faculty expenses, supplies, and special programstotal $1 million dollars, then, theoretically, it should receive$1 million dollars. As long as the education department'sbudget is based on its specific enrollment, its piece of the pie will notnourish a healthy and growing department. Assuming that decentralization is the desired method of operating,the only question remaining is which method of budgeting is in the bestinterest of schools of education: lineitem budgeting, performance based budgeting, revenue based budgeting, orvalue based budgeting? Ifteaching was a prestigious, high-paying, or "sexy" profession, then schoolsof education could anticipate high levels of enrollment. 168). Maybe Massy is correct and this is the way it is at universities withtraditional, hierarchical, line item budgets. High enrollmentnumbers would equate to more zeroes before the decimal on the bottom lineof the budget. InCalifornia in the 197 's there were fewer available teaching jobs thanthere were credentialled teachers; while not a boon for individuals seekingemployment, it was a boon for schools of education. On the other hand, line item budgeting, or its variants, "usesformulas to determine the level of each expenditure type (e.g., numbers offaculty, expenditures on staff and supplies) according to studentenrollments" (Massy, ed., 1996, p. Massy (1996) goes on to argue that line item budgeting, with itsvarious built-in assumptions, "transform resource allocation from anexercise in investment, where scarce resources are put to the best possibleuses, to an exercise in coping and conflict management" (p. The reality is that the more prestigiousor revenue-producing departments will be higher on the administration'slist of priorities and the school of education may be treated like thecountry cousin. 29). (1996). Wits have declared that a budget is simply a plan to live beyondone's means or a method of saying "no" to somebody's request to spend moneybefore they have asked for it. 297). Value responsibility budgeting assigns tuition and fees to eachdepartment based on the actual number of students majoring in that subject. It receives as much money as it needs in order toretain high quality teachers and provide a high quality learning experiencefor those few souls willing to embark on careers in education. On the negative side, decentralization places a greaterresponsibility (read that, burden) on persons who may already be strugglingto find enough time to do what needs to be done in their professional andpersonal lives and the system demanding the extra time commitment rarelyoffers compensation for the extra time required; though democratic in itscommitment to value all opinions equally, it does so without regard to aperson's level of expertise or knowledge, meaning that the person who istruly knowledgeable must have solid communication skills in order toinfluence or persuade the group; in convening a diverse group of persons,time is required to bring everyone "up to speed", most shorthand orconversational abbreviations must be avoided or explained, and individualvalues and differences require that the group invest time in learning howto understand and communicate with each other; and it opens the door forpoliticking and self-interest on an ongoing basis. The problem withsubvention as a safety net for a department of education is that it must berealistically set to "reflect history, priority, and ability to change"(Massy, ed., 1996, p. If so, then a line itembudget created through a process of decentralization, namely, departmentalresponsibility for preparing the actual budget and some measure ofresponsibility for raising funds and grants; buy-in for cost containmentmeasures; and sharing of department budgets with all other departments, maybe in the best interest of schools of education. Despite the fact that every argument for decentralization can becountered with an equally convincing argument against it, decentralizationis not only the trend of the moment, but it makes sense. Business psychology informs usthat most workers work more productively when they understand the ins andouts of the company; presumably, university professors are no different.Add to this the fact that tenured professors are expected to act likepartners in the firm and it is clear that universities are ripe fordecentralization. Bycomparison, the medical field may be filled with equally altruisticindividuals, but their futures are filled with the promise of respect andmoney. Budgeting involves predicting, creating, or influencing the futureand in higher education the future is rife with the implications ofthinning revenues and tighter departmental belts. The problem with each of the three above-described methods is theirreliance on the total number of students enrolled in each department. The traditional top-down method of budgeting in universities isfalling into disfavor, much like most other hierarchical methods ofoperation in the for-profit and non-profit sectors. In an effort to encourage the development of high qualityuniversities and their departments, various systems of resource allocationthat combine budgeting and accountability have been proposed. Budgets, when createdintelligently, do not exist in a vacuum, consequently, some social factorsshould influence budgets. Student enrollments, as Iunderstand it, means all students enrolled in the entire university, notjust those students enrolled in the department. 31). Regrettably, the formulas for funding in threeof the four above-referenced methods of budgeting rely heavily on thenumber of students enrolled in each specific department, clearly puttingtoo much emphasis on one particular social factor: the desirability ofteaching as a profession. 3 -31). Implicit in the word priority are the valuesof those setting the priorities. 17 ). The reality is that teaching and its related fields arefilled by persons who are willing to sacrifice money and prestige for thedeep satisfaction of contributing to the lives of their students. Budgeting is the quantitative expression of anorganization's mission and it forces the organization to set goals.Budgeting is also a relatively unpleasant and usually dreaded process.Yet, hopefully, everyone involved knows that an organization must budget inorder to make its funding as efficient and long lasting as possible. In reality, a budget is the monetaryexpression of a plan of action and it aids in controlling and authorizingtransactions. It also assigns some of the revenue from students who are not majors inthat particular subject but are taking courses in the department ((Massy,ed., 1996, p. This is beneficial for a schoolthat goes in and out of favor, such as a school of education. Those days have yet tobe repeated. This can be beneficial for schools of education,which presumably conduct less research than schools teaching the sciences;however, the formula forallocating funds begins with an estimate of the number of students who willenroll in the department. Resource allocation in highereducation. 226). Granted, in the revenue responsibility system there is a safety netcalled subvention, which is a "discretionary allocation to account for thedifferent unit costs of different program activities," therefore, "if aparticular department suffers rapid loss of student interest andincome...the central authority can help phase the impact by increasing thatdepartment's subvention" (Massy, ed., 1996, p. UNIVERSITY BUDGETING Universities are pressed to manage their limited resources wisely.Compounding a university's problem of having to do more with less is thefact that the general public and countless policy makers are demandinghigher levels of performance and credible methods of ensuringaccountability. Decentralization is invogue. Funds are "calculated incrementally on a field-by-field basis within each institution" and issued as a block grant to theuniversity (Massy, ed., 1996, p. MI: The University of Michigan Press. REFERENCES Massy, William F., Editor. Revenue responsibility budgeting distributes tuition and researchfunds as separate items. One of the highlights of line item budgeting is a concept labeled"property rights": "Once an operating unit has obtained approval for aprogram, that program has a right to continue unless circumstances changedramatically" (Massy, ed., 1996, p. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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