The state-of-the-art of financial analysis-for academic units withi.a 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 iosts need to be measured; cost has both fixed and variable elements n relation to the number of students or faculty in an academic unit; n some analytical models, the revevae 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 enrolln,ent and consequently revenue and expenditures that vary according to enrollment. Relating cost to Aquality, or fiscal efficiency to program effectiveness may result in misuses of quantitative data. A bibliography is appended. (SW) *********************************************************************** * Reproductions supplied by EDRS-are the best that can be made * * from the original document. * *********************************************************************** 1981 Financial Analysis firAcialemk-Units Donald L. Walters U.S. DEPARTMENT OF EDUCATION NATIONAL INSTITUTE OF EDUCATION EDUCATIONAL RESOURCES INFORMATION CENTER (ERIC/ I/hes document has been reproduced as received from the person or organization originating it C3 Minor changes have been made to improve reproduction quality. Points of view or opinions stated in this docu ment do not necessarily represent official NIE position or policy

Financial analysis for academic units

The problem of the study was to develop a mathematical model of the indirect cost of continuing education in a Maryland community college. The model, which was simulated on a computer, determined indirect cost over a fiscal year, provided indirect cost information for subsequent years, and examined the behavior of resource consumption. Development of the model focused on one institution, Wor-Wic Tech Community College, which is located on the Eastern Shore of Maryland. The introduction to this dissertation outlines the study problem by presenting a brief review of the role of continuing education in the Maryland community college system and the relationship between the management of continuing education and cost analysis. A review of related literature and research follows the Introduction and was designed to continue the outline of cost analysis and to present a systems approach to modeling. The review addresses the relationship between management science and strategic planning. Although the study resulted in one indirect cost model, two models were used to examine the indirect cost system for the continuing education program at Wor-Wic Tech Community College. One model was based on the assumption that indirect costs could be calculated from an enrollment ratio. The second model allocated indirect costs from a set of cost pools. A comparison of the simulation results from the two models showed that the assumption model produced overinflated indirect costs. Consequently, a final model which allocated the indirect cost of the continuing education program at Wor-Wic Tech Community College from cost pools was constructed and simulated through the Year 2000. It was found that the continuing education program generates substantially lower indirect cost rates than the regular credit program. The study concluded with recommendations for application of the indirect cost model within the planning and management structure of the College. A DYNAMIC MODEL OF THE INDIRECT COST OF CONTINUING EDUCATION IN A MARYLAND PUBLIC COMMUNITY COLLEGE by Walter James Yurek A thesis submitted in partial fulfillment of the requirements for the degree of Doctor of Education MONTANA STATE UNIVERSITY Bozeman, Montana

A dynamic model of the indirect cost of continuing education in a Maryland public community college

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Application of management theories in the development of criteria to assist in solving identified perceived problems of the chief business officer in selected university medical centers

Jack B. Jordan

Papers

Model Provides a Method for Putting Costs in Their Place.