Wednesday, July 13, 2011


Academic and Financial Officers

Sometimes I think I’ve been blessed. At my college, the academic and financial sides of administration work well together. This is not a universal condition, nor has it always held throughout my career.

Based on having seen the relationships work and not work in various places, I have a few suggestions for a successful working relationship.

Obviously, the first is mutual respect. The academics need to understand, in a more-than-theoretical way, that institutions have to make payroll. Discussion of budgets cannot be out of bounds, and it cannot be taken as just another excuse to say ‘no.’ Money spend on initiative A is not available for initiative B, and saying that is no reflection on the worth of initiative B. It’s just true.

The finance folk need to understand that the college itself is not for profit, and that its point is to provide a public service. While that can’t excuse indifference to costs, it does sometimes mean accepting some money-losing elements to the operation simply because they’re important. The tutoring center, for example, is a major cost center that generates no new revenues in itself; a for-profit would kill it quickly. (Proprietary U didn’t have one.) But it’s essential to the community college mission, so we support it.

The second is a sense of the constraints under which each side operates. The finance folks have to deal with shaky state budgets, unfunded mandates, ever-shifting regulations, and the challenges of a heavily used physical plant, none of which they chose. (Yes, someone chose the physical plant, but that was generations ago. The current folks inherited it.) They get audited periodically, and have to be able to show where the money went. They have to keep some “in case of emergency” money on hand for those times when a water main breaks or the HVAC system goes kaput. Some will demagogue that as a “slush fund,” but it’s actually a sign of good management.

The academic folks have to deal with accreditation and transfer, but also with some fairly unquantifiable -- but still real -- concerns about quality. While a category as broad as that can be used to hide all manner of sins, the category itself is still quite real. An academic administration that can distinguish productive spending from vanity spending will go a long way in building bridges.

I’ve worked in settings in which the two sides regarded each other as adversaries, and it worked to the detriment of the college as a whole. At Proprietary U, for example, upper management routinely referred to Admissions as a “profit center,” and Academics as a “cost center.” That didn't do much to endear it to the faculty, who rightly wondered just what the students were being admitted to.

At some level, some basic education in each other’s realities would go a long way. At my current position, I remember being struck that many faculty didn't have any sense of the difference between a capital budget and an operating budget, for example, so they'd make angry statements along the lines of “you have money for a new building, but not for full-time faculty?” They assumed, falsely, that money available for the one was alternately available for the other, and therefore drew unflattering conclusions about the ethics and/or intellect of the folks in the budget office. Some of them still manage to believe that course releases are moneymakers for the college, which would be amazing if it were true. If you believe that, then of course the only reason to say no to a course release would be meanness. On the flip side, folks on the staff side need to learn to lay off the “summer vacation” comments. They don’t help. And we need to accept that travel is a cost of doing business, and not just reflexively cut it every time the legislature sneezes. Say “no” to someone enough times, and they just stop asking. That is not a good thing.

This isn’t an exhaustive treatment, by any means, but it’s a start. Wise and worldly readers, have you seen effective ways for the two sides of a college to work together?

This is more of a question than a comment, being my (and many other people's, I imagine) go-to guy for the administrative perspective: could you go further into the difference between a capital budget and an operating budget, and why a university can have the funds to build a new building but not to avoid cutting full-time teaching gigs in favour of adjunct positions? Because I'm prepared to accept there's a reason I don't understand yet, I just don't know what it is.
the school where I teach just added a couple of new, expensive buildings, but pays its adjuncts 1/2 the going rate in the area and many departments are sorely understaffed. The frustration isn't because we don't know the difference between the two types of budgets, but because the powers-that-be seemed far more interested in raising money for new buildings they could show of than in taking care of the people already here.

"Sorry, we can't afford to pay adjuncts another $1,000 a year. But enjoy our new $5 million dollar buildings!"
why a university can have the funds to build a new building but not to avoid cutting full-time teaching gigs in favor of adjunct positions?

There's a couple of reasons, some of which are location specific. For example, where I live, local voters can approve bonds to build classrooms or labs. That money cannot be used for salaries - only for construction. We have lots of buildings now at schools that are cutting sections and struggling to get by. It's sort of crazy making.

Another reason is the nature of the commitment associated with the money. A tenure track line or unionized staff person is yours forever (unless you negotiate lay-offs, which almost never happens with faculty). In addition to their salary, you may pay 40-60% of their wages in benefits and that salary/benefits combo will increase over time (in a unionized environment) based on a salary schedule over which you have little to no control (because it is part of the contract) for 30+ years.

So the difference is this - building a building is a one time expense. It's not much of a risk to say "well - I have $4 million so let's build something." Next year, if times get tough, the building is finished and you don't have to build it again. Additionally you may have received that $4 million from the voters with specific instructions to build that building and may have no choice in how you spend the cash. The voters do not pass bond funds to set up faculty positions. You can shut down the building and not use it and your plant costs are minimal so the building’s contribution to your total operation costs can be limited at will. Right now, there’s also stimulus money being spent on construction in my area – again, those funds will expire so you wouldn’t want to count on them in building your operating budget.

Tenure track faculty lines add to the overall annual cost of doing business. They represent a long term commitment that most colleges are in no position to make at the present time. Adjuncts are different – because again, if times get tough, you can lay them off for a semester, no harm no foul – they are the elastic in your budget. That’s why gravity is pulling colleges in the direction they are going staffwise and we are building classrooms that will be empty come Fall because we have no money to pay people to teach in them.
I do get your point that a tutoring center isn't itself any kind of profit-maker, but wanted to add that when I worked at a for-profit, the tutoring center was seen (correctly) as a necessity to prevent attrition and keep graduation rates respectable. 2YC's tutoring center also provided supplemental income for adjuncts, which we appreciated. (Wow, I'm so glad I don't work there anymore.)
Financing institutions is a problem that can’t be easily solved. Investment in education boosts economic growth and employment and affects the future prosperity of the nation as a whole. Educational institutions are mainly funded by students and their parents, employers from the private sector, government tax revenue or they rely mostly on private donors. Some number of institutions are funded through loans and this Canadian payday company might become one of those funding sources.
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