Slike strani
[ocr errors]

place expenditures for the maintenance of physical plant under such items as repairs and replacements, upkeep, wages and operation, labor, and similar divisions. There are 29 institutions which have adopted “ current expenses as a division in their budget while in other cases expenditures of this character are classified under a variety of headings, including supplies, general expense, sundry, and miscellany.

Similarly it is found that the budget of but 30 institutions make a distinct segregation of the item of “ equipment,” the expenditures made by the remainder being placed under “ academic expenses.” in some instances, under “instructional costs” in others, and under “ upkeep of plant” in several additional cases. As a general service branch of the institution it is important that the library, including expenditures for books and periodicals, appear as a separate department in the budget. Thirty-two institutions have segregated the library under a single general item. In other cases, the library expenditures are found among other classifications of expenditures including “ academic salaries and expenses," "instructions and research." “ Capital outlay” is given as a classification heading in the budgets of 25 institutions of which 20 have subclassifications for lands, 25 for buildings, and 12 for other capital outlays, such as roads and similar major improvements. Capital outlay is omitted from some of the budgets because these expenditures represent special appropriations made by the State legislature.

It is evident from this brief presentation that the budgets of many of the land-grant colleges are at wide variance. This is due chiefly to the failure of the administration to harmonize budget classifications with accounting classifications. The result is that two systems of handling financial records are operated in the same institution, a situation causing duplication of effort, wasted energy, and unnecessary labor. Another disadvantage is the fact that any attempt to collect accurate data on the cost of different functions and activities from the entire group of institutions is a futile undertaking. The overlapping of items of expenditures in the various accounts prevents any comprehensive compilation. Notwithstanding the situation just described, the internal operations of the budget have been placed on a satisfactory basis in many institutions. The organizations submitting estimates and receiving appropriations under the budget are made up of functional units in most of the institutions, such as the college, school, experiment station, extension service, or other coordinate service.

The annual budget, of course, coincides with the fiscal year but the land-grant institutions do not have a uniform fiscal year. This difference is primarily due to the varied practice of States for the land-grant institution must follow the State fiscal year. There are 27 institutions with the fiscal year beginning July 1; 2, September 1; 2, October 1; 1, June 1; 1, March 1; and 1 December 1. The University of Illinois with a fiscal year beginning July 1, makes its expense budget become effective July 1 and the salary budget on September 1. The need for such an extraordinary budget plan is difficult to comprehend. Of the colleges operating their budgets on a biennal basis, two begin on January 1 and one on July 1. One university reported that its budget becomes effective when the money is appropriated.

The date of completion of the annual budget is important. In order that the new budget may take full advantage of the current year's experience it is desirable that the date of its completion be as near the end of the current year as possible. It must, however, be early enough to permit employment of teachers for the next academic year. Institutions with a fiscal year beginning July 1

. usually have their budgets completed by June 1 and are filling vacancies for the coming fall. It therefore behooves institutions with fiscal years beginning later than July 1 to complete their budgets more than a month before the beginning of their fiscal years if they expect to compete on even terms for the available teaching talent. Among the land-grant institutions, 10 adopt their budgets one month before the beginning of their fiscal years, 2 one and one-half months before, 11 two months, 1 two and one-half months, 11 three months, 1 four months, and 1 six months. It is apparent that some are completing too early and some too late.

The first step in the making of a budget is the determination of the available income. The land-grant colleges receive annual or biennial appropriations for their support from State legislatures, and there are other sources of income, such as student fees, departmental sales, and service enterprise and trust fund income, which are not definitely known in advance. It is necessary, therefore, that an estimate be made of this class of income. Much of the success of budget administration depends upon the accuracy with which this income has been estimated. Because of his complete knowledge of the financial affairs of the institution and his thorough acquaintance with every detail of business operation, the business officer is, undoubtedly, best qualified to make this estimate. An examination of the returns on this subject reveals the fact that the chief business officer makes the estimate in 26 universities and colleges, but in the remainder this function has been assigned to other officials. The president determines the budget income in six institutions. In one university it is estimated jointly by the president, business manager, and the State tax commissioner. Another institution reported that the income is determined by the accountant and in the case of another the heads of departments estimate the income from revolving funds, which added to the State appropriations make up the total budget income. Four universities made returns to the effect that the income is determined entirely by legislative appropriations, an unusual situation in view of the fact that institutional revenues should not be omitted from consideration in any well-organized budget system. One institution supported by a millage tax bases its budget income on an estimate of the previous year's receipts from this source.

The procedure followed in the compilation of the budget is of importance if the administration of the budget is to be successful. The department heads and deans who must operate under the budget and the business officer who must administer it should play important parts in its preparation. The department head should initiate his own budget requests and the dean should coordinate and revise the budgets of his departments so that the whole presents a well-balanced financial plan for the operation of his college. The departmental budgets revised and coordinated by the dean and representing the best judgment of all concerned should be forwarded to the business office. The business office and the president's office should, after consultation with the several deans, mold the requests into a financial program for the institution. In this review of college and departmental requests, the president's office should concern itself chiefly with the instructional salaries and the business office with the clerical staff and allotments for supplies, expense, and equipment.

Reports received by the survey indicate that the heads of the departments in 30 institutions follow the logical procedure of submitting their budget estimates to the deans or directors of the divisional organizations. But in two instances, the Connecticut Agricultural College and the University of Vermont, the unusual procedure is found of having the department heads present the estimates direct to the business officer, the deans or directors apparently being given no voice in the preparation of the budgets for their divisions. A more anomalous situation is disclosed in six other universities and colleges where the budget estimates of the heads of departments are submitted to the chief executive, neither the deans nor the business officer having an opportunity to participate in their compilation. The institutions adopting this procedure are the Georgia State Agricultural College, University of Hawaii, Massachusetts Agricultural College, Massachusetts Institute of Technology, Mississippi Agricultural and Mechanical College, and Montana State College.

Various other inconsistencies are likewise found in the handling of the budget estimates in the colleges after they have reached the offices of the deans or directors from the department heads. The returns reveal that in 17 institutions the deans submit their budget estimates to the business officers, while in 20 other cases they are sent to the president without the business officer reviewing them. In a number of these cases, however, the advantages of a review by the business officer is not wholly overlooked, since the president forwards the estimates submitted to him by the deans and directors back to the business officer for preparation of the budget. That this is the case is evidenced by the fact that the reports show that in 33 institutions the business officer completes the budget and presents it to the chief executive. In the final step the president submits the budget to the entire governing body in 21 institutions and to a committee of the governing board in 15. No information was furnished regarding the lines of procedure for handling the budget by four institutions.

An advantageous arrangement in budget-making is to make tentative lump-sum allotments to the various divisional organizations of the institution before the detailed work on the budget is started. By this system deans and directors are given a conception of the probable appropriations for their divisions and are enabled to compile their total estimates to correspond in a measure with them. Such tentative allotments avoid the necessity of wholesale slashing and cutting down of divisional estimates in the final completion of the budget. It is important in this connection that this tentative allotment be based on known needs and be not an allocation of new additional funds on the same relative basis as old funds. Reports of the universities and colleges indicate that in only 15 institutions is the plan followed. Of this number the tentative lump-sum allotments are made by the president in 14 and by the governing board in 1. All of the land-grant institutions might simplify their budget preparation difficulties by this device.

One of the major questions involved in the preparation of the budget is the determination of the validity of requests for additional personnel and salary increases. The survey made an attempt to ascertain the methods employed by the different institutions in this phase of budget-making. In the presentation of requests for additional personnel, validity is determined in 11 institutions on the basis of the reports of deans, heads of departments, and other organization chiefs. A different situation exists in the remaining institutions. Their returns show that such requests must be supported by statistical and detailed data on increased enrollment, teaching loads and schedules, and additional service. There are 13 insti. tutions which base the validity of the requests for additional personnel exclusively on increased enrollment or registration, 10 on teaching loads and schedules of the teaching staff, and 3 on additional service proposed for the division. It is evident that all these methods have merit. If increases are to be made in the personnel they should be based on specific and detailed data showing larger registration of students, increased teaching loads, new courses of instruction, and new research projects, rather than on general and oftentimes prejudiced reports of organization heads.

Considerable difficulty was encountered in analyzing the information submitted concerning the methods of determining the validity of budget requests for increases in salaries. In some cases the returns were confusing. The general practice in 14 institutions seems

. to be to base justifications for salary increases upon direct recommendations of the deans and departments heads. The budgets of 16 other universities and colleges require evidence of effective past service, of improved teaching ability, and increased efficiency. Seryice records covering previous training, experience, and other qualifications are also employed. Validity of requests for salary increases in three institutions is determined entirely by definite reports of teaching efficiency while in four others the salaries paid the same rank and grade in other institutions has an important bearing. In a number of universities and colleges there are fixed salary scales, which eliminate the necessity of supporting or justifying salary increases in budget estimates. One institution reported that its retrenchment policy precluded any salary increases.

A budget consists of estimates of income and estimates of expenditures and since the estimated income may not be realized and the estimates of expenditures may not be adequate for some unusual expense, some percentage of the income should be set aside in an institutional reserve for emergency purposes. Twenty-one of the 40 land-grant colleges operating on a budget system provide a reserve

In the others no provision is regularly made for emergency needs. It is the practice of some institutions to set aside a fixed sum as an emergency fund in the budget, one reporting that $10,000 is reserved, another $25,000, a third from $20,000 to $40,000, and a fourth $100,000. In the remainder a certain percentage of the entire available income is set aside. A number of institutions failed to specify the exact percentages, but in the 12 reporting the percentages range from 1 to 6 in all the cases except one which maintains a budget reserve of 20 per cent, an excessively high percentage difficult to justify.

No general changes should be made in allotments after the budget is officially adopted although some flexibility is necessary and minor changes within departments should be permitted with the approval of the business officer and in some cases of the president. A review of the returns indicates that most of the institutions have adopted stringent regulations governing changes in the budget. One institu

111490° -30VOL 1-13

« PrejšnjaNaprej »