Issue link: http://www.e-digitaleditions.com/i/61380
Balancing the B ly guaranteed higher education.Meanwhile, in the U.S., schools are facing mounting criti- cism over skyrocketing tuition fees while coping with dwindling government subsidies. Business schools aren't immune to this global budget crunch. And, yet, even as their Higher education institutions the world over are facing an escalating fiscal crisis. In Europe, for instance, governments are buckling to cover the mounting costs of social- budgets tighten, b-schools face one of themost competitivemarkets formanagement edu- cation in years. The price to compete is substantial and includes the cost of new buildings, technology, curricula, and faculty. This spending spree has leftmany business school deans asking the same question: Where will we get the money? James Johnson, management analyst in the Economic Model Office for Indiana enrollment, downsize faculty, or even raise tuition. A close look at a budget's structure, objectives, and limitations may, however, help schools avoid these cutbacks of last resort. Innovative budgeting is more than balancing income with expenses, say experts. In many cases, it's not a matter of spending less in a budget—it's a matter of spending differently. Comprehensive Accounting Even with the best of budgeting intentions, a business school is often burdened by "fund accounting," in which individual resources must be allocated directly to particular projects. A donor might require, for example, that her contribution be spent only on entrepreneur- ship or a new trading room. When a school must account for multiple funding sources, it often views them as separate entities. It then becomes easy to lose track of the whole pic- ture, says GaryMatkin, dean of continuing education at the University of California Irvine (UCI) Extension and author of Using Financial Information in Continuing Education. University-PurdueUniversity Indianapolis (IUPUI), notes that fiscal pressures on business schools are growing more intense. "Business schools don't get as much subsidy support as, say, a school of nursing," he says. "Yet business schools are also growing, going online, and expanding globally. That requires some dollars, somost business schools are bumping up against their capacity to fit these projects within their budgets." Under these circumstances, an academic CFO's first impulse may be to slash student Business schools that take creative, comprehensive approaches to budget 26 BizEd MAY/JUNE 2004