Higher ed administrators lack confidence in campus finances
- 75% of college financial executives feel that they do not have confidence in their long-term financial planning, as schools face increased challenges on meeting expenses and generating revenue, according to a new study conducted by PFM Solutions at a recent WACUBO conference.
- The results were generated from interviews with more than 100 higher ed financial and administrative leaders, with researchers finding that 68% of those questioned considered the financial future of their institutions to be “problematic,” and 56% describing the process for long-term strategic planning as “problematic or burdensome.”
- Many also admitted difficulty in trying to plan for unknown future scenarios, while 24% found a lack of advanced modeling tools to be an issue, and 22% found the lack of complete financial information to be a problem, while 21% felt they relied too heavily on Microsoft Excel.
Higher ed financial administrators and college presidents are increasingly facing a fractured industry, as revenues continue to decline along with enrollment. It is not altogether surprising the financial administrators would feel more pressure and uncertainty in this new environment, as the advent of online learning and stiffer competition offers less stability than before. However, the uncertainty and inexperience can have real consequences, as the College of New Rochelle is discovering. A controller who was installed in 2016 found that the college’s liabilities exceeded its assets by $22.6 million in the 2015-2016 school year, with a deficit of almost $16 million by the end of 2015.
As colleges increasingly consider presidents from outside of the conventional academic pipeline, it would be prudent to make sure that a school’s financial team is not predicated solely, or even primarily, on familiarity with the college or university. A recent Aspen Institute report suggests more direct first-year support for college presidents, and similar support could also be beneficial for controllers or other financial administrators, particularly if they have a financial background from outside the campus.