One Way is Not Enough: Multidimensional Financial Management

in Continuing Education

Presented byDr. Barbara AudleyExecutive DirectorExtended Education and Summer ProgramsWestern Washington University

Management Structure

Person who can focus on the over-all financial health of the organization

Professional accountant Experience at a high enough level to

understand the over-all operation Auditing view

A Short Accounting Lesson

Fund Accounting– A beginning balance

--New expenditures

+ New Revenue

-- An Ending Balance

And…

Enterprise Accounting + Revenue

- Expense

Net Balance (+/-)

So…

Live in the Fund World Do Business in the Enterprise World

Rule-Makers

AICPA NACUBO WACS University Policies

Enterprise Systems

Banner PeopleWare SAP

Challenges

2 Systems of Record-keeping 4 Systems of Rule-making An institutional computer system focused on

one system of record-keeping Financial viability requiring the alternate

system A lack of understanding of the need to know

in a different format

How to Proceed

Always balance to the University’s accounts Design reports to meet your needs Develop consistent procedures to report data Customize reports to management and

program needs

EESP’s System

Summary of Funds in Fund Accounting Terms– Beginning balance– Revenue– Expenses– Ending Balance

Monthly

Sample Report

Program Reports

By program/site By programs of the same type

– e.g., Elementary Education– Non-credit certificates

By sponsor– e.g. College of Education– Continuing and Independent Learning

Sample Report

Some Highlights

Annual Budget EESP Share off the top Monthly activity and year-to-date Semi-annual re-evaluation after December

closes

Annual Budget

Based on enrollment projections—conservative

Based on prior year expenditures—add inflation

Adjusted for any forecasted major changes 5% contingency

Annual Budget Sample Report

Program-specific Reports

One site/multiple programs One program/multiple sites

Program-specific Reports (sample)

Overhead Accounts

Segregate EESP costs from program costs Transfer revenue from programs to overhead

costs

Revenue-Sharing

EESP charges a support fee to co-sponsored programs

Zero out at year end Various models:

– 20% of gross revenue– Sliding scale based on enrollment– 15% of gross revenue– Negotiated

Based on services provided

Program Reserves

Program Reserve Program Development Reserve – new

projects Disability Reserve –

Management Strategies

Programs evaluated based on current year activities only

Ending balances transferred to reserve accounts

Enrollment Reports

Show problems at beginning of cycle Provide picture of whole operation Identify trends before financial impacts

obvious Identify gaps in services Quarterly with comparisons and annual total

Enrollment Reports (sample 1)

Enrollment Reports (sample 2)

Forecasting

A work in progress Students do what they will A mature structure Challenge: to determine revenues necessary

to cover existing costs Turn into data that non-financial program

managers can use and implement

Break Even Analysis

The Next Step

Trend analysis useful here Over time what is the average credits per

student enrollment for each program, each site

Again, information in a form non-financial managers can use

Builds in student behavior

Questions?