Archibald and Feldman (2011) stated that current funding practices for public institutions often create a "use-it or lose-it mentality" (p. 242) when it comes to remaining funding at the end of fiscal years. Most public institutions receive state funding at the start of the fiscal year, and at the end of the fiscal year remaining funds are typically not able to be carried forward into the next fiscal year. As a result, many colleges and universities have created a culture where administrators, faculty, and staff rush to spend all remaining monies at the end of the fiscal year (Archibald & Feldman, 2011).
From past experiences, the institutions and its individual departments are not rewarded for being fiscally prudent and having money remaining at the end of the fiscal year. Instead, those funds are taken away as the year comes to a close, and they may not even be granted as much funding for the next year if they did not "need" all that was granted that year (Archibald & Feldman, 2011). Hence, this cycle contributes to the cost disease in higher education.
The frivolous spending at the end of the fiscal year could be curtailed public institutions were granted permission to move remaining monies into an emergency-type fund for unanticipated future needs. These saving habits could benefit both the institutions and their students as economic climates and funding fluctuates (Archibald & Feldman, 2011).
Reference
Archibald, R. B. & Feldman, D. H. (2011). Why Does College Cost So Much? New York, NY: Oxford University Press.
Carry forward dollars are a challenging issue. As you state some institutions don't allow departments to carry forward budget and thus they rush to spend all the money at the end of the year. Many do that because the prior year's budget is the basis for the next year's budget. Other institutions allow for carry forward or a percentage of left over budget can be carried forward. Many departments want to keep their carry forward because they claim their budgets have been reduced and they use carry forward from prior years to cover current year needs. If you roll up carry forward for an institution, it can add up to millions. It's hard to
ReplyDeletejustify the need for additional money when an institution has millions left over. However many do not want to give back carry forward for fear that their budgets
will be reduced the next year. Edwina T. Washington