What board are doing and not doing in reviewing institutional costs

Wellman, J. (2007). What board are doing and not doing in reviewing institutional costs. Retrieved from http://www.nacubo.org/documents/research/WellmanWhatBoardsWeb.pdf.

Higher education finance topics tend to focus on rising tuition cost, decreased funding in financial aid and decreased funding in state appropriations (Wellman, 2007). While these issues are relative and important, a more important topic is how colleges and universities are spending their money. Cost management without comprising quality and access is just as important as rising tuition rates. Cost management can mean making informed decisions about spending based on data (Wellman, 2007). While governing boards play a primary role in strategic planning and oversight, it is unknown how they oversee actual costs, whether they are playing an effective role and how their effectiveness can be improved.  

The College Project conducted a study using focus groups and interviews with board members and college president's about the role of the board in relation to cost oversight (Wellman, 2007). The study revealed that college presidents and board members are highly concerned with funding trends and with more board involvement will strengthen accountability for cost management (Wellman, 2007). Although the presidents want to see more involvement, they do not the board consumed by the accounting side of spending.

It is important for colleges, universities and boards to take a closer look at spending. With appropriations being cut every year, they need to look at better business practices and doing more with less. Cutting costs does not mean cutting quality. There are ways to maintain quality while still cutting costs. Such ways include being transparent, identifying tradeoffs, being open and patient in analyzing costs and spending, developing benchmark data and involving every stakeholder involved in the decision making process (Wellman, 2007).