Breaking the Norm: Revitalizing Higher Education Finance for a Deficit-Free Future
Optimizing Financial Management in Higher Education
In higher education, breaking even or maintaining “manageable” deficits is often the accepted norm. However, this mindset perpetuates sub-optimal financial practices. Statements like “spending decisions are best managed locally,” “every unit deserves its share of operating and turn at capital,” and “we should consume what we have available now” only reinforce laissez-faire financial management. Even in times of fiscal abundance, these practices can create or exacerbate financial challenges.
Common Financial Management Issues in Higher Education
- Lack of Clarity: Schools and units may not fully understand their financial performance and its impact on the institution.
- Unchallenged Spending: There is often little scrutiny over spending increases or unspent prior year funds.
- Disjointed Program Agendas: Initiatives may be developed without considering institutional priorities, leading to sub-optimal investments and missed synergies.
- Territorial Leaders: Local leaders might lack the data, skills, or resources to make optimal financial decisions.
- Siloed Processes: Administrative processes often operate in silos, causing cost, speed and quality issues and hindering cost management efforts and improvement opportunities.
Institutions frequently resist changing their financial management practices due to concerns about scrutiny and criticism from trustees and stakeholders, resistance from faculty and staff and the high costs and prolonged duration of consultant engagements promising unrealistic savings. Additionally, there is often a fear of disrupting programs and established business practices. However, our experience with top universities shows these challenges can be overcome.
How A&M Can Help
A&M’s higher education team partners with institutional leaders through an intensive collaboration model, providing end-to-end hands-on support in project planning, problem-solving, implementation and governance. By leveraging A&M's experience and innovative approach, your institution can overcome historical financial challenges and pave the way for a prosperous future.
Connect with Managing Directors Erin Covington and John Jibilian today to schedule an assessment and discover how we can transform your institution's financial management with A&M’s proven strategies and expertise.
