Good Governance at the School Level Rod Kelly Head of Accounting & Financial Markets Derby Business School

Background Qualified Accountant Accredited MBA Have worked as: – Trainee accountant at an LEA – Project accountant for an IHE – HoD at two post-92 universities

Budgeting 101 pt1 The budgeting process involves: – Being realistic when looking at income and expenditure. – Setting attainable targets. – Deciding how best to share out scarce resources. – Understanding that budgets are interrelated. – Set objectives and formulate policy. – Appoint a budget controller. – Ensure that every manager and appropriate staff participate in the process.

Budgeting 101 pt2 The budgeting process involves: – Set a timetable and timescale for the budget process. – Identify the principal budget factor i.e. limiting factor, key factor. – Ensure that budgets are flexible and review the effects of any changes in assumptions made. – Delegate responsibility and ensure that those responsible have the relevant authority. – Monitor progress at regular intervals. – Take into account the behavioural factors.

Budgeting 101 pt3 Problems that can occur in the budgeting process: – Poor communication and lack of participation can cause incorrect perceptions of the organisational objectives and policies. – Personal objectives may conflict with organisational objectives. – Staff may decide not to participate fully and withhold important information.

Budgeting 101 pt4 Problems that can occur in the budgeting process: – Motivation and morale can be affected if the achievement of the budget is treated as success and non-achievement is treated as failure. – Managers can become obsessed with achieving the budget no matter what. – If things do not go according to plan than the budget itself can be blamed rather than focusing on the real reasons.

Budgeting 101 pt5 Problems that can occur in the budgeting process: – Empire building and resource allocation conflicts. – A budget imposed on staff by management without agreement will not be supported. – Optimal budgets for each department can be sub- optimal for the organization as a whole.

Experiences/Issues Staff costs are majority of budget so you need to plan workload. Different disciplines have different problems so one size model does not fit all. Ghost hours. Full Time Staff v Adjunct Faculty.

Experiences/Issues Academic’s not listened to, even when they’re qualified accountants. Top slicing. Over prudence. “Mis”-codings. Full Economic Costing.

Experiences/Issues Coming in under budget = profit? Starving the cash cows. Transparency v management controlling what they can see.