by Patrick J. Borchers
professional training of deans for this part of our work varies widely.
Some (like me) come into the job with relatively little experience;
others have much more. Compounding
the difficulty is that, as far as I can tell, no two institutions have
identical budget processes. So
while budget experience at another academic institution is undoubtedly
helpful, there’s always a great deal of learning to be done at the new
place. With that in mind, here are
some observations about budgets that I wish to offer after four years here at
Don’t Plan on
Delegating it all
tempting strategy, especially if fiscal matters are not your forté, is to try
to assign the responsibility to someone else.
Even if this is possible, it’s not a good idea.
The money issues are just too important to leave entirely to a
delegate. It’s ultimately
impossible for a school to make progress, or even tread water, without
reasonable financial resources. Most
of the school’s constituencies -- faculty, students, alums, others within
the University -- assume that the Dean has reasonable familiarity with law
school finances and is capable of representing the School on these matters.
course, that doesn’t mean that the Dean should be wasting time on
ministerial matters such as having the checks cut to pay ordinary expenses.
But deans should, I think, regularly read the monthly or quarterly
reports on where the School stands relative to budget.
Deans also should ultimately decide how the School’s resources are
allocated; for example, if cuts need to be made should they come from
technology, faculty travel, student employment or some other source?
Nobody likes making decisions like that, but ultimately they have to be
Ask Lots of Questions
there’s a very steep learning curve with regard to financial matters.
I find that reports over which I used to puzzle for long stretches now
take me only a few minutes. But
don’t assume that everything is ultimately going to make sense.
A few times I have come across what seem to me to be odd policies or
practices and have raised questions about them.
Sometimes there’s a good reason for them, but once in awhile it turns
out that there really isn’t any justification for them, and as a result
they’ve been changed. Either way
I’ve come out of it with an improved understanding of the fiscal workings of
the School and the University.
with money issues I find it helpful to take a step back and try to take the
broad view. One recurrent issue
for deans at university law schools is the fraction of revenue (tuition being
by far the largest percentage at private schools and many public ones) that
goes directly for school purposes (law faculty salaries, law library
acquisitions and the like) and the fraction that goes to the overhead units in
the University (physical plant maintenance, shared facilities in the
University and the like). This is
often one of the most emotionally charged issues in a law school setting,
because the law school community sees the revenue generated by the law school
as “its” money while the central administration sees it from the other
often tricky here to do meaningful comparisons, because of overhead allocation
variables. Law schools, because of
their specialized educational needs, exhibit a much higher degree of vertical
integration than do, for example, colleges of arts and sciences.
Law schools have their own libraries, admissions and career services
personnel and often their own development and alumni relations staffs. Thus
they have significant direct costs that other schools and colleges bear only
indirectly through the overhead allocation.
Requiring a law school to pay twice (once directly and once indirectly)
is obviously unreasonable.
In other respects, however, the law school is no different from any
other university budgetary unit. The
building needs to be heated and cooled, the grounds and the building need to
be kept, and so on. If those sorts
of expenses are part of the overhead allocation, then the law school should
pay some fair share.
I have found that some of the most difficult issues surround the sorts
of expenses that the University allocates on a per-student basis – things
such as student recreational facilities and support services and the like.
Technically, law students can take advantage of these and some do, but
because of difference in ages, interests and educational attainment the
participation rate of law students is only a small fraction of that of
undergraduate students. The direct
marginal cost of educating an additional law student is also fairly small,
especially compared to a student in a discipline with very capital-intensive
facilities such as science laboratories.
it is often difficult to quantify these differences.
Should a law student count as only half a student for some of these
purposes? Or would two-thirds be a more reasonable assessment?
The inevitable arbitrariness of assigning any such fraction often makes
it difficult to arrive at any mutually agreeable solution.
Probably for this reason, a good number of schools have restructured
the financial relationship with their university so that they pay a set
percentage of some revenue base (law tuition, perhaps) or have simply agreed
to pay some flat amount. The
culture and traditions of each University affect what is practicable and
desirable. It is essential,
however, to have clear agreement on these matters.
A seemingly fair flat amount might not be fair if costs that were
previously treated as indirect are then charged as direct costs.
In any event, it’s the broad view that is critical.
Here I’ve found that I have had the best success advocating the law
school’s position by taking a several-year view of the problem.
Charts and data showing that law school expenses have risen more slowly
than the categories of expenses charged as overhead have helped our cause in
the yearly budgetary process. Even
the much and rightly maligned
News and World Report
survey can be of some assistance here. The
so-called “faculty resources” ranking of a school is essentially a
per-student spending calculation and can be a helpful measure of whether the
law school is gaining or losing ground relative to comparable institutions.
We’re all busy. Sooner or later,
however, you’re going to have to turn in the law school budget, the
quarterly current estimates and a variety of reports that will probably prove
to be less-than-fascinating reading. If
you’re chronically late in these tasks, you won’t make any friends among
the University financial administrators. Remember,
they’re not just worried about the law school; they have dozens of other
operating units about which they are concerned.
It’s a mistake to assume that they don’t have any influence on
University financial policy. Although
the president or provost may be responsible ultimately for the policies that
most directly affect the law school, the financial administrators usually have
a great deal of direct input on these matters.
If you are candid and timely with them, the chances that you’ll stay
on their good side improve exponentially.
Pay Attention to Particular
At most institutions, the critical budget line is the bottom one.
But that shouldn’t be the only line that matters to you as dean.
It’s easy to fall into the habit of just managing to the bottom line,
but that can be a mistake. If you
try to construct a realistic budget based upon past experience with expenses
for travel, student employment and the like, then the individual lines in the
budget will begin to mean a great deal more.
Every dean, I’m sure, gets a large number of “extraordinary”
requests over the course of a year: an extra research assistant, an
unanticipated technology need, etc. If
you have budgeted carefully line by line, you’ll be in a much better
position to see how much flexibility you have to respond to these requests.
If, on the other hand, the money is spread haphazardly across the lines
it will be much harder to tell how much, if any, room you really have to
One difficult policy issue for deans is how much budgetary information to
share. At public universities, a
huge amount of this information (including individual salaries and the like)
is public information, so the balance is heavily tipped towards disclosure
from the outset. Private schools,
however, do not have to contend directly with open records laws.
Nevertheless, candor and honesty are still the best policies.
There are many aspects of law school budgets and finances that rightly cause eye
rolling. But they are also among the
best opportunities that a dean has to effect policy changes and employ
strategies. If the school is
generally under-funded, seeking changes in the school’s financial relationship
to the rest of the university and changes in budgetary processes may be among
the most effective ways to address the situation.
If improving the admissions situation at a school is the top priority
then deploying more scholarship resources can be an effective strategy.
If bolstering faculty scholarship is a priority, then making more money
available for grants and research assistants is a sensible tactic.
In the end, the duties surrounding school budgets and finances are among
the most critical for a dean.