Piedmont University

Essay by mk123 October 2006

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University's student enrolment is in the decline and there has been escalating cost to the point where the university is in a financial difficulty, but they continued the operations by using the accumulated reserves. Hugh Scott joined as the new President, and immediately he raised the tuition fees and froze faculty staff hiring. Within one year of operation, he managed to accumulate a small operating reserve.

Annual expenditure budgets were submitted by the deans to the president and financial vice president, where faculty size and salary, adhering to the budget is stressed.

Neil Malcolm, Piedmont alumnus, reviewed the financial situation and suggested that the University should increase student recruitment, reorganize the departments into profit centers and increase fund raising activities in the community.

Malcolm's proposal created disagreements in many aspects in dealing with administrative costs, gifts and endowments, athletics, maintenance, computers, library, cross registration

Problem Identification

Departments that typically do not bring in revenue for the university, has created concerns about the operational feasibility being a profit centres.

There were dilemma regarding the determination of "additional fees" and the "overall implications" in charging additional fees for usage of the library, computer labs, and athletic facilities.

Additional fees will create dissatisfaction among students, and also discourage potential student from enrolment. This will contradict with the University's objective in attracting potential students.

Functionality on how to charge students library fees and other specifics may add additional administrative expense instead of reducing it.

Other than controls on faculty size and salaries, there are no budgetary controls on other expenditures. In fact, other expenses were approved at the desecration of the schools.

Maintenance and central administration expenditures may not directly affect the student's fees but it is substantial portion to the individual schools.

Profit Centre;

As suggested, converting to "profit centres" will...