Where Does The Money Go?

By Author: Henry Ford
Total Articles: 189
Comment this article

Financial management in an institution is one of the trickiest issues. Most institutions operate on a tight budget since the amount of fees paid by students may not be enough to cover all expenses. As such, financial discipline is important in success of any institution. The administration must ensure that the institution is able to fund all its programs from the available resource. This means that there must be a prioritization program in which the most important programs will be funded first while other less important programs comes later either in period of funding or in the actual amount of fund allocated to each program. Observing the resource allocation in my school, Pittsburg University Kansas, there are important questions that arise in the skewed allocation of school money. A close look at spending pattern of the school reveal that there is more funding that goes to athletics as compared to academic program and the question remain where does the money go?
Where does the money go?
Pittsburg is a state university that has produced important people in and outside Kansas (Pittsburg State University, 2009). ...
... Like many other universities, it is faced with a huge financial deficit since the state funds are not enough to sustain its operation. State funding accounts for less than 50% of the overall budget for the university. This means that the university has to depend on external funding mainly from private support and student fees. The budge for FY 2008-2009 was $95 million of which 45% was from state appropriation and 55% from tuition fees, and private donations (Leske, and Will, 2009).
There is a lot of pressure that is being exerted on the university to perform well in sports and in academic programs. Athletics is an important consideration for students enrolling in a particular school. Apart form being a prestigious music and art school, athletic programs have also been attracting students to Pittsburg. This means that the school is striving to perform well in athletics in order to build a good name to attract student. However, most state university cannot match the spending power of private universities and therefore they have been left to rely on private funding. Despite the hard financial situation, these institutions are facing a lot of pressure from student, alumni, parents and the community to win athletics. For example Athletic department in Pittsburg raised more than 349, 000 from donations and fundraising. While many argue that this is likely to increase enrollment and hence generate more for the athletic programs, research has shown that athletic generated revenues cannot match the cost. A recent research showed that only 40 schools out of 200 participants in the study claimed their athletic department was self-sufficient in generation of revenues (Sylwester and Witosky, 2004). In order to compensate for the deficit, the athletic department in Pittsburg University has been relying on funding from the school which means that school is sacrificing money for academic and other programs and committing it to athletic programs. In 2008 budget the athletic department received 1.7 million compared to 150, 000 it received in 2007.
Where does the money really go? It has been argued that most of the money directed towards athletics is not actually spent on wellbeing of athletes themselves but in building of new stadiums, arenas and other sporting facilities, all in name of showcase of the school gladiators. For example, Pittsburg University has been calling for cutbacks while at the same time it can afford to upgrade its new football stadium. The university is calling for a cut of up to 1.2 million in the next five months and further 2.7million next month. At the same time it has been able to upgrade its stadium with more than 5.8 million in 2001 and 2.5 million to locker rooms and a quarter million to track and field. At the same time, the university has been asking professors and custodial crew to switch off the light and power where there is no one using them. The university has gone to an extent of installing motion sensor light switch to putt off the light. However, the university can afford to keep running jumbo-tron at the stadium for hours which I have seen on several times while walking in the field. While a lot of money has been committed to athletics, the university has proposed a $2.7 billion budget cut where it is planning to eliminate 30 faculty positions and lay off 20 staff (Moon, 2009). This money is just going to waste.
However, there is the other side of the argument. Not every year that schools are upgrading their sporting facilities. However, each and every year, the budgetary allocation to athletics is increasing at a higher rate compared to budgetary allocation to education. This means that it is sometimes difficult to substantiate the spending patters on athletics. Still financial managers will not competitively account for each and every dollar that is allocated to sports. Despite the increase spending at Pittsburg, the university cannot be termed as dominant sporting institution. This indicates that although spending in athletics is important, it is not all what makes a winning team. There is need for accountability on the money allocated to athletics.
Conclusion
Financial management in an institution is very important especially for public funded institutions. Research has indicated that there has been increased spending on athletics as compared to spending on academic programs. That same pattern has been observed in Pittsburgh University where more and more money is allocated to athletics but it is difficult to account where that money goes. Financial managers will argue that most of the money goes towards renovation of sporting facilities. However, this renovation is not carried out each year which means there is more to explain on how the money is spend.
Financial management in an institution is one of the trickiest issues. Most institutions operate on a tight budget since the amount of fees paid by students may not be enough to cover all expenses. As such, financial discipline is important in success of any institution. The administration must ensure that the institution is able to fund all its programs from the available resource. This means that there must be a prioritization program in which the most important programs will be funded first while other less important programs comes later either in period of funding or in the actual amount of fund allocated to each program. Observing the resource allocation in my school, Pittsburg University Kansas, there are important questions that arise in the skewed allocation of school money.

The author is associated with

The author is senior writer at https://www.allacademicanswers.com