OUR THOUGHTS ON:

Postcard from NACUBO Higher Education Accounting Forum

Higher Education

By Patrick Kerns

Greetings from sunny Orlando, Florida, the location of the 2016 National Association of College and University Business Officers (NACUBO) Higher Education Accounting Forum.  This year’s conference includes more than 550 attendees from all across the country, ranging from small public and private institutions to large institutions. This year’s conference once again focuses on hot topics and trends in higher education.

The opening keynote address, given by Kent Chabotar of Guilford College, focused on the current state of higher education. Mr. Chabotar is a professor of political science, author, former chief business officer, and was president of Guilford College until 2014. The message from day one this year was more focused on the management of change, in particular, how to manage your finances as all colleges and universities seek ways to grow and thrive.

One theme was taking a hard look at your current enrollment and making sure that your faculty and staff structure match those needs. Over the past few years, most institutions have been challenged by lower enrollment due to changing demographics and prospective students being more focused on costs.  Mr. Chabotar stressed that institution need to balance student, faculty and staff ratios to ensure that they are appropriate based upon enrollment.  Challenges in managing these ratios have translated to an uneven recovery for institutions. Mr. Chabotar challenged schools to find an appropriate balance between investing and managing costs, as prolonged lack of investment can cause other consequences or challenges in maintaining an institution’s long-term viability.

Another theme was the requirement that all colleges and universities continue to focus on value proposition.  An institution’s value proposition should focus particularly on marketing, technology and demonstrating value.  Each of these areas needs to work together for institutions to maximize the value that they are providing and manage costs appropriately. Each institution must answer the basic questions on what are they known for; what value does their degree provide; and how their internal resources are managed to efficiently and appropriately balance costs and investments in programs.

Mr. Chabotar also noted that Moody’s outlook of the sector is more favorable, and while Moody’s remains cautious, it believes that there will be modest revenue growth for most institutions.  For institutions that have revenue growth of 5%, the outlook is positive, which is welcome news to this sector.

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