No accounting for moles

A journal of discovery in university budgeting reveals you don’t always get what account for

ANU DVC Marnie Hughes Warrington records her journey across what only look like the well-ordered plains of higher education finance  here. She regularly reports on the steps and stumbles towards the never-quite-in-sight city of budget perfection, as in her new essay on why activity based costing encourages a “whac a mole” approach to planning.

While she thinks well of the university’s model and considers highly competent the people who use it, annual data means a zero-sum game of whacking one mole only to see another inevitably appear.

“Some people, quite logically, see a teaching cost that they think is too high, and adjust it down. That adjustment down leads to adjustment up in other categories such as research. Dial teaching down, research goes up. Dial research down, teaching goes up,” she records.

As for using long term costs for budget building “It can be hard to get to long-run costs, however, if the majority of a university’s budget flows from yearly or sub-yearly government budget frameworks, or if year on year displays only go back one year.”

One way or another, it seems, accounting moles are always with us.