Monday, January 5, 2015

Colleges Need a Business Productivity Audit - FRANK MUSSANO And ROBERT V. IOSUE, Wall Street Journal

In short, colleges and universities engaged in a spending spree because they can. But there’s one simple idea that might start to reverse the spending spree: audits of higher education. In the business world, officials keep an eye on the bottom line. If profits are down, there’s a performance audit to identify unprofitable practices. Similar audits are conducted on defense plants, hospitals, social agencies and other businesses that benefit from tax dollars. Why not audit higher education? A required review could focus on basic teaching workloads, space utilization and personnel costs as they relate to program revenues. Since the federal government already collects data annually on higher education, it could start asking for more information related to productivity. Colleges would be forced to reconcile sloppy and obscure bookkeeping methodologies to report statistics in a format consistent with government-defined metrics. Eventually, benchmark comparison data could be established for various categories of institutions.

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