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Category: Budgets

Classroom Economics (Part 4)

Yesterday we looked at ways to get the teaching budget down.  Today, we’re going to look at the other half of the cost equation: all that overhead.  And we’re going to look at it by asking the question: how big a cut in overhead would it take to equal the effect of replacing 20% of your credit hours with sessionals (which, as we saw yesterday, reduces overall teaching loads by 17%)? Recall the equation: X = aϒ/(b+c), where “X” is the

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January 22, 2015 No Comments

Classroom Economics (Part 3)

(If you’re just tuning in today, you may want to catch up on Part 1 and Part 2) Back to our equation: X = aϒ/(b+c), where “X” is the total number of credit hours a professor must teach each year (a credit hour here meaning one student sitting in one course for one term), “ϒ” is average compensation per professor, “a” is the overhead required to support each professor, “b” is the government grant per student credit hour, and “c” is

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January 21, 2015 9 Comments

Classroom Economics (Part 2)

Yesterday, I introduced the equation X = aϒ/(b+c) as a way of setting overall teaching loads. Let’s now use this to understand how funding parameters drive overall teaching loads. Assume the following starting parameters:       Where a credit hour = 1 student in 1 class for 1 semester. Here’s the most obvious way it works.  Let’s say the government decides to increase funding by 10%, from $600 to $660 (which would be huge – a far larger move

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January 20, 2015 4 Comments

Classroom Economics (Part 1)

One of the things that continually astonishes me about universities is how few people who work within them actually understand how they are funded, and what the budget drivers really are.  So this week I’m going to walk y’all through a simplified model of how the system really works. Let’s start by stating what should be – but too often isn’t – the obvious: universities are paid to teach.  They are paid specific amounts to do specific pieces of research

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January 19, 2015 5 Comments

Responsibility-Centred Budgeting

As I’m on the subject of finances and budgeting these days, I thought it a good time to bring up the topic of “responsibility-centred budgeting” (RCB).  It’s a timely topic, given both this ludicrous article in the Edmonton Journal last week, and the fact that I have one loyal reader who’s been urging me to write about it for months now (Hi, Alan!). Responsibility-centred budgeting basically says that units (usually faculties, occasionally departments) are responsible for raising their own funds and covering

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October 28, 2014 22 Comments

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One Thought to Start Your Day is our founder and CEO Alex Usher’s popular daily blog, brimming with up-to-the-minute insights and informed opinions on today’s higher education industry.

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