Keeping an Eye on the Money
If you have held an administrative position before, the budget and the budget planning process may be something with which you are familiar, but if you have not been directly involved with the budget process, it can be intimidating. Since most academic administrators have fiduciary responsibility for their academic units, careful financial management is one of their most important roles. This responsibility entails the acquisition of funds from various sources, planning the best use of funds, creating a budget, and then managing the academic unit within that budget. It is not unlike your personal bank account except there are many more sources of revenue (tuition, state or local funds, grants and contracts, practice plans, hospitals, gifts and endowments, etc.) and expense categories (personnel, equipment, space rental or construction, operating expenses, travel, utilities, etc.). Institutions are similar in the type of accounting and budgeting process they use, but they may differ in detail and method. Public institutions tend to have more restrictions and regulations on institutional funds and how they are spent. Persistent mismanagement of budgeted resources will not be tolerated by senior academic administrators and, if you are responsible for their mismanagement, neither will you. This chapter offers a few pearls about the financial aspects of an academic unit.