Traditional budget systems in higher education tend to focus on requests or needs as a basis for distributing resources. Such systems have a variety of inherent problems ranging from the squeaky wheel receiving more than is justified for a particular program, to the lack of focus on planning and costing problems in higher education. Operating units "naturally seek to maximize the resources they receive each year. "Why try to manage on less if more can be obtained?" Such systems tend to be highly centralized with the administration making line item and trade-off decisions concerning financial resources. As a university becomes more complex and incentive oriented, the weaknesses of such an approach become more apparent. Universities need to unshackle the creative energies available at all levels of the institution to address issues of cost control and income generation.
Open the original version of this page.