RE: The Budgetary Grip of Enrollment

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With the recent delayed passing of the North Carolina State Budget and many Community Colleges experiencing declining enrollments, Kohl's blog post provoked much thought about how to address the budgetary grip of enrollment.  While faculty reductions at Southern University of Maine and Wisconsin higher education institutions were cited, faculty reductions in the NC/VA region have also occurred. I will refer back to the article we read about Patrick Henry County Community College who experienced faculty reductions in 2013 when a budget deficit of $1.8 million was discovered (Tyson, 2014). Although significant enrollment decreases contributed to the aforementioned situation, poor planning seemed to be the root cause. Goldstein (2005) emphasizes that while financial crisis can occur at any time, institutions who have not adequately planned are struck the hardest.  The institution treated tuition funds during increased enrollment periods as recurring funds rather than one-time funds which failed to budget for the decreasing enrollment period (Tyson, 2014).  It appears to me that Patrick Henry Community College was utilizing an Incremental Budgeting process in which resources are allocated in a uniform manner through specified percentages.  This process is based upon the theory the basic aspects of programs and activities do not significantly change from one year to the next.  Incremental budgeting is an efficient, simple, easy, controllable, and flexible budgeting method that works well under normal circumstances (Goldstein, 2005).  However, when enrollment began to steadily drop from 2011 on, non-marginal changes occurred and the community college could not allocate resources in the same manner.  The lack of meaningful planning was the root cause of Patrick Henry Community College’s financial exigency.  As stated by Goldstein (2005) and Tyson (2014) the largest component of any institutional budget is salaries and benefits often representing 70 percent or more of the operating expenses. Therefore, in times of financial crisis terminating faculty positions is the most obvious way to relieve the financial stress.

So how can we avoid cutting faculty positions during declining enrollment periods?  I believe the answer is building flexibility and awareness into the budget process.  Goldstein  (2005) suggests that academic and enrollment planning can strongly influence the budget process. For example, Institutional Effectiveness processes such as college, division, and department strategic and tactical planning, sets the framework for resource allocation and includes faculty positions.  Community college programs must continually assess their individual effectiveness to assess and monitor their resource allocation.  An enrollment plan influences the allocation of resources by estimating tuition, and student fee revenues along with faculty salaries and purchasing expenses.  Both of theses processes can create a cushion in uncertain times.

Forsyth Tech currently employs 562 full-time faculty positions and 956 part-time positions for 200 plus curriculum and economic workforce programs (Fast Facts, 2015).  The college experienced a nine percent enrollment decrease for the Fall of 2015.  Awareness to the decrease in tuition revenue is occurring at the health technology program level,  with full-time vacancy positions being filled by programs who can demonstrate a healthy applicant pool and successful completion/retention rates.  Health Technology programs can generate projected enrollment numbers by collecting data representing the number of general occupation students who have designated a health technology program as a major.  Additionally, health technology programs are evaluating their utilization of part-time employees to determine if the number of students is comparable for the number of part-time instructors.  The current expectation is that full-time faculty should be able to teach the courses within the program of study with part-time faculty utilized to help cover clinical and high faculty teaching loads.  All of this is performed through annual program planning and assessment.

Planning and awareness is essential to the budget process!!

 

References:
Forsyth Tech, (2015). Fast Facts. Retrieved from https://www.forsythtech.edu/discover/fast-facts/

Goldstein, L. (2005). College and university budgeting: An introduction for faculty and academic administrators. Washington, DC: NACUBO.

Tyson, C. (2014). For community colleges, Post-recession blues. Inside higher ed. Retrieved from https://www.insidehighered.com/news/2014/07/17/enrollment-low-stakes-are-high-community-college-learns#sthash.yF6LVG8f.dpbs