College Budgetary Principles: the Function of the Budget in Educational Institutions
IN AN important survey of land-grant institutions made in I930, Arthur J. Klein defined the objective of the annual institutional budget as the distribution of available funds designed to further in an equitable and orderly manner the educational program of the year.' No one has described the aim of the college and university budget more tersely or more accurately. Others have called the budget an educational plan for the all-important financial work of the school. Although the college is not established to operate at a profit like an industrial plant, its financial management is essential to its existence and to the effectiveness of its program. Accounting, purchasing, construction, repair and maintenance of buildings, collection of income, and many other activities of the business world must be conducted in the educational world. Sound business principles should apply in every financial facet of college life. The eleemosynary character of many higher educational acts does not lessen the need for strict controls or condone laxness in the disbursement of funds that accrue from gifts and endowments. More and more, the schools will come to depend upon the businessman and his corporation for the new resources needed for higher education. A person trained in commercial procedures and successful in applying them will tend to think of his support as an investment, not as a gift. Such men will be encouraged to invest in the college because of demonstrable needs of society-some of which naturally will be the needs of their own industry for engineers and other trained personnel. Others will be motivated by the more altruistic end of supporting the nation and our democratic culture. The American businessman will be convinced of the worthiness of these goals, but he will want to know what he has bought, and he will demand that the college give an accounting of the trust. The returns he anticipates on his investment will be measured, not in terms of profits, but in terms of performance: more and better teachers, scientists, and citizens in general. Those who provide money for education demand with increasing