This 12-part series offers a high-level approach for developing an academic cost stewardship framework and institutional culture in which high academic quality and the efficient allocation of financial resources are viewed as complementary. For more than 25 years, I have been associated with public and private colleges and universities in various capacities, including more than 60 consulting engagements to refine institutional cost awareness and distributed decision making. Now, I offer this resource to help college and university leaders address the challenges they are facing today, especially those that threaten the financial stability of institutions enduring significant declines in enrollment and decreases in net revenues.

Like most cost frameworks, this one is not meant to be a rigid mandate. Instead, it offers a high-level approach in which collaborations among senior administrators, faculty, and staff are crucial. Its forward-thinking approach emphasizes tailored solutions that prioritize the core missions of teaching and learning as higher education institutions grapple with serious issues of financial sustainability. I invite readers to view this resource as a compass that can guide them in enhancing decision support tools necessary for institutional success, using points of collaboration, transparency, and adaptability to navigate the ever evolving and increasingly complex landscape of higher education.

To establish a sense of what is to come, I offer a brief summary of the topics discussed in Sections 2 to 12. They are areas I have identified as being imperative for encouraging collaborative decisions that can produce effective academic cost frameworks.

• Section 2: Defining Academic Cost Stewardship and Other Key Concepts

  Academic cost stewardship is the management of costs at an academic institution through the collaboration of administrators, faculty, and leaders of institutional units. It emphasizes transparency, shared governance, and strategic decision making. This framework integrates data from various sources to ensure that decisions about budgeting, resource allocations, and cost-saving measures are based on sound information. Faculty, administrators, and governing boards have specific roles in the creation of a sustainable culture of cost stewardship. Key tools include decision support systems and centralized data repositories, which can help institutions align financial resources with academic missions. The approach combines operational strategies, formative learning, and technology to foster a comprehensive and adaptable financial framework.

   

• Section 3: Challenges of an Operational-Centric Mindset

  The historical mindset of higher education in the United States, starting with Harvard’s founding in 1636, has been a deeply ingrained operational-centric one in many institutions. We suggest that this approach, characterized by a reliance on historical precedents and resistance to change, has been perpetuated, in part, through antiquated program development and administrative practices. Despite the evolving needs of society, many colleges and universities have relied on traditional ways of delivering the curriculum, setting up budgets, and planning academic programs. This adherence to the “good old days” has limited the capacity of institutions to innovate and effectively meet the demands of many modern learners. The need for a strategic shift toward informed decision making and changes in leadership structures and overall planning is emphasized in this section. The goal is to review common operational pressures and ensure the financial viability and relevance of higher education institutions in serving their students, faculty, and communities.

• Section 4: The Value of Knowing 

  In the 2020‒2021 academic year, U.S. public and private not-for-profit colleges and universities spent more than $517 billion on core expenditures, with less than 27% of them allocated for instruction. The shift from using funds mainly for instructional purposes to increasing the funds for administrative and research expenses has challenged leaders to figure out how to allocate a shrinking proportion of resources among growing numbers of priorities. Institutions that lack integrated information infrastructures have difficulty in making effective decisions regarding budget cycles. In this section, we highlight the obstacles of effective academic cost stewardship, which are fueled by a lack of transparency, perceptions of top-down decision making, and a lack of relevant information. The complexity of modern educational institutions, the timing of the fiscal year, and the difficulties in collecting accurate, relevant data exacerbate the problem. Effective cost stewardship necessitates collaboration among leaders and engagement with faculty, so that learning outcomes can be aligned with financial resources and integrated information systems can minimize redundancies.

• Section 5: Identifying and Developing Expertise in Academic Cost Stewardship 

  This section outlines a comprehensive approach for enhancing academic excellence through effective cost stewardship and academic program delivery. We acknowledge that academic affairs divisions are complex and diverse and advocate for a tailored approach to fiscal management that respects the unique structures and cultures of individual colleges and universities. The role of the provost, or chief academic officer, is highlighted as central to overseeing a wide range of academic and administrative functions, including budgeting, faculty development, and enrollment management. We also call attention to the significant autonomy faculty have in curriculum development and the challenges this presents for aligning academic programs with financial realities. We argue for the development of a transparent academic cost framework, supported by aligned information systems and budget planning cycles, to facilitate better decision making. The importance of a formative learning approach to developing and sustaining this framework is underscored, as is the need for patience and continuous data improvement as academic leaders and faculty collaborate.

• Section 6: Assessing the Current State of Academic Program Costs 

  In this section, we highlight some of the familiar challenges seen when a comprehensive system of academic cost stewardship is adopted and show how institutions can meet them. Because higher education is operational in nature, misunderstandings may occur as academic program costs are reviewed. An existing infrastructure, often operationally focused, may limit strategic alignments and information sharing in long-term planning. Therefore, institutions are urged to assess their resources, develop a culture of transparency, and prioritize planning and decision support. The faculty handbook may be a valuable resource, providing insights into policies and metrics. Identifying senior leadership roles is crucial for collecting data, understanding past attempts, and contemplating barriers to change. Staff resistance to change requires dialogue, and evaluating information systems and the analytic infrastructure is essential. The proactive management of data integrity is key. Proper due diligence ensures a collaborative, ownership-driven approach.

• Section 7: Organizing the Curriculum

  This section highlights the critical need for higher education institutions to develop an integrated decision support tool that aligns expenditures, faculty efforts, and revenues across academic units so that resources are allocated appropriately. Critiques are made of the lack of integration in some current systems; it is attributed to operational silos in the areas of finance, human resources, and the registrar’s office. It proposes a hybrid cost model that may align costs with academic outputs, emphasizing the necessity for collaboration among people with various institutional roles. It suggests that curriculum mapping workshops be organized for faculty; they can offer practical exercises that may foster collaborative planning for and transparency in curriculum development, serving as a foundation for effective academic cost management and program classification.

• Section 8: Understanding Course Delivery

  Challenges in coursework delivery in higher education institutions include complex schedules and issues in aligning the curriculum with the resources necessary to deliver high quality educational experiences. Academic chairs work to create efficient schedules but may face issues with team-taught courses, interdisciplinary courses in more than one section, and outdated administrative systems. These challenges hinder efforts to measure the alignment of policies with financial metrics, which may result in the development of analytics that lack an appropriate context. Collaboration, comprehensive data management, and improved information system capabilities are essential for accurate reporting and strategic planning. The section advocates for integrated decision support tools that can align financial and operational planning effectively.

• Section 9: Establishing Clear Policies for Faculty Effort

  This section underscores the need for integrating department-specific financial insights into a broader institutional framework to enhance decision making and faculty engagement. Efforts to explore faculty effort, highlighting variations in workload expectations across disciplines and contracts, and adaptable policies that accurately reveal the costs associated with faculty effort are needed. The review advocates for proactive strategies such as data validation workshops and policy review sessions to ensure that data usage and policy alignment statistics are accurate. This ultimately fosters an environment in which the faculty is well informed about academic matters and faculty workloads are fairly distributed and appropriately managed. 

• Section 10: Aligning Finances with Institutional Needs

  The critical role of financial resources in academic cost management in higher education institutions is described. The operational overhead pays for things such as administrative support and supplies, which are considered direct expenses tied to specific academic disciplines. The importance of a comprehensive general ledger and chart of accounts for accurate categorization and allocation of costs is emphasized. The necessity of involving faculty and staff in developing and understanding cost frameworks through transparent communication and active engagement is also highlighted. This approach aims to foster a community-oriented environment in which all participants are well informed. This is crucial for effective decision making and strategic planning.

• Section 11: Nurturing a Culture of Distributed Decision Making

  We outline a comprehensive approach to academic cost stewardship, focusing on equipping decision makers with essential information that will allow them to be good stewards of resources. A foundational academic cost framework, as introduced in Section 10, integrates an understanding of faculty effort with the allocation of financial resources across the institution. This integration aims to address academic discipline anomalies and standardize decision support tools, thereby encouraging faculty buy-in. The section introduces the concept of faculty effort, highlighting the ways in which variations in workload expectations can be manifested and the importance of aligning faculty effort with learning outcomes and institutional goals. It also discusses the categorization of financial resources as direct expenses and the significance of aligning these resources with the academic units consuming them. The decision support phase is crucial, and it requires transparent communication and feedback mechanisms to foster community ownership and adjust costs to match financial realities and long-term goals.

• Section 12:  Meaningful Budget Alignment

  The closing section outlines the critical relationship between budgeting approaches and academic quality, emphasizing the need for institutions to adopt a strategic budgeting process informed by reliable data that aligns with academic and societal priorities. It stresses the importance of collaboration among faculty and administrative units, the proper alignment of academic resources with the source of an expense, and the adoption of a formative approach to decision making and budget planning. We advocate for the integration of a decision support tool into the budgeting process to facilitate informed decision making, enhance transparency, and improve academic program delivery in alignment with financial realities. The text also highlights the necessity of comprehensive training for stakeholders to effectively utilize the decision support tool, thereby establishing an academic cost stewardship culture that supports the institution’s mission and strategic goals. The author advocates for a transparent, data-informed budgeting process aligned with the institution’s mission and strategic priorities, and emphasizes the need for regular evaluations and adjustments of the tool to meet changing financial goals and challenges.