The vice president of financial affairs is a senior-level position at universities and colleges overseeing the finances, facilities, and forecast planning of their institution. The role encompasses numerous responsibilities, various challenges, and quality character traits. A strong financial leader is essential to the health and vitality of a higher education institution.
General Overview
The role of vice president of financial affairs goes by many titles depending on the institution including chief financial officer (CFO), chief business officer (CBO), and vice chancellor of finance. According to a 2016 survey by the National Association of College and University Business Officers (NACUBO), the typical CBO is a married, white male about
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A top-down approach empowers the leaders, including the president, CFO, board members, and other administrators, to make the budget decisions. This approach allows for expediency and works well in cultures that trust their leadership. In a collaborative approach, a variety of campus constitutes, including faculty, staff, and students, are involved in the budget process. Blezien and Graham suggested that it is best when the representatives are elected rather than appointed. This collaborative approach may provide increased understanding and acceptance of the budget process by the campus community; however, it could take more time to come to decisions due to scheduling meetings and navigating a variety of private …show more content…
"Business officers wear many hats. The most important is that of the guardian of the institution's assets. Risk management in all forms - identifying, reducing, controlling, and transferring risk - is an invaluable tool for safeguarding those assets" (Abraham, 1999, p. 89). In order to effectively address risk management, a CBO must identify risk, develop a plan to reduce risk, transfer risk, and report on the cost of risk management. Abraham (1999) identifies five categories of risk: physical, casualty, fiscal, business, and reputational. For physical risk, a CBO must ensure the preservation of physical assets, such as buildings, vehicles, and art collections, from harm including fire, earthquakes, floods, or vandalism. Abraham defines casualty risk as “the risk that someone will accuse the institution of doing something wrong either by its actions or management decisions” (1999, p. 84). CBOs must protect their schools against administrative negligence, tragic accidents, general liability, and legal liability. Clearly, fiscal risk is an essential responsibility of the CBO. This includes not only effectively managing investments, such as endowment, trusts, and deferred gifts, but also safeguarding against employee theft and dishonesty. Weisbrod and Asch (2010) warned
Responsible to the University President for the overall administration and management of the university intercollegiate athletics program; and performing other related duties as assigned.
• To oversee the financial performance of the school ensuring the money is spent effectively and how it is spent
p. 496). See also p. 495. The budget process, according to Marshall, is to "develop and communicate" how an organization's economic, industry, and organizational strategies will be effected within the budgeted time frame. People within the organization, from planners, economists, and managers, contribute to facets of the strategic budget process in order to meet organizational needs. Upper management then typically approves those budgets....
Provides advice, assistance, and guidance on budgeting and related information to program managers and budget-related personnel in subordinate organizations. Conducts analyses, reviews, and special studies of budget and/or related information.
Foremost, they need to work internally to improve the operational infrastructure and find the resources to support critical operation initiatives while protecting the assets of the organization. Likewise, the CFOs need to work externally to build strong inter-organizational relationships with health insurance leaders, provider, and suppliers. Additionally, while the CFOs job responsibilities appear to expand due to the changes..., so, too, "is the importance of traditional financial management practices such as internal control and business analysis... as well as to identify the potential control risk that could further reduce and threaten financial viability" (Langabeer, DelliFraine, & Helton,
Obviously, financial establishments can endure breathtaking misfortunes notwithstanding when their risk management is top notch. They are, all things considered, in the matter of going out on a limb. At the point when risk management fails, be that as it may, it is in one of the many fundamental ways, almost every one of them exemplified in the present emergency. In some cases, the issue lies with the information or measures that risk directors depend on. At times it identifies with how they recognize and impart the risks an organization is presented to. Financial risk management is difficult to get right in the best of times.
Sielke, C. C. (1995). Budgetary Decision-Making: Is It Rational, Incremental or Garbage Can? Retrieved from Institute of Education Sciences website: http://files.eric.ed.gov/fulltext/ED383048.pdf
Participative budgeting has the advantage of transferring information from the subordinate to their superior This knowledge is likely to be more reliable and accurate as the subordinate has direct contact with the activity and therefore is in the best position to make budget estimates. Participative Budgeting also gives subordinates the opportunity to discuss organisational issues with superiors, in which an exchange of information and ideas can help to solve problems and agree future actions (Nouri & Parker 1998). This transferral of information is important particularly when dealing with a matter of high task difficulty as, the more difficult a task, the greater the need for consultation with subordinates. Participative budgeting has a higher performance rate when dealing with more difficult and more volatile tasks than non consultative budgeting (Lau & Tan 1998)
Business risk management has been a widely crucial tool for firms to include in their operations and its importance cannot be overlooked. In the case of British Petroleum (BP) Gulf of Mexico Oil Spill in 2010, there was negligence and lack in the contingency plan and response of the company to the risks that arose. It became evident in this analysis that BP’s manner of handling the incident had a massive financial implication that ensued negative public perception and company reputation and value.
The Presidents of each of the campuses are responsible for managing capital budgets and creating operating budgets. Once the budget has been completed, the President then submits it to the College-wide President and the Board of Trustees for review. The Board then provides recommendations on revenue and expenditures and how resources should be allocated.
(Administration is a field of business- looking at the importance of keeping the matter either politics and/or business.)
The objectives of operation, reporting, and compliance are represented in the column. Components are represented by the rows regarding the ERM. The third dimension is the entity’s organizational structure. It demonstrates clear how and how counteract low risk tolerance and high risk appetite. Risk reduction is obtained by facilitating effective internal control with a broad scope that reflects changes in the framework to risk management with ERM. The framework requires adaptability which enables flexibility due to a overlap of functions of identify, assessing, and responding to risks within operations, reporting, and compliance. Activities, information, communication should be monitored, evaluated, and identified for response are part of the ERM for effective and efficient risk management. The concept of risk appetite and risk tolerance is introduced because the identification of potential events affecting achievement can be managed. Also, the process requires communication, consultation before and monitoring and review after every decision or action (McNally, 2015). The financial principles to risk management are effective risk management creates value, integration, decision making, address uncertainty, systematic structure, and facilitated continuous improvement. The financial principles form effective and efficient management within a firm. Financial principles help ERM with risk
Identify the potential risks which affect the company and manage these risks within its risk appetite;
I learned a few things about my school and myself in regards to this area of leadership by participating in this activity. I learned that my school asks for very little participation from the teachers and community in regards to the budgeting process. But it could be an excellent venue to review prior year accomplishments as well as decide on future objectives with these stakeholders. If I were an administrator, involving the community and faculty would not only help in maintaining awareness, but I could also use this as a way to help those who may not be directly vested in my school, but who are helping fund it through their taxes, recognize effective administration in our efforts to reduce costs and provide needed resources to the various programs. I also feel that budget decisions cannot be solely programmatic or solely monetary. There needs
Blocher et al (2013), added that at the end of an operating period, managers view the budget plan to interpret any variance between actual and budgeting expenditures and operating outcomes. Under certain circumstances, a firm uses a budget plan, to ensure accurate spending, monitoring costs, and to analyze a subunit’s accomplishment. For example, the government use these tactics when a fiscal year budget has not been approved; which is known as a continued resolution. The lawmakers allocate a portion of funds to sub-agencies in order to remain operational. However, the budget plan allows lawmakers to monitor costs, planning, spending and the sub-agency’s goals for accomplishments.