Bulletin

(3) Expenditures from State appropriations should be made by State warrants for individual bills or pay rolls. Institutional receipts should be deposited in and disbursed from the treasury of the institution, these transactions to be fully covered in regular audits and reports, and included in the institution's budget submitted to the legislature.

(4) The governing board should have the power to plan and erect all buildings provided for by legislative appropriation. Authority to receive, handle, and administer trusts in perpetuity should be vested in the governing body, such funds being exempt from all State and local taxes.

(5) The methods by which the governing boards are chosen is of paramount importance in determining their personnel. A variety of arrangements for the appointment of the members is in effect in the different States, including popular election, selection by governor with and without the consent of the senate, by the State legislature, partially by the alumni, and by the board itself. The most desirable plan is for the appointment of the members by the governor with the approval of the State senate.

(6) The composition and permanence of the governing bodies is dependent to a large degree upon the length of the term of office. When the power of appointment is vested in State agencies, it is essential not only that the terms of the members expire in different years but that they be of sufficient length to insure that a single State administration shall not change the entire complexion of the board.

(7) Constructive policies for the development of the institutions can not be effectively pursued if frequent changes are made in the chief executive officers. According to the data collected, the actual length of the term of the president is short for the land-grant college group as a whole and there is a considerable turnover in the position. Frequent changes in the chief executive officer tend to retard the orderly and progressive advancement of the institutions. The office of president of a State higher educational institution should not be a political position and should not be subject to the uncertainties of elective public service.

(8) The president should serve as the chief executive officer of the governing board responsible for the enforcement of its decisions, actions, policies, and regulations for the operation of the institution. In this capacity, he should present all business and other matters to the governing body at its regular and special meetings. Under no circumstances should the board initiate policies without regard to the president. For the proper administration of the affairs of the institution, the president should also have complete authority over the selection of all officers, members of the staff, and other types of employees, the governing board following the recommendations.

PART III.-BUSINESS MANAGEMENT AND FINANCE

Chapter I.-Organization of Business and Fiscal Office

Finance and business organization are the foundations of the educational structures of land-grant institutions. Without the necessary financial support, without competent handling of fiscal affairs, and without the employment of organized business methods, the fulfillment of academic programs or the achievement of educational objectives is impossible or must be wastefully accomplished. Land-grant colleges are maintained primarily by funds obtained from public sources. To secure the confidence of State officials and State legislatures intrusted with the appropriation of such funds and of the taxpayers who contribute them, it is essential that sound business principles be applied to expenditures and that the highest possible return in educational service be realized.

No land-grant college, however small, should be without a central business or fiscal officer responsible for the efficient handling of all business and property. Business principles do not vary in their application. They are as relevant to the institution of higher education as to the private commercial enterprise. The business organization should be charged with service to the instructional organization of colleges and universities. Only academic duties should be performed by members of the faculty if the best results are to be attained in the establishment of an effective and efficient teaching organization.

The same principles apply equally to the general government of the institutions. Members of governing bodies with important personal and private interests, serving without compensation, are unable to give their attention to routine business management and supervision. Their time should be utilized in directing major policies and in solving major problems. Nor should the president of the institution serving as executive agent of the governing body be called upon to attend to the multitude of details connected with financial administration. If he is required to do so the larger responsibilities of his office will, almost of necessity, be neglected.. This does not mean that the governing body and the executive officer

should relinquish control over financial and business affairs, but that the details of management should be delegated to a business or financial officer especially trained and qualified for the work.

In the early history of the land-grant college, it was the custom to distribute to a large degree the handling of business matters among the governing, executive, and academic branches. The institutions were small. Funds received for their support were limited and no necessity existed for a separate business office. But with the growth in the size of the land-grant institutions, the great capital investments in physical plants, the added responsibilities of property management and accountability, the increase in annual revenues, the multiplication of academic divisions and subject-matter fields, and with the development of many auxiliary enterprises and service departments, it became imperative that attention be given to the creation of central organizations to control the expanding business and fiscal activities. The reports show that 39 of the 43 institutions filing returns in the survey have established central business or fiscal offices, that 2 institutions handle their business and finances in the president's office, and that 1 institution conducts its business and financial affairs through a State business office. No return was made by one institution.

Among the institutions which have established separate business or fiscal offices a diversity of practices is found. Some of the universities and colleges have segregated the management of their business from their fiscal affairs by the creation of both business and fiscal offices, while others have made still further subdivisions into coordinate units. The variety of arrangements is illustrated by the names applied to the central office.

In 11 institutions it is called the business office, in 7 the comptroller's office, in 7 the office of the secretary, in 4 the treasurer's office, in 2 the business manager's office, in 2 the bursar's office, and in 2 the office of the financial secretary. In one institution the office is designated as the office of business agent and secretary, in a second as the fiscal department, in a third as the State business manager, and in a fourth as the regent's office. Four colleges failed to report on the name given their central business or fiscal office. A similar situation is revealed by examination of the official titles conferred upon the chief business or fiscal officer. The title of the officer is comptroller in 10 institutions, business manager in 9, bursar in 4, treasurer and business manager in 2, and secretary-treasurer in 2 cases. The titles applied by the remaining institutions are business agent, financial secretary, secretary and business manager, finance secretary, treasurer and business manager, comptroller and treasurer, manager, business-agent secretary, comptroller of accounts, and secretary-treasurer and purchasing agent.

The name of the central business office and the title conferred upon the officer in charge are of little significance except to illustrate the lack of uniformity in institutional practices. Of vital importance, however, are the questions of power of appointment of the business or fiscal officer and the authority to which he is responsible. The returns indicate that the president recommends his appointment in

31 institutions and the chancellor of the university in 2 others. One university reported that the appointment is recommended by the institutional treasurer, who is the chief fiscal officer, while in another case the recommendation is made by a committee of the university trustees. Seven colleges furnished no information on the question. In the case of one university it was stated that no recommendation was required. As the business officer should serve directly under the president, who is the responsible administrative head of the institution in all its phases, the practice in the majority of institutions is sound.

The power of appointment of the business or fiscal officer should be vested in the governing body of the institution. This is the practice in 32 universities and colleges. In the remaining institutions different policies are in effect.

In the case of one institution the business manager is appointed by the board of regents of education, in a second by the board of supervisors, in a third by the State board of agriculture, in a fourth by the board of administration, in a fifth by the chancellor, and in a sixth by the governor of the State. One university reported that the appointment is made by the board of visitors and another that the appointive power is vested in the corporation governing the institution. Three colleges did not submit information.

Considerable confusion in the relationships of the business office is found in a number of the colleges. Instead of the business officer being directly responsible to the president, the returns show that in five institutions he is directly responsible to the board of trustees. A similar situation exists in two other universities where the business officer is responsible to the State board of agriculture and to the governor as chairman of the State board of administration. Such an arrangement is not in accordance with orderly and systematic administration of educational activities. In both of these groups the authority of the president seems to be superseded. The business officer is under the supervision of the treasurer in another institution and is under the jurisdiction of both the chancellor and the regents in a second case. Thirty-two of the universities and colleges report that the business of fiscal officer is directly responsible to the president. Two institutions did not reply on this point.

If an effective centralized financial organization is to be established, if financial administration is to be placed on a sound basis, and if a systematic plan of procedure is to be enforced, it is essential that the chief business officer should have direct control over all business and fiscal affairs of the institution. In his office should be concentrated the receipt of money, handling of expenditures, purchasing, accounting, supervision of physical plant, management of business enterprises, and any other services on the campus involving the collection and disbursement of funds,

The survey made a special effort to ascertain the responsibilities of the chief business officer, the duties assigned to him in the institutional establishment, and the functions and activities of his office in the different land-grant universities and colleges. Table 1 gives a general analysis of the responsibilities and duties of the chief business officer in the 39 institutions furnishing information on this matter in the survey.