Skip over navigation

Standard Nine: Financial Resources

The institution's financial resources are sufficient to sustain the achievement of its educational objectives and to further institutional improvement now and in the foreseeable future. The institution demonstrates through verifiable internal and external factors its financial capacity to graduate its entering class. The institution administers its financial resources with integrity.

9.1 The institution preserves and enhances available financial resources sufficient to support its academic and other activities. It manages its financial resources and allocates them in a way that reflects its mission and purposes. It demonstrates the ability to respond to financial emergencies and unforeseen circumstances.

9.2 The institution is financially stable. Ostensible financial stability is not achieved at the expense of educational quality. Its stability and viability are not unduly dependent upon vulnerable financial resources or an historically narrow base of support. The institution's governing board retains appropriate autonomy in all budget and finance matters; this includes institutions that depend on financial support from an external agency (state, church, or other private or public entity).

9.3 The institution's multi-year financial planning is realistic and reflects the capacity of the institution to depend on identified sources of revenue and ensure the advancement of educational quality and services for students. The governing board reviews and approves the institution's financial plans.

9.4 All or substantially all of the institution's revenue is devoted to the support of its academic purposes and programs. The institution's financial records clearly relate to its educational activities.

9.5 The institution and its governing board regularly and systematically review the effectiveness of the institution's financial aid policy and practices in advancing the institution's mission and helping to ensure that the institution enrolls and supports the student body it seeks to serve.

9.6 The institution ensures the integrity of its finances through prudent financial management and organization, a well-organized budget process, appropriate internal control mechanisms, risk assessment, and timely financial reporting, providing a basis for sound financial decision-making.

9.7 The institution establishes and implements its budget after appropriate consultation with relevant constituencies in accord with realistic overall planning that provides for the appropriate integration of academic, student service, fiscal, development, information and technology and physical resource priorities to advance its educational objectives.

9.8 The institution's financial planning, including contingency planning, is integrated with overall planning and evaluation processes. The institution demonstrates its ability to analyze its financial condition and understand the opportunities and constraints that will influence its financial condition and acts accordingly. It reallocates resources as necessary to achieve its purposes and objectives. The institution implements a realistic plan for addressing issues raised by the existence of any operating deficit.

9.9 Opportunities identified for new sources of revenue are reviewed by the administration and board to ensure the integrity of the institution and the quality of the academic program are maintained and enhanced. The institution planning a substantive change demonstrates the financial capacity to ensure that the new initiative meets the standards of quality of the institution and the Commission's Standards.

9.10 Institutional and board leadership ensure the institution's ethical oversight of its financial resources and practices.

9.11 The institution's financial resources and transactions are audited annually by an external auditor in accord with the generally accepted auditing standards for colleges and universities as adopted by the American Institute of Certified Public Accountants. Board policies and institutional practices ensure the independence and objectivity of the auditor and the appropriate consideration of the audit by the governing board. For public and independent institutions part of a larger system or corporation, the audit provides sufficient information about the institution's finances to support a determination regarding the sufficiency and stability of the institution's financial resources. In all cases, the audit and management letter are appropriately reviewed by the institution's administration and governing board who take appropriate action on resulting recommendations or conclusions.

9.12 The institution directs its fund-raising efforts toward the fulfillment of institutional purposes and conducts them in accordance with clear and complete policies that stipulate the conditions and terms under which gifts are solicited and accepted. The institution accurately represents itself and its capacities and needs to prospective donors and accurately portrays the impact that their gifts can reasonably be expected to have. Gifts are promptly directed toward donors' intentions.

9.13 All fiscal policies, including those related to budgeting, investments, insurance, risk management, contracts and grants, transfers and inter-fund borrowing, fund-raising, and other institutional advancement and development activities, are clearly stated in writing and consistently implemented in compliance with ethical and sound financial practices.

Institutional Effectiveness

9.14 The institution has in place appropriate internal and external mechanisms to evaluate its fiscal condition and financial management and to maintain its integrity. The institution uses the results of these activities for improvement.