This study is an extension of previous research in higher education finance for which the 1994 classification of institutions by the Carnegie Foundation for the Advancement of Teaching was a key independent variable. The Foundation changed its classification of institutions in 2000, and the authors investigated the resultant impact of the change on their prior empirical research in higher education finance. The results of this study suggest that the change in the Carnegie classification system is substantive. However, the findings of prior research were not so fundamentally altered as to corroborate critics of the system who claim that the revised classification destroys the comparability of institutions. Upon the occasion of its centennial year in 2005, the Carnegie Foundation can be expected to continue improvement of a system so influential in the conduct and the results of institutional research.
The first author was the principal investigator on research in higher education finance for which the 1994 classification of institutions by the Carnegie Foundation for the Advancement of Teaching was a key independent variable. The Foundation changed its classification of institutions in 2000. The new system emphasizes teaching, specifically the number and type of degrees an institution awards, rather than the conduct and external funding of research. The former categories of Research and Doctoral institutions have been replaced by a new taxonomy of Doctoral--Extensive and Doctoral--Intensive institutions. The classifications of master's and baccalaureate institutions remained in place (Basinger, 2000). Most of the published scholarship on the 2000 classification has focused on community colleges, ignoring four-year institutions.
The instant study explores the extent to which the results of prior empirical research in higher education finance changed because of the new classification system. Past research in higher education finance conducted by the first author focused on managerial accounting practices in colleges and universities, leading issues in higher education finance as perceived by college and university chief financial officers (CFOs), and outsourcing practices in higher education institutions.
MANAGERIAL ACCOUNTING PRACTICES
Approaches to planning and control in the accounting systems of organizations may be defined as "managerial accounting practices". These internal accounting practices include systems of budgeting, costing, pricing, and performance measurement, as well as initiatives in outsourcing and efforts to change organizational behavior through fiscal policy. Effective budgeting systems address outputs of institutions (DeHayes and Lovrinic, 1994), planning for cash (Schwartz, 1992), and planning for the acquisition of long-term assets (Mangan, 1993). Successful approaches to budgeting also provide the flexibility to deal with changes in the volume of operations (Reed, 1992) and to make adjustments to budgets during the fiscal year (Howell and Sakurai, 1992).
Costing is the accumulation and analysis of cost information for an organization and its constituent parts. Costing remains, for most higher education institutions, in a developmental stage. More institutions, however, are recognizing the need to assign indirect costs to academic and administrative units, in order to arrive at a full cost of operations for the unit (Dempsey, 1997). A few institutions have embraced the activity-based costing model.
Pricing practices in colleges and universities vary by the extent to which an institution can subsidize price through reserves of institutional wealth or appropriations from a state (Winston, 1997). Many institutions, particularly private colleges and universities, have raised tuition and buffered the effect on affordablility by offering discounts in the form of institutional financial aid (Lapovsky and Hubbell, 2003). …