Communicating Performance: The Extent and Effectiveness of Performance Reporting by U.S. Colleges and Universities
Gordon, Teresa P., Fischer, Mary, Journal of Public Budgeting, Accounting & Financial Management
Performance measures have long been a topic of interest in higher education although no consensus on the best way to measure performance has been achieved. This paper examines the extent and effectiveness of service efforts and accomplishment reporting by public and not-for-profit U.S. colleges and universities using survey data provided by the National Association of College and University Business Officers. Effectiveness is evaluated using the Government Accounting Standards Board (GASB) suggested criteria. Regression analysis suggests an association between the extent of disclosure and size, leverage, level of education provided, and regional accreditation agency. Private institutions rate themselves as more effective communicators. Effectiveness of communication is also associated with the extent of disclosure, level of education provided and accreditation region.
Despite repeated calls for accountability from a variety of sources including the U.S. Congress, the higher education community has not found a satisfactory way to measure and report its performance. Selective reporting of financial and non-financial data has become the norm for higher education institutions. For example, they report such diverse information as retention rates, library holdings, student scores on national achievement exams, deferred maintenance, and endowment giving. Although several institutions have designed models to assess student learning outcomes, most institutions insist that such initiatives cannot be replicated or that education outcomes cannot be measured (Couturier & Scurry 2005). Unlike the statistical section mandated for a government's comprehensive annual financial report (CAFR), performance indicators are voluntary disclosures for higher education.
Government and not-for-profit organizations have come under increasing criticism for placing too much emphasis on financial control as well as suffering from an excessive proliferation of performance indicators (Modell 2004) without linking the indicators to inputs or outputs. Measuring performance plays a very important part in translating organizational strategy into results. Various nontraditional performance systems have been devised to aid in selecting and implementing measures without linking the measures as a means to demonstrate accountability (Pun & White 2005). Government budget officers and others claim performance measures improve communication, increase awareness about service quality results, and enable changes in strategies to ensure results (Willoughby 2004). However budget officers do not effectively use performance measures as tools to cut costs or amend spending levels.
This exploratory paper first examines the extent of performance reporting by colleges and universities (C&Us) in the United States and then reports on the effectiveness of the information communicated. Evaluation of effectiveness is based on the nonauthoritative guidance for communicating performance information developed by the Government Accounting Standards Board (GASB 2003). The GASB criteria are guidelines for external reporting of relevant, reliable performance information about the results of the institution's programs and services. Data on the type of performance indicators used and the importance and effectiveness of the communication was supplied by institutions themselves in response to an on-line survey of members of the National Association of College and University Business Officers (NACUBO).
We find that the extent of performance reporting is influenced by size, leverage, accreditation region and level of education provided. Private C&Us evaluate their communication of performance information as more effective than public C&Us. Other factors that influence effectiveness include the number of different types of indicators reported, level of education provided and accreditation region. While institutional size influences the extent of reporting, it had no clear relationship with the effectiveness of performance reporting. …