Resources

Since 1991, Michigan Tech has significantly reorganized its human resources and upgraded its computing technology to ensure the efficient and effective management of the University's financial operations. The University has clearly assigned responsibility for its primary financial functions to specific, qualified individuals. It has also integrated strategic planning with budgeting to insure that campus constituencies have appropriate input into financial decision making.

Administrative Structure

Primary responsibility for the management, operation and oversight of the University’s financial activities resides with eight officials of the University:

1. President;
2. Executive Vice President and Provost;
3. Senior Vice President for Advancement and University Relations;
4. Vice President for Governmental Relations and Secretary to the Board of Control;
5. Chief Financial Officer and Treasurer to the Board of Control;
6. Director of Budget, Planning, and Faculty Personnel;
7. Internal Auditor; and
8. Director of Financial Aid.

To identify qualified candidates for these important financial management positions, the University conducts position searches following guidelines in the MTU Hiring Guide [1.5B2]. The top five administrators listed above have been hired through national searches since 1990. All eight administrators have significant work experience, professional certification, and/or education that makes them well-qualified for the responsibilities that they hold.

Partly in response to financial difficulties in 1991 (discussed below), the President reorganized the upper administration (see Chapter 1, Response to Concern 8) to clearly assign responsibilities for financial matters to specific individuals. In 1991, he assigned primary responsibility for the University budget to the Executive Vice President and Provost, who is ably assisted by the Director of Budget, Planning, and Faculty Personnel. Their active and continuing role in University planning and management make them well-suited for budget responsibility. In 1992, the President created the position of Chief Financial Officer and Treasurer to the Board of Control to oversee the University’s financial operations and financial reporting. This assures that management of the University’s day-to-day financial operations receive the undivided attention of a qualified individual. Previously, management of the University’s financial affairs were the responsibility of the Vice President for Operations and Finance, who also had responsibility for Facilities Management, Human Resources, Auxiliary Enterprises, Institute of Materials Processing, Bureau of Industrial Development, and Accounting. The Division of Auxiliary Services, which reports to the Executive Vice President and Provost, is now responsible for student housing, food service, and retail operations. It was reorganized in 1995 into two units managed by a Director of Residential Services and a Director of Retail Services, for an annual budget savings of $250,000.

The Chief Financial Officer and Treasurer to the Board of Control has dual reporting responsibilities: As Treasurer to the Board of Control, he reports directly to the Board, and as Chief Financial Office he reports to the President of the University. The Internal Auditor also reports directly to the Board of Control through the Secretary to the Board. The Internal Auditor is responsible for providing assurance that the University's accounts are accurate, expenditures are properly authorized, and that the University's business procedures are adequate. The Goal 8 Committee recommended that the Board's financial oversight would be enhanced by establishing a finance subcommittee of the Board to develop an in-depth understanding of the University’s financial management and operations. This was accomplished in July 1997.

In 1996, the position of Senior Vice President for Advancement and University Relations was created to manage external fundraising. In preparation for a $100 million capital campaign beginning in 1998, the Senior Vice President has completely reorganized the advancement area, assisted with plans to hire college and school development officers, and hired a new Executive Director of Development and the Michigan Tech Fund. The Michigan Tech Fund, which oversees the fundraising activities and receives gifts on behalf of the University, is governed by a Board of Trustees and is audited annually by an independent accounting firm. The President also plays a major role in fundraising activities. The National Advisory Board, as well as industrial advisory boards and alumni academies instituted in the departments, colleges, and schools, provide a network of interested individuals who can be asked to assist in fundraising.

The Director of Financial Aid is responsible for managing financial-aid programs. He reports to the Executive Director of Enrollment Management, who in turn reports to the Provost. These two positions result in oversight of financial aid at the highest level.

Financial Decision-Making Process

The budget process is now integrated with the strategic planning process (see Chapter 2). This assures consistency between long-range goals and short-term resource allocation. It also invites widespread input into the budget process, which enhances the effectiveness and credibility of financial decisions. Before 1991, minimal discussion and involvement by the campus community in the budget process fed an atmosphere of mistrust of the upper administration.

The budget process begins in the fall of each year with an evaluation of current internal strengths and weaknesses and of progress toward our goals. The Executive Vice President and Provost meets with all campus units to report on last year’s progress and discuss budget priorities for the coming year. All units then measure their progress toward their strategic initiatives and set new, annual goals, including a prioritized list of initiatives that would require new resources from central administration. In January, the Director of Budget, Planning, and Faculty Personnel, in consultation with the President and other senior administrators, develops a first draft of several budget scenarios for the coming year. These are shared with the campus community in multiple meetings and public forums. During the spring, the Executive Vice President and Provost and the Director of Budget, Planning, and Faculty Personnel review all of the unit initiatives and make recommendations to the President with regard to proposed funding. The final budget is normally approved by the Board of Control in June (subject to approval of a State budget by the Governor).

Physical Resources

Computing hardware and physical space are adequate for carrying out financial functions. Administrative computing relies on the BANNER® system (see Chapter 10) to process financial information. This system has generally met the University’s needs in an acceptable, although not outstanding, manner. Since installation of the BANNER® finance module in 1992, significant stoppages in processing or reporting financial information have ceased, and auditors have not noted any significant problems with the system that would impair normal University operations. While the system has functioned well for most routine transaction processing, the inability to easily modify BANNER® software has led to some problems. For example, the University has been unable to easily modify the software for optimal contract billing by research accounting (see Chapters 8 and 10). Qualified personnel with appropriate software programming skills are needed to write, implement, and maintain software modifications which would be compatible with BANNER®.

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