Case 5.1: Heartland Community College
WOOD TECHNOLOGY PROGRAM BUDGET
You have taken over as Interim Dean for the Wood Technology Program (WTP) at Heartland Community College (HCC). WTP is in turmoil – its previous director was forced to resign after failing to institute reforms to address the program’s structural deficit precipitated by a continued decline in enrollment and limited funding.
The College is considering eliminating the Wood Technology program. Industry leaders have advised the President and Board of Regents that this would not be wise given current labor shortages. Additionally, the Bureau of Labor data shows that wages in construction-related fields were rising faster than national wages. A recent survey showed that high school students and their parents viewed trade schools as credible as traditional colleges. However, WTP did not connect with high school seniors as they began to explore career options. HCC centralized student recruitment and admissions nearly three decades ago, and that process focused on recruiting students who would transfer to four-year colleges. To leverage opportunities, you expect to hire additional full-time staff to meet recruitment and teaching needs.
The Board of Regents voted affirmatively on your appointment and is willing to give you some latitude but expects you to formulate strategies to eliminate the existing deficit while preserving existing programs. The relevant personnel and program cost data, tuition rates, facility capacity, student enrollment, and staffing levels are detailed below.
ASSIGNMENT
Using this information, prepare a flexible program budget in Microsoft Excel that answers the following questions:
- Given projected enrollment and cost data, is WTP projecting a surplus or deficit? Develop a program budget to ascertain the direct costs, indirect costs, total costs, and WTP’s projected surplus/(deficit).
- At the time of preparing your budget, admissions staff were working tirelessly to meet enrollment targets. Assuming the final enrollment numbers are 20 percent above or below current projections, report WTP’s projected budget surplus/(deficit).
- Assuming staff can work up to the benchmark productivity rate, what impact would this have on WTP’s bottom line?
- You are considering eliminating the Boat Building program. The program is quite small, and operating costs per student were higher than those in Carpentry or Construction. Assuming all other programs continue to operate at baseline – what is the change in operating performance? Are end-of-year results better or worse?
- Assuming you have flexibility in proposing a budget for the Board of Regents to review and approve, what strategy would you recommend, and what factors limit the flexibility of your proposed strategy?
PERSONNEL AND INDIRECT PROGRAM COSTS |
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1. Salaries |
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Interim Dean, Wood Technology Program |
$155,000 | |
Assistant Dean, Wood Technology Program |
$125,000 | |
Secretary to the Dean |
$65,000 | |
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