Financial statements

David Bakan (dbakan@YORKU.CA)
Thu, 23 Oct 1997 18:28:19 -0400


Dear Ms Clark:

I have your memo of October 17, 1997 about York's finances and the slides in
front of me. Your memo invites input. Here are some of my thoughts.

I once heard a lecture on the question of what constitutes good accounting.
The major point was that good accounting is that which serves the decision
process the best. That is, the information should be of such a nature as to
reveal the options that may exist in the situation, so that decisions made
will be fully informed.

I have had several problems with reading the various statements that have
come to me over the years.

First, they do not sufficiently allow the mind to go between the details to
the bottom line. This, I believe has been associated with the "budget
envelopes" method of accounting, where a construct of convenience is turned
into a hard objective fact, and where it is not easy to consider the
prioritisation among the "budget envelopes." That is, too often, just
because money is assigned to a particular fund it is representing a priority
decision.

Second, virtually all the discussion is about the income side, and little
about expenditure. I have never seen any presentation which would allow a
proper assessment of how expenditures may be made with respect to serving
the major object of the university, which is the advancement of learning.
When I was on the Executive Committee of YUFA I used to see the reams of
dumped computer print-outs. But I never saw a really careful delineation of
the expenses by categories which would usefully allow priority
considerations to be applied.

Third, one of the great problems universally is the fact that institutions
have a tendency to spend too much money on administration. I would someday
like to see a proper breakdown of the way in which we spend money on
administration. There is the whole category of P and M, and the money spent
by them. There are all the academics assigned to administrative posts.
There is the huge amount of faculty time devoted to administration. Indeed,
"service," that is administration, is taken into serious account with
respect to promotion and tenure.

Fourth, I am concerned that there is virtually no information in common
circulation about the way in which conflicts of interest, waste, frivolous
uses and inefficiency are monitored and controlled for.

David Bakan October 25, 1997.

---End of forwarded mail from York University Faculty Association List <YUFA-L@YORKU.CA>