VCs must learn to manage finances

Recently, I came across a shocking article in the Deccan Herald (July 19) about the gross financial mismanagement by the Karnatak University, Dharwad. The report revealed unauthorised expenditures, illegal recruitments, loans to the tune of Rs 600 crore, and the government’s inability to repay the loans. The minister for higher education stated that there was no accountability or financial discipline in universities, which compelled me to share my insights on fiscal management, drawing from my experiences during my tenure as vice chancellor (2006–10).

Judicious management of finances is a basic requirement for the development and health of the University. Yet, most Vice Chancellors (VCs) do not diligently engage themselves in fiscal management; they leave it to subordinate officials who are not necessarily visionaries, farsighted, or concerned about the long-term welfare of the institution. Their business is to resolve routine issues.

The annual budget plans are very important, as they not only reveal the current choices made but also reflect on how they are likely to affect the future of the institution. Hence, a VC with vision, concern, and commitment will provide leadership in preparing annual budgets with innovative ideas. In doing so, routine work becomes more meaningful and delightful, allowing the undertaking of needed developmental work towards fulfilling the varsity’s mission.

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I took charge of KUD on October 25, 2006. In the subsequent months before March 2007, I was compelled to approve the dissolution of some deposits to meet certain expenditures. It caused me colossal distress and forced me to get to grips with fiscal management. My engagement with finance management is a long story, which I have narrated in the book Remodelling the Universities. Soon it became obvious to me that poor management of fiscal resources had intensified the existing woes at KUD; it required streamlining all receipts and expenditures, making both transactional and transformative changes, consolidating affiliations and other deposits (related to endowment lectures, gold medals, scholarships, etc.), and raising them to higher dividends. Such reforms resulted in a drastic reduction of unproductive labour and manpower requirements in the finance division and promoted better management of funds. So much so, infrastructure was significantly enhanced, including the construction of Basavapeetha, Vivekananda Study Centre, Natural History Museum, a Social Science Block, a Multimedia Centre for the Department of Journalism, and so on, with grants from the UGC/state government and the varsity’s own resources. The various reforms successfully revived cash flow, helped create a corpus fund, and attracted funding from R&D agencies.

It is evident, therefore, that universities can generate resources by tapping into industry linkages, the potential of their alumni, offering consulting services, and so on. On October 24, 2010, I handed over a financially sound and glorious university to my successor. How the university has deteriorated over the years is an enigma and an embarrassment for
all stakeholders.

Evidently, judicious and vigilant management of finances is crucial for state universities, which perennially suffer from a crunch of funds. The universities must devise their own ways of fiscal management that are region- and institution-specific. Fiscal management is an art, and it must be addressed scientifically. Likewise, the prevention of leakages is equally important. Squandering taxpayers’ money is unpardonable.

Erring institutions and officials must be dealt with with iron hand. In several universities, including our state university, erring VCs are found; inquiries are held, but reports are archived, and no action is taken. Leniency not only promotes mismanagement but also emboldens others to indulge in malpractices in all walks of life! Lastly, the State Governments must also apprehend their own accountability in the appointment of VCs and the nomination of Syndicate and Academic Council members and refrain from influencing universities for gratuitous favours.

(The writer is former vice chancellor of Karnatak University, Dharwad)