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and invoice, and any correspondence in regard to adjustment is carried on by the departments, except in special cases where the institutional business office or the business manager may be requested to handle such details.

The business manager relies upon the experts at the educational institutions for specifications as to make and quality of equipment and material required for educational departments. In certain lines he has prepared, through the assistance of the laboratories at the educational institutions, standard specifications with provisions for analysis of samples, and for checking analysis of material received against sample.

The business manager furnishes each institution with copies of contracts entered into at semiannual lettings for standard supplies. These semiannual contracts cover supplies for definite quantity and definite delivery conditions. Requisitions for supplies under these contracts are made out as needed by the institutions.

ACCOUNTING AT INSTITUTIONAL BUSINESS OFFICES. As has been stated previously, the detailed accounting with budget appropriations is done in the institutional business offices, and these offices are, therefore, the only sources of information concerning the internal business operations of the institutions.

Through the pay roll and purchasing system, together with abstracts of disbursement vouchers and monthly summaries of funds and appropriations, disbursement transactions are handled in a fairly satisfactory manner, so far as funds are concerned, but the accounts with budgets and receipts are not so satisfactory, though in some ways well kept. No ledger accounts are kept with plant assets, the principal of endowment funds, or with investments. It is impossible to secure from the institutional business offices complete information concerning the assets and liabilities of the institutions. Accounts receivable are not concentrated in any one place, and collections of accounts due institutions are left largely with the departments. In a general way it may be said that the institutional business offices do not keep sets of books, but instead, collections of registers, with some ledger accounts. It is with reluctance that the commission feels it necessary to call attention to these matters for the reason that the work in the business offices of each institution, so far as it goes, is quite well done, and it is remarkable that so much work can be done with so few employees. The foregoing remarks are intended as a compliment to the personnel in the business offices, and as a criticism of a general business situation at the institutions.

The instructional and other departments at the university and the agricultural college are to a large extent separate business units. This plan throws a great deal of responsibility concerning business matters on the clerks and heads of these departments, and scatters through many departments business details which are usually handled in central business offices with greater efficiency and at less expense. This arrangement makes it impossible for the central business office to do the detailed accounting which one usually expects in a central business office, and which is necessary if proper analyses of expenditures are to be made. While it is possible to scatter some accounting problems through several offices with periodic assembling of totals in a central office, this scattering should be under the direction and supervision of the central business office. It seems that no such authority for direction and supervision exists in the business offices at either the university or the agricultural college, and whatever detailed accounting is carried on in the separate offices is done without the supervision of the central office. While it may be the policy of the board of administration to keep the business offices at each institution as small as possible by scattering business details through the departments of instruction, it seems to the commission that it is highly important to point out the danger of scattering these business details in such a way that there is no general supervision over business matters.

The relation of a proper accounting system to an efficient and effective educational administration needs special emphasis. If the presidents and the board of administration are to administer the educational institutions intelligently and properly, they must have available at all times reliable financial statistics covering past transactions for use in planning for the future.

FINANCIAL REPORTS. The State educational institutions of Kansas have not published any satisfactory financial reports for a number of years, and as a result it has been impossible to compare in a proper manner the income and expenditures of the Kansas educational institutions, one with another or with similar institutions of other States. It is true that financial summaries have been published for some of the institutions in the biennial reports, and that the business manager in his biennial reports has given a summary of income and expenditures classified as to funds and appropriations, but these reports are not complete, and do not give the information needed for administrative purposes and for satisfactory comparisons with other institutions. BUSINESS ORGANIZATION AND DIRECTION AT EDUCATIONAL

INSTITUTIONS. At the three normal schools the direction of business matters can undoubtedly receive the general oversight of the presidents at each institution, if efficient business officers are provided to relieve the

presidents of the minor details of business administration. At the State university and the agricultural college, however, on account of the complicated organizations, larger plants, and large volume of business transactions, it seems desirable that careful attention should be given to the consideration of a reorganization of the business activities. There are many functions which naturally group themselves under the head of business matters, such as financial accounting, the care and maintenance of buildings and grounds, the operation of the heating, power, and lighting plants, and supervision over accounting and business matters of the entire institution. If a president is to administer an institution properly, he is entitled to have at his right hand an efficient business man who can look after these business details for him.

At the university, with a separate medical school and hospital located in Kansas City, Kans., there is an important problem in connecting up the business office in Kansas City with the university business office, if the chancellor of the university is to be held responsible for business matters at the hospital. It seems important to call attention to this matter at this time, as with a separation of approximately 40 miles from the university, it is very desirable, from a business point of view, that there should be the closest relation between the business office in the hospital at Kansas City and the business office at the university, and, as a matter of fact, the business office in Kansas City should be a branch of the business office of the university. Similar geographical separations of hospitals and medical schools from the main university have developed serious administrative problems in other universities where there has not been a definite understanding concerning supervision of business matters by the central university business office, and therefore it is well that this matter be taken in hand while the institution in Kansas City is yet small.

At the agricultural college a similar situation obtains with branch experiment stations in different parts of the State. The business matters of these branch stations should not only go through the business office at the college, but the methods at the stations should be checked by the office at Manhattan.

RECOMMENDATIONS. After considering the foregoing analysis of the business methods of the business manager's office at Topeka, and the business offices in the several educational institutions, the commission begs leave to make the following recommendations:

1. CHANGES IN ACCOUNTING METHODS, It is recommended that the accounting system at the institutions be modified and improved so as to bring the accounting procedure

into conformity with approved accounting methods, and in harmony with the best practice at leading American universities and colleges. This modification will require very little additional work, and the additional work required will be saved in other places by the convenience brought about by the improved methods.

The new or modified books of account suggested are the following: 1. A General Ledger, to contain the following classes of accounts:

a. Assets and liabilities.
b. Income and expenditures.

c. Budget control accounts. 2. Budget Ledgers.—The present budget ledger form at the uni

versity and the agricultural college will do, but a revised classification is recommended. A salaries and wages ledger

is also recommended for the classification of salaries and wages. 3. Journal. 4. Cash Book.-A new form for daily proof of cash. 5. Classification of Receipts. For chronological record of cash

receipts, with classification as to sources. 6. Classification of Expenditures. This is a summary sheet to be

used in bringing together on one sheet all the expenditures

of a department, classified as to purposes of expenditures. The introduction of the foregoing records will bring the bookkeeping system into systematic form, and will make it possible to make out financial reports without much difficulty.

2. FINANCIAL REPORTS. The commission recommends that each institution issue annually a financial report which will give the administrators, the board, and the public at large accurate and satisfactory statements of the financial situation at each institution. These reports need not be elaborate, but it seems advisable that at least the following should be included: 1. A balance sheet, giving all assets and liabilities, with supporting

schedules. 2. A condensed statement of income and expenditures. 3. A detailed statement of income classified by the principal

sources of income. 4. A statement of expenditures by departments, and other divi

sions classified as to salaries and wages, other expenses, and

equipment, and physical plant extension. The financial reports may be expanded to suit the needs of the several institutions, but it seems that none of the foregoing can be omitted. Reports of this kind, if properly made, will give at a glance a picture of the financial transactions of each institution. It is recommended that reports of leading American colleges and universities be consulted as to style and schedules, and that the standard classification of expenditures adopted by the Association of University and College Business Officers be used as a standard for expenditure classifications.

3. THE CONCENTRATION OF BUSINESS ACTIVITIES AT INSTITUTIONS.

It seems to the commission advisable to suggest to the authorities, especially at the university and the agricultural college, to consider carefully and thoroughly the propriety of centralizing business activities in the business office by bringing together under central control the tag ends of business matters that are now scattered through several departments. This method is now followed in practically all the larger colleges and universities in America, and seems to be the only feasible way for fixing definite responsibility and unity of action in business matters, and at the same time bringing together at one point both business operations and business record keeping.

4. TRUST FUNDS. The commission finds no adequate provisions for handling gifts to the Kansas State educational institutions, either in the form of permanent endowment or for current use. Gifts in the form of lands, buildings, or equipment can be received and used without difficulty, as such gifts will not require investment or detailed accounting extending over a period of years, but gifts of funds for endowment or for current use, however, require special treatment, as funds of this sort must be safe-guarded in every way as to investment and use, if the purposes of the donors are to be fulfilled. Trust funds must be segregated from general income, as donors could hardly be expected to make gifts to an institution which might eventually be turned into the general fund of the State, and perhaps be lost to the institution and to the specific purpose for which given, by the failure of the legislature to reappropriate such funds to the institution concerned.

Gifts to educational institutions usually come from alumni, former students, and friends of the institution, who, for one reason or another, desire to make gifts to the institution in which they are interested. These persons may not be interested in the State as a whole, but they are interested in the college or university in which they received their education or with which they have been associated. With the growth of the country in wealth, there is an increasing tendency to make gifts to educational institutions, and in recent years State universities and colleges in several States have been the recipients of munificent gifts, and several generous gifts have been made to Kansas State educational institutions. The university, the agricultural college, and the normal school at Emporia have been graduat

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