Introduction
Every institution must have a budget team to oversee the spending of money. Without this, transparency and accountability will not be promoted. This may lead to embezzlement of funds by the op management, leading the institution t bankruptcy. Institutions that have strong teams to oversee the implementation of the budget have always been successful. His is because they have a strong foundation on which to make progress without limitations. The Massachusetts Institute of Technology (M.I.T) is one such institution which values the importance of accountability and transparency in handling financial matters. Because of this, the institution has always been on the safer side. This paper is designed to analyze the PTA budget of the campus. This issue is very crucial as it ensures that the school budget is strictly followed. There are several cases where school principles and their deputies have been accused of holding campuses at ransom. In all academic institutions, the Parent Teacher Association (PTA) plays a significant role. In essence, this association bridges the gap between the parents and the teachers. Through nominated members, parents are represented in school matters. There is always a budget set aside for the representatives of the parents in schools. Understanding how the budget committee allocates funds to the group is therefore very important.
For leaders, it is crucial to have some financial management skills. This is crucial as it helps one to handle financial matters seamlessly without losing the trust of the people being led. Apart from this, it is always important to understand how institutions run their operations. Leaders are expected to be knowledgeable. By studying how the Massachusetts Institute of Technology handles its financial matters, I will be in a better position to learn about some leadership skills and qualities.
Data Collection procedures
Talking to the financial manager
As a public institution, information about MIT is in the public domain. This is so in order to promote transparency and accountability within the campus. Most of the information I have about the institution is based on the one on one conversation I had with the financial manager of the school. Although he did not disclose everything to me, he gave me useful information about the campus’ budget-making process and how they settle on the amount to be allocated to various sectors. The information I received from him was very crucial as it acts as the main source. However, I collected information from of the sources in order to ensure there is no misrepresentation of facts. Most of the figures in the financial records tally, meaning the validity of the information is not questionable.
In addition to the information from the financial manager, I got extra information from the school’s website. As already argued, the institution is public, hence any information about the school can be accessed at any time. For instance, the website of the institution has the necessary information about the school’s budget and allocation of resources. In an attempt to promote accountability, the website acts as a good source of information about the budget o the institution. Extra data collection methods include talking to the chairperson of the PTA about the amount received and how such matters are handled in the institution.
Results
Determining the budget
At MIT, the institution understands that budgeting is the best way of delegating financial matters in order to promote efficient and appropriate management of money. In a fiscal year, the institution caters for several departments that need funds for their operations. The amount that the institution allocates to any sector depends on the availability of funds and the intended purpose of the funds. Through this, the institution gets to appropriately determine the amount that each department should receive in a fiscal year (Gewin, 2013).
The budget data I found
In the fiscal year 2014, the institution’s operating expenditures are approximated to be around $2,908.6 million. This is the amount that all the operations in the school should add up to at the end of the year. Of this amount, 48.1% ($1,397.9) was set aside for the purpose of sponsoring research and other related activities. Construction and unsponsored research were allocated 23.8 % ($692.0) of the total amount. 0.4 %( $12.8) was directed to Alumni Association while 23.4 % ($681.5) was set aside for General and administrative purposes. It is in this category that PTA belongs to. Further, the money allocated to the General and administrative purposes is divided into various departments where PTA is one of them (Budget Of The Massachusetts Institute Of Technology, 2013).
Budget year calendar
Most academic institutions have their budgets tallying with the academic year calendar. This is the case with Massachusetts Institute of Technology, which has its academic year commencing in June to March. This means that the budget estimates will be operational until March 2015 when the academic year will come to an end.
Source of the funds
In America, both the federal government and state governments play a role in facilitating education (Ross, 2013). As stakeholders, both governments have a budget for such institutions. Although much of the amount in the budget comes from the school fees the students pay, the federal and state governments take pa in allocating some funds to the school. The local district also allocates funds to the institution.
Data and its implications
As already argued above, PTA falls under General and Administrative section. This category involves all the departments hat are tasked with ensuring the institution has smooth operations. Of the total amount this category received, only 8 % ($54.52) was channeled t PTA. This amount caters for the organization and ensures that there is a smooth relationship between parents and teachers. It takes care of the welfare of the parents as well as catering for the needy students.
How the budget was spent
In financial management, budgets give a rough estimate of what might be spent. This means that spending can end up being more or less than the amount allocated. In the 2013/14 academic year, for instance, the Association did partially spending. This was attributed to lack of major activities that would call for allocation of funds. The unspent amount was returned to the institution’s financial department for re-allocation in the next financial year.
Whether the budget can carry over to the next year
In practice, a budget is an estimate of what an institution/department is likely to spend in a single financial year. This means the allocations given are expected to be utilized in that specific year. However, there are cases where the amount allocated may not be fully spent. When this is the case, the remaining amount does not extend to the next year. Instead, it is returned to the finance department of the institution for reallocation.
Who monitors the budget
In Massachusetts Institute of Technology, all financial matters are addressed and monitored by the institution’s chief financial accountant whose role is to oversee spending and determine whether spending is done correctly. At the end of the year, every department that received some allocation is required to account for how the money was used over the period (Gewin, 2013). This way, it is easy to monitor the budget. The budget is audited by the internal auditor general.
Recommendation and evaluation
According to the findings Massachusetts Institute of Technology’s financial department has done great work in monitoring the budget. Without proper auditing, the rate of embezzlement of funds would increase, putting the institution at risk. The fact that PTA returned art of the amount allocated to them means that they did not have many projects to utilize the amount.
According to my evaluation, funding and managing of the budget is excellent. By requiring all departments to be accountable at the end of the year, there are high chances that accountability and transparency will be promoted. In most institutions where such strict mechanisms are not employed, those responsible have always taken advantage of the innocent members. However, this is not the case with Massachusetts Institute of Technology.
According to my view, the departments should ensure that they have clear goals at the beginning of the financial year. If this is the case, the budget will only allocate resources that can be utilized within the fiscal year in question. This will minimize wastage and over-allocation of funds to departments.
References
Budget Of The Massachusetts Institute Of Technology. (2013). Science, 9-10.
Gewin, V. (2013). Colin Lonsdale, director, Haystack Observatory, Massachusetts Institute of Technology, Westford, Massachusetts. Nature, 1276-1276.
Ross, K. (2013). Needs-based resource allocation in education: Via formula funding of schools. Paris: UNESCO, International Institute for Educational Planning
