In search of financial sufficiency in the Spanish public university: From financing to the cost control and cost management

Abstract

Purpose: The current socio-economic context characterized by restrictive budgetary policies in the countries of the European Union has led to a reduction in public funding in the Spanish public university raising the deficit in many universities. That is why, while they are completing the implementation of a cost accounting model (Modelo Canoa) to quantify their real financial needs, are also increasing academic rates with the limits established in the Decree-Law 14/2012 of 20 April as practically the only resource. This fact may ultimately affect demand. It is urgent to find therefore new sources of private funding as well as implementing techniques to control and reduce costs justified by the extreme financial situations of some universities.

Design/methodology: These new sources of private funding as well as the specific techniques of control and cost management that are used in public universities outside of Spain are described. It has also made a poll to the managers of the Spanish public universities considering the diversification of funding sources and the feasibility of adopting specific techniques of control and cost management to help the achievement of financial sufficiency.

Findings: Especially in the US universities, financing is more diversified and not depend so much of the increase in public rates. Specific techniques of control and cost management are also used and they are applicable to the Spanish case according to the opinion of the managers.

Research limitations/implications: 82% of managers have completed the proposed poll.

Originality/value: Identifying sources of private funding and specific techniques of control and cost management applicable to the Spanish public universities.