What is good university financial management?

Abstract

In the current and foreseeable harsh UK higher education environment, aspiring to best- practice financial management will be key to ensuring the prosperity – and indeed the survival – of any university. In this article I argue that good university financial management should provide stability to the institution, allow for investment as well as renewal and the exploitation of opportunity, be transparent enough to facilitate accountability and good governance, and ensure that the institution allocates resources efficiently in the context of its strategic plan. I explore in detail the issues relating to this fundamental definition of good financial management, including the role of financial management in inducing stability, short-term solvency and reserves, managing financial risk, capital expenditure and long-range planning, developing a diversified funding base, embedding good financial management in university culture, the relationship between financial planning and strategic planning, and financial accounting and control.