© 2014 KSM Business Services, Inc.

Metrics and Ratios for Higher Education

ABHE National Conference October, 2015

Nick Wallace, CPA Managing Director for Higher Education Services

2 ksmcpa.com

▪ Dashboards▪ Benchmarking▪ Questions and Answers

AGENDA

3 ksmcpa.com

▪ At their best when they:▫ Summarize/simplify complex data ▫ Highlight key performance drivers▫ Display graphically (Maybe even digitally)▫ Highlight pending problems

“You see, but you do not observe.”

Sir Arthur Conan Doyle (1859-1930), (Sherlock Holmes) A scandal in Bohemia, 1892

Dashboards for Higher Education

Less is Better

Focus on KPI

GRAPHICS!

Boards live in the future

4 ksmcpa.com

▪ At their worst when they are:

▫ Too comprehensive

▫ Focused on history

▫ Used as an apologetic for the past

Dashboards for Higher Education

They are ill discoverers that think there is no land, when they can see nothing but sea Sir Francis Bacon (1561-1626)

5 ksmcpa.com

▫ Provide concise analysis derived from available data.▫ Narrow the focus to important issues and key areas.▫ Explain trends, benchmarks, and targets clearly.▫ Demonstrate the impact on decision making.▫ Stimulate questions that explore issues beyond the data alone.

Ground Rules for Dashboards

6 ksmcpa.com

Suggestions For The Key Areas▪ Financial▪ Admissions▪ Enrollment▪ Faculty▪ Student Outcomes

▪ Student Engagement▪ Academics▪ Physical Plant▪ Student Satisfaction▪ External Ratings

http://agb.org/trusteeship/2011/januaryfebruary/the-most-common-performance-indicators-for-institutions-and-their

7 ksmcpa.com

Common Dashboard Indicators - Financial

8 ksmcpa.com

Common Dashboard Indicators-Admissions

9 ksmcpa.com

Common Dashboard Indicators-Enrollment

10 ksmcpa.com

KEY STEPS FOR EFFECTIVE DASHBOARDS

ContextPerceiving the data

Presentation

Presenting the data

Data

Procuring the data

11 ksmcpa.com

Context – User Understanding? Without sufficient context, more data does not equal more understanding.

1. Do administrators and boards fail to make good decisions because of a lack of information, or a lack of context?

2. Do decision makers battling competing priorities have sufficient time to establish the correct context for the data you present?

3. Do different users, from "accountants to theologians”, with varying needs and capabilities viewing the same data come to the same conclusion?

4. Do emotions such as apathy or fear block decisions makers from accepting and using

new tools? Context

12 ksmcpa.com

Data – How Much and What Items?

Data

Resolves Questions

Accurate and TimelyRelevant to Responsibility

Linked to Mission

13 ksmcpa.com

Data: Linked to MissionSAMPLE ASSESSMENT REPORT 1999-2000 Goals vs. Performance

STUDENTS: Attract students who can take full advantage of, and contribute richly to, this learning-centered environment, students who are academically capable and will benefit from the diversity of past experience and current interests among them. Goal Area Goal Performance Year-End

Status Enrollment 1020 new students 1031 Exceeded Quality 1060 SAT, 3.1 GPA 1061 SAT; 3.12 GPA Exceeded Diversity 15% minority

enrollment 15% Completed

Persistence 81% 78.8% Not met Four-Yr Graduation Rate

50% 40.6% Not met

Job Placement Rate 90th percentile 91st percentile Exceeded Longwood University

14 ksmcpa.com

Resource Sufficiency and

Flexibility

Primary Reserve Ratio

Are resources sufficient and

flexible enough to support the

mission?

Operating Results

Net Income Ratio

Is the organization living within its

means?

Balance Sheet Strength

Equity Ratio

Are the assets of the organization excessively

leveraged with debt?

Data: Resolves Questions

15 ksmcpa.com

Data: Relevant to Responsibility (Board)Taylor University Season Statistics Opponents Hitting 1490 At Bats 1426444 Hits 361309 Runs 179274 Runs Batted In 15277 Doubles 719 Triples 1224 Home Runs 15181 Walks 1276 Intentional Walks 12312 Strikeouts 330

16 ksmcpa.com

October Meeting: - Student Enrollment

- Student Quality

December Meeting:- Strategic Indicators- Financial Ratios

March Meeting:- Satisfaction Survey- Student Placement

May Meeting:- Faculty Salaries- Staff Salaries

Data: Accurate and Timely

Courtesy of Rick Staisloff, College of Notre Dame

17 ksmcpa.com

Suggestions for Successful Dashboards

DESIGN PRINCIPLE

S

Use graphic display.

Tell a story.

Provide acomparative

context.

Avoid jargon

and “budgetspeak.”

Spotlight key

information

.

18 ksmcpa.com

Cool, but not useful

More Data

Suggestions for Unsuccessful Dashboards

19 ksmcpa.com

Questions on Dashboards?

20 ksmcpa.com

▪ Characteristics include:1. Purposeful Comparisons2. Against individual Schools or groups of schools3. Including qualitative and quantitative data4. Focusing on

- Inputs (Money, people, etc.)- Process (Programs)- Outcomes/Impact (What happened)

5. Based on a desire to be “Typical”, “Better” or maybe “Best”

Successful Benchmarking

21 ksmcpa.com

1. Lack of Value Proposition (If we build it will they come?)2. Misunderstanding the environment (Expectations)3. Wrong data sets (Failing to choose good, too many or

too few comparisons)4. Failure to launch (Never gets off the gorund)

Challenges to Benchmarking

22 ksmcpa.com

1. Audit your situation2. Select your measures3. Form internal groups4. Collect the data5. Monitor the outcomes6. Use the Results7. Adjust the process

Steps in Benchmarking

23 ksmcpa.com

▪ Utilizing Seven Critical Success Factors:▫ Distinguished Faculty ▫ Stellar Programs▫ Distinctive Students ▫ Viable Financials▫ Strategic partnerships▫ Vibrant Community▫ Culture of Quality

Taylor University Report Card

24 ksmcpa.com

Compensation Ranking

Overall Satisfaction Terminal

DegreeMinority Spiritual

Commitment

Executive Dashboard - Faculty

CCC FY 15

5/10

Faculty

Institution H

Institution L

77%

4/10

5/10

90%

77%

HERI 2014 US News and World Report

Institution H 96%Institution L 65%

88%

88%

80%

79%

81%

IPEDS 2013

3.2%

HERI 2013

Institution H 13.5%Institution L 3.2%

6.6%

3.2%

100%

99%

6.6% 100%

25 ksmcpa.com

▪ Students▫ Enrollment Headcount▫ ACT Scores▫ Minority▫ Average Debt▫ Academic FTE

Executive Dashboard – The Rest

26 ksmcpa.com

▪ Financial▫ University Discount Rate▫ Revenue FTE▫ Composite Financial Index▫ Endowment (In total dollars)▫ Annual Fund

Executive Dashboard – The Rest

27 ksmcpa.com

▪ Measures of Success and Satisfaction▫ Spirituality▫ Church Attendance Weekly▫ Retention▫ Athletic Ranking▫ Graduation Rate▫ Alumni Giving▫ Prepared for employment▫ Prepared for Grad School▫ Global Engagement

Executive Dashboard – The Rest

28 ksmcpa.com

▪ Quick Reality Check Questions:▫ Is your board and top management satisfied with the

information it currently receives?▫ Does the board and top managers feel they need more

meaningful measures of performance or mission effectiveness?

▫ Does the board and top management know what these measures should be?

▫ What kind of data is currently being compiled and could be used to address the needs?

▫ How difficult would it be to provide the data to fuel the desired dashboard measures?

Are You Ready?

29 ksmcpa.com

Resources• The Nonprofit Dashboard, A tool for tracking progress by

Lawrence M. Butler (Boardsource)

• Using Performance Measurement to Improve Public and Nonprofit Programs by Kathryn E. Newcomer (Jossey-Bass)

• Financial Planning and Evaluation for the Nonprofit Organization by Anthony Gambino and Thomas Reardon (National Association of Accountants)

• Benchmarking in Higher Education, Adapting Best Practices to improve Quality by Jeffrey Alstete (Association for the Study of Higher Education Report no. 5)

30 ksmcpa.com

Questions?