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Finance Sample

Running head: IMPACT OF A BUDGET ON COMPETING PRIORITIES 1
Impact of a Budget on Competing Priorities
Name
Institution
IMPACT OF A BUDGET ON COMPETING PRIORITIES 2
Impact of a Budget on Competing Priorities
Funding for higher level education institutions varies based on predetermined factors. In
Europe, for example, the government foots a huge bill of the cost of education in this sector.
However, in the U.S.A things are a bit more complicated. A combination of privately sought
funds and competitively acquired funds make up these institutions’ budgets. The Mercy College
budget is obtained is such a manner and consequently, I will look into how the needs of this
institutions are prioritized and the resulting budget allocation.
Mercy College Dobbs Ferry
Founded in 1950, the college offers undergraduate programs with a capacity of 8,016
students (Mercy College, 2015). The institution is covered by a 66 acre piece of land and it uses
a semester based calendar. It has a total of 5 schools, Business, Health and Natural Sciences,
Social and Behavioral Sciences, Education and Liberal Arts. Its tuition fee and other fees are a
total of $18,392 for this academic year (Mercy College, 2015). Additionally, the school is
renowned for its mentoring program, The Personalized Achievement Contract, which offers
mentorship of students with industry leaders and academic excellence. It is also worth noting that
the student population is largely made up of female students, 69%, and men, 31%. The college
offers a form of financial aids based on needs to 83% of its students. The grant award is $9,498.
Additionally, the costs of room and boarding are $13,700 in total. In the 2015 annual report, the
school had an operational revenues of up to $149.5 million and operating expenses of $123.3
million (Mercy College, 2015). Additionally, the school had $253.1 million in net assets $193.5
million in investments. Their budget is made to reflect on this sums.
IMPACT OF A BUDGET ON COMPETING PRIORITIES 3
Funding Priorities of the Institution
One big funding priority is in financial aids and grants. The school has invested heavily here.
The average financial aid package is $14,650. This sum reflects the 56% percent of financial
need of students (Mercy College, 2015). This meets their goal of lifting off the burden of the
expensive and unaffordable education in America. It is worth noting that in 2015, the average
indebtedness of students was a whopping $26,000. Additionally, 81% of students had loan debts
(Mercy College, 2015). Also, the Mercy Scholars initiative has opened up funding aimed at
supporting high-performing students with weak financial backing. The fund will go into their
tuition, book vouchers and social programs.
Secondly, the institution has put in a lot of funding into the expansion of its facilities. In
2014, student and housing facilities began construction. The project included, a 100,000 square-
foot, four-story building and a 5,000 square-foot fitness center (Mercy College, 2015). This
project was completed in 2016. The total cost was approximately $35 million. This represent just
one part of their plan to expand the school. The logic behind it is to increase the school’s
capacity and resources, thereby making it more competitive. Additionally, this facility is being
used to fulfill their 2020 strategic plan goals, specifically the community college goal.
Analysis of their Budget
For the 2015-2016 academic calendar year, students’ tuition fee was 33% less than in
other private non-profit colleges (Mercy College, 2015). This years’ figures are similar and
highlight the institution’s intention to ensuring education is relatively affordable. However, net
tuition and fees account for approximately 86.57% of the school’s expense budget (Mercy
College, 2015). This presents a new problem of competing priorities for funding. Consequently,
funding for the aid, development and infrastructure of the school and students has locked horns
IMPACT OF A BUDGET ON COMPETING PRIORITIES 4
with student related expenses. Case in point, in the year 2015, the institution used approximately
$94 million on program services (Mercy College, 2015). On the hand, the institution had to
depend upon a grant from the US Department of Education and other stakeholders to provide
student aid and infrastructure development. This has limited the amount of money available to
student loans and debt. Therefore, the aid usually given is not as effective in the long run. As part
of their new strategic plan 2020, their main goals are student learning, student success,
affordability and financial health and, college community (Mercy College, 2016). A large part of
the affordability and health, college community and student success goals depend on grants
given to the school, such monies are unreliable and insufficient to foot the cost as per the annual
financial reports of 2014-15 and 2015-16 (Mercy College, 2015). In addition, federal funding is
reducing and has been for a while. Consequently, there has been an increase in tuition fees since
the early 2000s and will only rise further. As a result, student aid by the federal government has
increased, though marred by politics, and this will only increase debt to all students (Mitchell &
Leachman, 2015). Therefore, while student aid may increase, funding is decreasing and
consequently, less money for infrastructure and development.
Public Opinion
The school has faced many difficulties in the past. Facing a lack of financial might and
heavy criticism by state reviewers the institution was in trouble. In 2006, the Regents of
Accreditation of Teaching Education, did an assessment of the institution and the results were
dismal (Sawchuk, 2014). This report sparked changes in the institution in 2007, where they
stopped their undergraduate programs and slowly the image of the institution was rebuilt
(Sawchuk, 2014). Fast forward and with the accreditation of the institution, they are much
stronger now.
IMPACT OF A BUDGET ON COMPETING PRIORITIES 5
Resolving Competing Priorities
While focusing on the underlying challenges of funding in the institution, it is important
to note that there are opportunities to improve upon the competing priorities the school faces.
The fact of the matter is that the money is not enough, therefore, the institution should learn to
work within its means. This can be done by a employing the simple concept of opportunity cost.
Ambitious infrastructure projects should be put on hold to deal with issues like the sky rocketing
tuition fees (Mitchell & Leachman, 2015). In addition, students from low income families should
be given more aid funding while those from high income families should help shoulder some of
the burden. This will help balance out some of the financial issues students face. In addition, the
institution can encourage research as their counterparts in MIT have done, who get millions in
form of grants and contracts. However, these funding is competitive, therefore, it will be in the
best interest of the institution to increase interest in research within its faculties (Mitchell &
Leachman, 2015). This will kill two birds with one stone, one by creating a new pool of money
for growth previously unavailable and increasing the quality and competitiveness of the
institution.
Reaching Out to Stakeholders
Stakeholder are an important part of the growth and continuity of any learning institution.
More so, in Mercy College, where it is important to remind them of the road ahead. One way of
involvement is by making them a part of the decision making process. Issues like traffic
congestion, due to the rise of student population, can be addressed by involving the community
in policy making. Additionally, by using outreach strategies on policies and opportunities will
keep parents informed and create better coordination (Saxena, 2014). Also, by creating family-
friendly policies and environment within the institution can give comfort to parents and the
IMPACT OF A BUDGET ON COMPETING PRIORITIES 6
community that the school has the best interest of the students and the community at heart
(Saxena, 2014). Finally, to organizations previously concerned by the Regents of Accreditation
of Teaching Education, we would remind them of the tremendous strides the school has taken
since and the strategic plan 2020 to keep them informed of the school’s plans and future.
IMPACT OF A BUDGET ON COMPETING PRIORITIES 7
References
Sawchuk, Stephen. (2014). N.Y. College's Experience Shows Conflicts Around Ed. School
Closures” Education Week. Retrieved from
http://www.edweek.org/ew/articles/2014/12/16/ny-colleges-experience-shows-conflicts-
around-ed.html
Mitchell, Michael, & Leachman, Michael. (2015). “Years of Cuts Threaten to put College Out
Of Reach for More Students” Centre on Budget and Policy Priorities. Retrieved from
http://www.cbpp.org/research/state-budget-and-tax/years-of-cuts-threaten-to-put-
college-out-of-reach-for-more-students
Saxena, Saomya. (2014) “How to Involve Various Education Stakeholders in Education
Improvement? EdTechReview. Retrieved from
http://edtechreview.in/trends-insights/insights/894-how-to-involve-various-educational-
stakeholders-in-education-improvement
Mercy College. (2015). “Mercy College 2015 Annual Report” Mercy College. Retrieved from
https://d1dhn91mufybwl.cloudfront.net/iframehtml5/embed_https.html?hash=fdzka1d6
Mercy College. (2016). “Mercy College 2020 Strategic Plan.” Mercy College. Retrieved from
https://www.mercy.edu/about-mercy/strategic-plan

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