Content Of Financial Management In Viewpoint Of Autonomy And Accountability In Public Universities

CONTENT OF FINANCIAL MANAGEMENT IN VIEWPOINT OF AUTONOMY AND ACCOUNTABILITY IN PUBLIC UNIVERSITIES Nguyen Thi Hue (VNU University of Education) Abstract One of the important issues of the fundamental and comprehensive reform of higher education is to innovate the management of financial activities in universities Public universities increasingly have a high degree of autonomy in the use of state budget sources and in the exploitation and use of revenues The fact that the State is gradually reduc[.]

AND ACCOUNTABILITY IN PUBLIC UNIVERSITIES

Nguyen Thi Hue

(VNU University of Education)

Abstract: One of the important issues of the fundamental and comprehensive reform of higher education

is to innovate the management of financial activities in universities Public universities increasingly have a high degree of autonomy in the use of state budget sources and in the exploitation and use of revenues The fact that the State is gradually reducing the recurrent budget for higher education in order to improve the competitiveness

of universities, forcing universities to promote the potential of their units to expand their scale and diversify their activities to meet social needs The article mentions some contents in the management of financial activities at public universities from the point of view of independence and accountability, from there as a theoretical basis to help universities have solutions to exploit and manage more effectively the financial resources of the university in the context that the state is assigning high autonomy to the development of educational activities.

Keywords: finance, financial operations management, autonomy, financial autonomy, accountability.

1 INTRODUCTION

In public universities, the state budget is the main source of finance, allocated by the state to carry out the professional tasks of the institution However, at present, the use of this financial resource is not really effective and still causes waste The autonomy not only helps the Government reduce the burden

on the state budget but also opens up opportunities for universities to promote their initiative, creativity and innovation in education, training and scientific research at the same time, encourage universities to improve the quality of their staff and teaching, and push them to be more dynamic to be able to meet the requirements of change

Financial management in the direction of increasing autonomy will create favorable opportunities for organizations in mobilizing and using financial resources effectively to improve the quality of training services, in order to produce high-quality human resources On the other hand, it forces schools

to increase their accountability to society and learners

2 OVERVIEW OF FINANCIAL MANAGEMENT IN PUBLIC UNIVERSITIES FROM THE POINT OF VIEW OF AUTONOMY AND ACCOUNTABILITY

Most authors have studied and shown that finance is an integrated reflection of economic relationships in the distribution of financial resources through the creation or use of monetary funds to meet the requirements of accumulation or consumption of subjects in society [18]

In terms of form, it reflects the movement and transformation of financial resources in the process

of using monetary funds In essence, they are financial relationships that manifest in the form of value arising in the process of forming and using cash funds to serve the operations of the entity

Financial activity is the activity of distributing total social products in the form of value among economic actors In order for financial activities to be effective, economic relationships between entities must be well resolved

Financial management is the management of activities: mobilizing, allocating and using financial resources by an integrated method of many different measures based on the application of objective economic laws-finance in a way that is suitable to the conditions of the country’s socio-economic renewal process Financial management is the process of distributing financial resources to meet the needs of economic entities [17]

According to author Era Solomon, “Financial management is the use of information that accurately reflects an organization’s financial position, to analyze its strengths and weaknesses and make plans to use financial resources, fixed assets and future labor needs to achieve specific goals that add value to the organization [3]

In the current trend for universities, many authors have studied financial management towards autonomy and accountability The financial management requires aiming to improve the quality of training, the quality of the staff, towards achieving the goals and missions of the universities

In their research, Don Anderson and Richard Jonson (1998) emphasized the relationship between national government and higher education institutions, especially the degree of government influence over activities of the university According to the authors, in countries with a high tradition of university autonomy, the government intervenes in universities according to the model of state supervision In contrast, countries with less tradition of high university autonomy tend to adopt a state-controlled model [2] The author Phung Xuan Nha and colleagues (2012) have studied the tuition fee policy in the context of renovating the financial mechanism, towards an advanced and autonomous higher education According to the authors, it is necessary to develop and approve a school-based financial autonomy project to implement the reform of tuition fees and the mechanism of state budget allocation At the same time, the state needs to give higher financial autonomy to schools [21]

3 RESEARCH OBJECTIVES

Researching the theoretical basis of financial management in public universities from the point of view of autonomy and accountability, in order to help universities have solutions to exploit and manage financial resources more effectively, in the context that the state assigns a high degree of autonomy towards the development of educational activities

4 RESEARCH METHODOLOGY

Research documents, texts, scientific topics were used to build a theoretical basis for the research problem Analyze, synthesize, and systematize documents were used to determine the content of the research problem, make hypotheses and build a theoretical framework for the research

5 THEORETICAL ISSUES OF FINANCIAL MANAGEMENT IN PUBLIC UNIVERSITIES

5.1 Objective and principle of financial management from the point of view of autonomy in public universities

* Target:

Financial management aims to ensure the mobilization and use of financial resources in accordance

with regulations, for the right purposes and with high efficiency to serve the development and improvement of the training quality of the institution

* Rules:

Achieving the objectives in financial management requires the institution to adhere to the following basic principles:

Principle 1: Balance enough resources

Financial management requires the provision of a sufficient resource with the minimum amount required for all learners This helps the manager to estimate the required amount of input for each discipline Inputs can include learning materials, learning equipment, qualifications of teachers, family circumstances of learners, learning ability and learning outcomes of learners

Principle 2: Fairness

Financial management must ensure that sufficient basic resources are provided so that all learners have the same opportunity to receive a basic, high-quality education Students with different learning needs will receive commensurately different degrees and resources Financial management must contribute to the realization of equity in education, ensuring that everyone has the opportunity

to learn This is a requirement for countries when the distribution of wealth in society is increasingly concentrated on a small part of the population, making the opportunity to enjoy education unequal among the people living in one country Thanks to its distributional function, the state can increase investment or promulgate mechanisms and policies to create favorable conditions for the poor to access education Thereby reducing inequality in education, making an important contribution to creating equity in society

Principle 3: Open, transparent and effective

Financial management in education should promote the effective use of resources in an open, transparent and responsible manner In addition to providing and overseeing finances, financial management

in an organization must ensure that resources are converted into learning opportunities for all

The financial policies related to the transfer of resources, significantly affect the quality of education of each institution Financial management must ensure to improve the quality of training, the quality of human resources and promote scientific research activities, which create the brand and reputation of the university

5.2 Contents of financial management in public universities from the point of view of autonomy and accountability

* Revenue management in public universities:

Revenue sources in public universities include: state budget sources, non-business revenues and other sources of revenue

- Sources of state budget, including:

+ Funds to ensure regular operation to perform functions and tasks for non-business units cover part of operating expenses themselves;

+ Funds for implementation of scientific and technological tasks;

+ Funds for the implementation of the training program for cadres and civil servants; national target programs

+ Funds for performing tasks ordered by competent state agencies;

+ Funds for performing unexpected tasks assigned by competent authorities;

+ Capital construction investment capital, expenditures for procurement of equipment, repair of fixed assets in service of non-business activities according to projects approved by competent authorities; + Reciprocal capital for the implementation of projects with foreign capital sources approved by competent authorities;

+ Other expenses (if any)

- Income from non-business activities, including:

+ The portion left over from the state budget tuition and fee revenues as prescribed by law;

+ Revenue from service activities;

+ Dividends from joint ventures, associates, interest on bank deposits

+ Income from other non-business activities (if any);

- Other sources of income:

+ Revenues from sponsorship projects, aid, gifts

+ Borrowed capital from credit institutions, mobilized capital from officials and employees + Capital sources for joint ventures and associations of domestic and foreign organizations and individuals according to the provisions of law

- Requirements in the management of revenue sources of public universities:

+ Revenue sources must be fully managed in terms of form, scale and determinants of revenue Without comprehensive management, it will lead to the loss of resources, affecting the financial management efficiency and operations of the Public University:

+ Revenue sources must ensure social justice This is an element that represents common equity for all activities of the State

+ Revenue sources must ensure the strict and correct implementation of policies and revenue regimes promulgated by competent agencies Public Universities: Not allowed to arbitrarily set revenues

as well as rates

+ Revenue sources must be planned, collected correctly, fully and properly organized in the collection process

+ The revenue sources must ensure consistency in each unit and the whole system, which is an appropriate requirement for units with multiple sources of income

- Revenue management process:

+ Make a revenue estimate:

With regard to revenue sources, organizations shall base themselves on their plans for training, scientific research and non-profit activities as a basis for making revenue estimates

Specifically, for the state budget: make an estimate based on the enrollment quotas allocated by the state budget every year and the state budget norms for their group of universities as a basis for determining revenue and expenditure sources In addition, based on scientific research activities assigned

by the State, other target programs and tasks are ordered by the State

For non-business and other revenue sources, based on the state’s revenue norms and contracts for training, research and development and other revenue-generating activities, to make a revenue plan

+ Organizations that comply with revenue estimates:

For the state budget: based on the university’s estimate approved by the competent authority for the financial year Universities shall make detailed plans on a monthly and quarterly basis to serve as

a basis for the allocation and receipt of funds through the State Treasury that the organization opens a funding limit account

For non-business revenues and other revenues: based on training plans, scientific research activities, association activities and other revenue-generating activities, to organize the management of revenues according to the regime

+ Finalization of revenue:

Management of public universities’ revenue sources requires proper identification of revenue sources according to state regulations and plans to exploit state budget and other non-business and other revenue sources to meet financial needs

* Expenditure management in public universities

The use of financial resources by the Public Universities includes regular operating expenses, non-recurring expenses and other expenses

- Regular operating expenses:

Recurring operating expenses include state budget allocated for regular operations, performing tasks ordered by the State and non-business revenues of organizations, including:

+ Spending on people

+ Professional expenses

+ Expenses for procurement and repair

+ Other recurrent expenses

- Irregular expenses:

+ Expenses for performing scientific and technological tasks

+ Expenses for implementation of training programs for cadres and civil servants; national target programs

+ Expenses for performing tasks ordered by the State

+ Reciprocal capital expenditures for the implementation of projects with foreign capital sources according to regulations

+ Expenses for performing unexpected tasks assigned by competent authorities.

+ Expenses for capital construction investment, equipment procurement, major repair of fixed assets for implementation of projects approved by competent authorities

+ Expenses for joint venture and association activities

+ Other expenses as prescribed (if any)

- Other expenses

Expenditures from grants and aid projects of international cooperation activities in the fields of training and scientific research, expenditures from student scholarships, gifts, etc

Requires expense management:

+ Ensure sufficient financial resources for universities to complete assigned tasks To fulfill this requirement, it is required that each university needs to develop a cost estimate, establish a priority order for expenditures to allocate funds accordingly

+ Ensuring savings and efficiency: This is the leading principle of financial management Resources are always limited, but demand is often unlimited Therefore, it is required that in the process of allocating and planning expenditures, it is necessary to calculate so that the financial costs are the lowest but bring the highest educational efficiency

+ Ensure expenditures are in accordance with the norms, regimes and policies of the State and the organization’s internal spending regulations

Organizations need to develop accurate and scientific expenditure norms This is both a basis for building a spending plan and a basis for controlling expenses The expenditure norms must ensure compliance with regulations and ensure compliance with the specificity of each organization The construction norms must be highly practical, suitable to the funding needs of the activities Only when the norms meet such requirements will the norms become the standard for budget management

Expense management process:

+ Set up a cost estimate:

For the expenses of the organization, based on the arising nature of the expenditures in the organization to build a cost estimate

Expenditures of the nature of regular consumption are promulgated by the State into a system of general expenditure norm standards arranged according to the specified items of the state budget index system Personal payment expenditure is one of four groups of recurrent expenditure In the university, individual payments include wages, salary allowances, student and student scholarships, and collective welfare

Expenditure on development investment includes: investment in purchase of fixed assets and investment in capital construction This is the expenditure task of the state budget

It is necessary to select the priority order for activities to ensure that the total expenditure is limited but the workload is still completed with the highest efficiency To achieve this, the organization needs to have different ways of distributing and using funds On that basis, select the optimal plan for the process

of estimating, allocating and using funds Develop a strict and reasonable expenditure allocation process

in order to minimize the negatives arising in the allocation process, creating favorable conditions for the control of expenditure by competent authorities

+ Organizing the implementation of cost estimates

Organizing the implementation of cost estimates in the organization is to ensure adequate and timely financial resources of the organization for the university’s activities, implementation of the tasks and plans set out The essence of the implementation of cost estimates in universities is to organize the use of funding sources in the most effective and economical way and to ensure compliance with state regulations

To achieve that purpose, universities need to make payments to subjects in accordance with the standards and norms prescribed by the State Regularly review and adjust outdated norms that are no longer suitable with reality, and issue new norms to ensure scientific and appropriateness to the actual situation Ensure the payment for departments and individuals in the university in accordance with the approved plan and estimate

+ Finalization of cost

* Check, control, implement openly and transparently

- Check and control financial revenue and expenditure:

Financial inspection and supervision is the inspection and supervision of the mobilization and use

of financial resources for education One can inspect and monitor educational institutions on a regular basis, continuously on a large scale Through inspection and supervision, managers can quickly grasp the operation status of educational institutions Financial supervision helps educational institutions to propose situational solutions as well as strategies to use resources invested in educational development

in a reasonable and effective way

The inspection and control in the university can be done through the internal audit of the organization, the state audit and the inspection and approval of the final settlement of the governing body In essence, this is a measure to maintain and improve management quality through the use and application of regulations and norms, which are specified in financial management documents From there, financial discipline will be maintained and the quality of financial management will be improved

- Implement openly and transparently:

The publicity and transparency in financial statements will increase the self-responsibility of the university, especially the head (Principal) Autonomy and accountability are seen as two parallels in universities The more autonomy the university has, the greater the responsibility of the principal The more transparent financial management is, the more it will help the university affirm its position and brand

* Decentralization of financial management in public universities

Budget management decentralization is considered a core content in state management decentralization and it is a matter of great concern in reforming public sector operations in most countries around the world State budget laws of all countries have regulations on how to divide budgetary tasks and powers among different levels of government in the state apparatus

Financial management decentralization is essentially to promote the optimal efficiency of resource mobilization With the concept that decentralization will create revenue for the education system by taking advantage of local tax revenue and reducing operating costs The goal of this model is to shift the financial burden on education from central government to local governments, community organizations and parents According to this model, the active participation of many organizations and social groups will lead to an increase in resources devoted to education

Thus, it can be seen that the overall goal of decentralization and decentralization in educational financial management is to make the education system work more effectively, in order to meet the innovation requirements of society In universities, the decentralization in Financial Management can

be done in the direction of assigning contracts to organizations to increase the initiative in using funding sources to bring about high efficiency

6 RESEARCH RESULTS AND DISCUSSION

*/Revenue management

Universities are charged tuition fees according to state regulations Currently, the Ministry of Education and Training, together with the Ministry of Finance, periodically issue guidelines on the amount of tuition fees allowed to be collected at public universities Under this regulation, universities have the right to determine their own tuition rates but must report their total annual revenue to the governing body responsible for overseeing the university’s operations Fees may also be charged for special services such as enrollment, testing, boarding and graduation In addition, universities can also enter into contracts for training, scientific research activities, and other services Revenue arising from this clause is tracked and collected during the contract performance and according to the schedule

of revenue estimates for the financial year For revenues related to external funding of individuals, organizations are usually collected during the year on the basis of signed sponsorship commitments Grant revenue is often the source of revenue for investment in university facilities and student support (through scholarship funding) This revenue can exist as cash value

- The process of complying with the university’s revenue estimates also means improving the propaganda of policies and collection regimes to help learners clearly see their responsibilities in fulfilling their financial obligations to the university

In order for the implementation of revenue estimates to ensure high efficiency, the university must perfect the organization of the financial and training apparatus Renovate and perfect the collection management in accordance with the estimates and the State’s regulations, urge the collection and payment and make statistical accounting of the revenues Strengthening professional training for staff

in charge of collection and management of the organization’s revenue; at the same time handle the relationship between functional departments related to the organization’s collection activities

State budget revenues are allocated to universities through the State Treasury system and paid

to universities according to the annual budget estimates prepared and approved by the universities The management of state budget resources is complied with the provisions of the Budget Law and

is monitored, checked and compared by the accounting system in the university and the authorities according to the assignment and decentralization of the housing management agencies superior country Tuition revenue sources comply with the state’s regulations on tuition fees in public universities [14],[15]; For public higher education institutions that self-finance all recurrent expenditures, they can determine their tuition fees by themselves The determination of the tuition fee must be based on the economic and technical norms according to the correct calculation route, fully calculating the training costs [19] Revenues from the provision of training, scientific research, consulting, and technology transfer services shall be decided by the head of the organization on the basis of correct and sufficient calculation of training costs; Revenues from loans, aid, grants and other revenues as prescribed by law [16]

*/Expenditure management

The development of internal spending regulations in the direction of autonomy aims to help the university manage and use financial resources more effectively Through the Internal Expenditure Regulations, it will implement centralized management, unify revenue sources, maintain and encourage the expansion of revenue sources, ensure uniform spending throughout the university, implement thrifty spending, effective Regulations on internal spending must be developed to increase the autonomy of the head of the organization in financial management and spending; Create the right to take initiative for university officials and employees to complete their tasks; It is the basis for controlling, inspecting, monitoring and managing the use of financial resources efficiently, economically and creating fairness and transparency

The State stipulates a number of expenditures in establishments as follows [16]:

- For organizations that self-finance recurrent and investment expenditures; self-financed recurrent expenditure: The salary payment must comply with the regulations of the State and the organization must ensure its own funding Organizations are entitled to decide the level of expenditure for professional activities and management activities according to the financial regulations of the organization

- For organizations that cover part of their recurrent expenditures themselves and those whose recurrent expenditures are guaranteed by the State: The salary payment shall comply with the State’s regulations and

be funded by the State budget Organizations may decide the level of expenditure for professional and management activities, but the maximum cannot exceed the ceiling prescribed by the State

- For non-recurring expenditures, expenditures shall be made in accordance with the provisions

of the State Budget Law and current laws on expenditure levels, standards, norms, regime of per diem, conferences and seminars

Management of university expenditures is to manage the allocation and use of financial resources

in the most reasonable, effective and economical way to ensure the stability of long-term and short-term financial resources Financial performance goals of the university must be based on revenue sources

to make spending plans so as to ensure sufficient revenue to cover expenses and accumulate In order

to perform well the spending tasks, it is necessary to clearly define the expenditure items in the public universities For recurrent expenditures, public universities are entitled to use state budget sources and non-business revenues of the organization to spend Expenditure content must be for the right purposes,

in accordance with regulations, economically but must be effective and improve the training quality of the university

*/Implement openly and transparently

The organization of the university management apparatus in an open direction with the participation

of the University Council and related subjects This is the fundamental difference in the financial management apparatus in the direction of autonomy and accountability with the financial management apparatus under the centralized management mechanism The participation of the University Council and related subjects in university financial management not only strengthens and strengthens the university management apparatus, but it also helps ensure financial information become more transparent, more responsive and have a direct connection between the university and state management agencies as well

as related organizations and parties The construction of the financial management apparatus in an open direction aims to use financial resources effectively to best serve the set educational goals and towards the principle of “effective supervision”

*/Decentralization of financial management

Currently, the decentralization in the direction of increasing autonomy for universities has created a high-level democratic environment, helping universities to be more active in participating in the financial decision-making process to improve quality education The decentralization in financial management will promote the dynamic and creative process of each university, increase the initiative and positivity

in financial management of the university, and help save and efficient use of resources

Decentralizing financial and budgetary management not only creates financial resources but also motivates universities to maximize their potential

Renovating the decentralization of financial and budgetary management in the direction of increasing the initiative rights of ministries, branches, localities, organizations and individuals, coupled with the rectification of discipline, discipline, thrift practice, and anti-waste fee Expand the powers and responsibilities of ministries, localities and budget-using organizations through regulations on organization of making and synthesizing budget estimates, allocating estimates and adjusting estimates when necessary; budget expenditures according to the assigned estimates, in accordance with the progress of task performance and in accordance with policies, regimes, norms and standards; approve the settlement of affiliated organizations Clearly define the responsibilities of finance agencies at all levels in presiding over the synthesis of budget estimates and organizing the implementation of the budget The head of the organization, the head of the finance-accounting organization must take full responsibility before law for the management and use of the assigned budget and assets

CONCLUSION

Managing financial activities in public universities from the point of view of autonomy, self-responsibility on the one hand requires managers to comply with and strictly abide by the regulations and principles in financial management, on the other hand Others must thoroughly implement decentralization and decentralization in management to help organizations bring into full play their intrinsic strength in order to find and expand resources and allocate resources in the most effective way to achieve their goals educational goals of the university The greater the autonomy within each university, the greater the university’s accountability

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