Survey of College Finances Finds Good Stewardship, but Some Possible Red Flags

Colleges are playing by the rules in their financial affairs and are generally being good stewards of their resources, concludes a new report by two higher-education associations that reviewed the financial data nearly 150 institutions recently submitted to the Internal Revenue Service.

Full text article by Eric Kelderman is available via The Chronicle of Higher Education, 12/17/09.

Harvard Swaps Are So Toxic Even Summers Won’t Explain

Harvard University paid almost $1-billion last year, much of it borrowed, to end agreements it made in 2004 to lock in interest rates on the bonds the university was using to finance a major expansion. The $2.3-billion bond deal for construction in Allston, Mass., near the university’s Cambridge campus, represented a bet that interest rates would rise, but instead central banks slashed rates to zero amid the credit crunch and the value of the contracts nosedived. Harvard suspended work last week on the $1-billion science building that was the expansion’s centerpiece. “For nonprofits, this is going to be written up as a case study of what not to do,” said Mark Williams, a Boston University professor of finance.

Full text article by Michael McDonald, John Lauerman and Gillian Wee is available via Blomberg, 12/18/09.

Presidents Favor Reining In Athletics Costs but Feel Powerless to Effect Change

A majority of college presidents at the nation's largest athletics programs favor sweeping change to contain the escalating costs associated with big-time college sports, but are hard-pressed to identify an entity that can achieve it. Those are among the key findings of a new report on the financing of major-college athletics programs that was issued on Monday by the Knight Commission on Intercollegiate Athletics. The report was based on a survey of 95 college presidents in the National Collegiate Athletic Association's most competitive grouping and was conducted last spring. The report also includes comments based on interviews with nearly a quarter of the campus leaders surveyed.

Full-text post by Libby Sander is available via The Chronicle of Higher Education, 10/26/09.

Few Boards Do Sophisticated Financial Planning, Experts Say

Financial stewardship by college governing boards too often stops at balancing the budget.

Full-text article by Paul Fain is available via The Chronicle of Higher Education, 4.20.09. [Subscription required.]