INTRODUCTION
The establishment of the OUSL was considered to be a dawn of new era in higher education of Sri Lanka. The more than a decade long history has helped us in realizing only few complications and implications of the OU system and its environment. The understanding of the system in its true perspective has become a prerequisite for its survival than for its existence. In this respect, issues related to the costs are high on the agenda.
Over the past 12 years or so, the OUSL has grown in many folds in the areas of student enrollments, programmes offered, facilities provided and infrastructure. Such developments have greatly contributed to an increased administrative burden, which is shared by non-academics as well as academics. Nevertheless, in general the cost consciousness towards all these academic, administrative and operational activities has been at its minimum level. The absence of a formal costing structure has been the major reason for this situation. Apparently the present practice is incapable of providing required administrative and management information for efficient, effective and economical operation of the institute.
PRESENT PRACTICE
A costing mechanism is hardly available at present, at OUSL. The existing accounting system, which is simply characterized a typical conventional system, has failed in providing meaningful information for most of cost related issues inherent to our system. In many of the occasions, the practice of marginal costing has been adopted for the purpose of deciding fees, which is totally unacceptable in the light of the massive administrative burden. The key basis for rough costing of courses has been the student-credit. This is extremely unfair due to highly varying resource consumption among the faculties, divisions and courses. A more refined approach is essential even at a cost of little additional effort.
PROPOSED COSTING STRUCTURE
The objective of the proposed structure has been to identify the fixed cost and the variable cost associated with a course. There could be contributions to the fixed cost coming from various overheads at various levels. Here the overheads occur at University, Faculty, Divisional, Programme, Coordinator and Course levels are identified.
The variable co-efficient is reflective of the direct resource contributions towards a student following the course In the areas of academic counselling, multimedia material, evaluations and examinations, direct facilities and direct overheads.
Different expenditure components occurred at each cost centre is allocated and/or progressively apportionated in compiling the aforementioned two cost types for each course.
Expenditure types
A comprehensive analysis of expenditure types, in the light of informational requirements and present practice of maintaining accounts has revealed the following general set expenditure types for cost centres.
- Salaries and wages, Provident Fund and Gratuity contribution/approved allowances.
- Permanent Cardre
- Academic
- Academic support
- Non - academic
- Temp. Cardre
- Academic
- Academic support
- Non - academic
- Contract
- Casual
- Over - time
- Holiday pay
- Visiting academic's fees
- Consultancles
- Office stationary, printing materials
- Equipments
- Minor repairs and maintenance to vehicles and equipments
- Traveling
- Transport
- Electricity
- Water
- Security
- Communications
- Postage
- Student union and welfare
- Human resource development
- DP services
- Maintenance
- Evaluation
- Continuing assessment based
- Final examination
- Staff - welfare
Cost centres
A refined spectrum of cost centres are identified for the purpose obtaining a more realistic picture of the state of affairs.
- VC's Office
- DP Div.
- Operations
- Director RES Office
- Regional Centres
- Office
- Hostels
- Stores
- Computer Lab
- Library
- Gest House
- Study Centres
- Office
- Computer Lab
- Gest House
- Main Stores
- Main Library
- Press
- Works and Maintenance
- Audit Div.
- Examination Div.
- Student Affairs Div.
- Establishment Div.
- Registrar's Office
- Accounts Div.
- Continuous Assessment Div.
- Deans Office
- Divisions :
- Head
- Co-ordinators
- Non-academics
- Laboratories
- Workshops
- Educational Technology Div.
- General Administration Div.
- Deputy Registrar's Div.
The above two dimensions, (eg cost centres and expenditures) would form the basic grid framework for us to proceed with allocation and apportionment process. The very same structure is illustrative of the importance of the establishment of cost codes to facilitate the exercise.
Apportionment, allocation and absorption
Establishing a realistic basis for apportionment could be the key to the success of the whole exercise. The basis for apportionment should be established by realistically asses assesing the nature of the work carried out at each cost centre different levels.
From the cost grid, cell value will be apportionated either to another cell(s) or/and to general cost centres or these would be absorbed to the general cost centres as Indicated in the figure. The first phase of the exercise will come to an end, once all the costs are transferred to general overheads as indicated (eg:University, faculty, Division, programe and course other than the direct costs). The Indirect administrative and facilities burden on a student enrolling for a programmed offered by a division of a faculty facilities calculated by adding the respective contributions on per student basis. Direct administrative and cost of a course is also calculated as a result of this exercise.
Few examples would make life easy. The total costs at Vice Chancellor's and Registrar's office would be directly absorbed to the general overhead of University. The nature of the work at student affairs division also justifies the sharing of its total cost equally by all the registered students. All the expenditure directly associated with the heads of administrative divisions and their peons and helpers should also be absorbed by the University overhead. But the expenditure of other staff should be appropriately apportionmented for an example the clerical staff at the Establishment division working on academic staff should be shared equally by all the academic staff which in turn will be reflected on the courses that they coordinate. The same argument could be extended to the clerical staff at the accounts division handling student fees and staff salaries.
Within an academic division, Head's contribution for administrative work and expenditure on peons, Labourers etc should be apportionated to respective courses based on the student enrollments of the respective courses. All the Deans office expenditure must be absorbed to the general faculty overhead.
Direct contributions for examinations and continuous assessments would come form DP division, Examination division and from respective co-ordinators and visiting academics. Academic counselling should be based on the coordinaters effort in the form of time. For multimedia material, direct contribution is quite visible and is coming from the press and educational technology division.
The water bill must be first divided the students and OUSL employees. The students component must be absorbed at faculty level based on the in-campus activities and student number. OUSL employee component should be absorbed at divisional level based on the number of employees at each division. The high expenditure on electricity has stress the requirement for a logical base for apportionment. Individual metering would be the best option.
Those few examples are adequate enough for us to understand the monitoring required and the requirement for a sound information base for effective implementation of the proposed costing structure.
Development cost and replacement cost
Course development could be done either in-house or/and on the basis of assignment by outside staff. Due to prevalent extreme inconsistencies of the practice it is suggested that irrespective of the way it is developed, in total it is assumed as an outside assignment. The full cost of obtaining final form of material other than equipment (eg. laboratory equipment) is obtained. This cost must be absorbed into a cost of the course in such a way to recover that cost maximumly of over 3 years time. For this, rough number of annual student enrollment must be known in advance.
Each division must consciously decide on an annual replacement cost based on the equipment that they handle. The extent of use, the declared life time, technological obscelance etc could be few important aspects to look at. The equipments such as computers and its accessories, office equipment such as photocopiers, Laboratory equipments etc would come under this category. Monies earned could be kept in a fund for future use where as that cost should be transferred appropriately, to be reflected in the final course fee.
COMPUTER MODEL
The grid nature of the structure and its relationships among elements make this an ideal application to be implemented on a spread sheet environment. Cost codes would correspond to cell addresses. Apportionment policies could be conveniently express in terms of formular entered at respective cells. Any change in policy could be conveniently accomated by changing the corresponding co-efficient. Apportioned, allocated and absorbed components are finally superimposed together to obtain a composite picture. Key variables such as student numbers, number of staff members at different ranks, evaluation components, number of courses in a programme etc are kept in isolated cells in order to facilitate sensitivity analysis using what - if feature in evaluating policy options. User friendly nature of he model will encourage the effective use at all levels.
The model would readily respond in studying the impact of crucial issues such as increased drop out rate, scrapping/introducing a programme, increasing staff at different levels,change in evaluation methods, use of alternate media with simple manipulation of respective cell entries and co-efficients of formular. This model demonstrates a high degree of maintainability and flexibility.
CONCLUSION
A realistic picture of resource consumption at course level is becoming extremely important under increasing restricted resource availability. Solid base for costing and providing cost information, at OUSL, has been a long felt need. Early implementation of the proposed structure would help the OUSL to identify the true cause of many of its issues, and to improve the overall efficiency of the system, while maintaining good quality and high standard of the programmes offered.
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