The impact of the Italian University reform on management systems of each individual University

Since the end of the eighties, the Italian University system has been undergoing an unprecedented change. In order to bring our system up to European standards, legislators have introduced a large number of innovative factors which have caused a reconsideration of “consolidated University management procedures” both at local and systems levels. The legislative changes headed towards: a) a stronger local autonomy; b) the diffusion of the evaluation culture; c) the introduction of the planning and control logic that can be applied to the planning of public intervention as well as to the management of each individual university. However, laws and regulations alone are proving to be inadequate for complying with the reform, resulting in a need to deal with problems which are more specifically management-related in order to improve competitiveness in our system. This means that organisational principles must be created with a view to introducing effective management mechanisms aimed at greater autonomy, at the evaluation culture and the planning and control logic from a business perspective that disassociates itself from the typical bureaucratic model of public administration. During recent years, some scholars of Business Economics and Management have paid particular attention to the Universities and, more generally, to the public administration system. New studies researching cost accounting and budgeting systems structures supporting university management have been made as well as studies focusing on accounting system analysis and possible budget structures that each university can adopt in accordance with the uniformity requirements imposed on the University system. These studies have frequently reached a severe diagnosis of the gaps to be filled, particularly showing how our universities are still lacking in the area of cost accounting and managerial control systems. The universities that have introduced managerial control systems are rare and recent occurrences. The situation abroad is different, however, and in the context of a culture of the economic responsibility decentralisation, a large number of universities have tested and are now using budgeting and cost accounting systems in order to achieve economic control in the whole institution as well as each individual economic responsibility centre (departments, research centres, training centres, centralised service units etc.), and the procedures related to didactics, research and the functioning of centralised structures. The goal of this report is to go beyond a simple analysis of the available research and of examples in Italian and foreign universities in order to suggest some principles for the planning and the effectiveness of performance measurement systems related to economic university management. This goal is pursued through the development of five steps: 1) Looking over the latest evolution of the laws related to the Italian university system, paying particular attention to those rules that, due to their implication for autonomy, evaluation and planning of the activities, have considerable impact on the information needs of the Institutions that can be partly satisfied by the economic measurement system we intend to deal with. 2) Facing the problem of the division of university global outcomes into partial outcomes (departments, faculties, degree courses etc.), with the aim of appreciatingthe economic conditions of individual partial productive combinations and economic responsibility centres (cost, profit and investment centres). These are an indispensable condition for the dissemination of the accountability culture at several management levels, in the context of overcoming the cost centres authorisation and financial logic. 3) Suggesting integration between the traditional systems of Responsibility Accounting and Budgeting using activities-based evaluation systems i.e. -Activity Based Costing and Activity Based Management- as well as procedure related systems i.e. - Activity Based Budgeting. It may be useful to introduce cost strategic management tools aimed at cost reducing and qualitative improvement of the services. 4) Completing the view of the steps outlined above through the definition of some reporting structures able to support systematic monitoring procedures of the Institutions’ global and partial outcomes (departments, faculties, research and training centres, degree courses etc), with the aim of outlining the view of an ideal management control system which every Institution should rely on in order to provide the governing bodies with the knowledge they require about economic choices, according to the autonomy they have been granted. 5) Comparing, finally, control and management systems of some Italian universities, paying attention, both to financial and cost accounting systems and managerial control systems. The proposals contained in this report are based on the belief that the introduction of an economic management approach and method in universities can not be delayed any 3 longer, not only to evaluate the efficiency of central and devolved choices with which public investments are concerned, but also, primarily, to drive each individual university towards a competitive spirit aimed at improving the whole system’s performance.