Standard 9: Financial Resources

1. The institution is financially stable. Ostensible financial stability is not achieved at the expense of educational quality. The institution's financial resources are sufficient to sustain the achievement of its educational objectives and to further institutional improvement now and in the foreseeable future. The institution reallocates resources as necessary to achieve its purposes and objectives. All or substantially all of the institution's revenue is devoted to the support of its educational purposes and programs. The institution has the ability to respond to financial emergencies and unforeseen circumstances.
2. The institution controls its financial resources and allocates them in a way which reflects its mission and purposes. Its stability and viability are not unduly dependent upon vulnerable financial resources or an historically narrow base of support. If an institution depends for its financial support on an external agency (state, church, or other private or public agency), the institution's governing board retains appropriate autonomy in all budget and financial planning matters. The institution demonstrates through verifiable internal and external factors its financial capacity to graduate its entering class.
3. The institution establishes and implements its budget after appropriate consultation with relevant constituencies in accord with realistic overall planning that provides for the appropriate integration of academic, student service, fiscal, development, and physical resource priorities to advance its educational objectives. All fiscal policies, including those related to investments, insurance, risk management, contracts and grants, transfers and inter-fund borrowing, fund-raising, and other institutional advancement and development activities, are clearly stated in writing and consistently implemented in compliance with ethical and sound financial practices.
4. The institution ensures the integrity of its finances through prudent financial management and organization, a well-organized budget process, appropriate control mechanisms, and timely financial reporting, providing a basis for sound financial decision-making. The institution has and implements a realistic plan for addressing issues raised by the existence of any operating deficit.
5. The institution directs its fund-raising efforts toward the fulfillment of institutional purposes and conducts them in accordance with clear and complete policies that stipulate the conditions and terms under which gifts are solicited and accepted. The institution accurately represents itself and its capacities and needs to prospective donors and accurately portrays the impact that their gifts can reasonably be expected to have. Gifts are promptly directed toward donors' intentions.
6. The institution's financial records clearly relate to its educational activities. The financial resources and transactions of independent institutions are audited annually by an external auditor in accord with the generally accepted auditing standards for colleges and universities as adopted by the American Institute of Certified Public Accountants. When public institutions are, by law, audited by a state agency, an independent audit is not required except for any funds not subject to governmental audit. In either case, the audit is appropriately reviewed by the institution's administration and the resulting recommendations or conclusions are addressed by the institution's financial planning. The institution also has in place appropriate internal mechanisms to evaluate its financial management.