THE PRINCIPLES OF COST ACCOUNTING IN HIGHER EDUCATION

A. A. VOROBYEV, G. V. SIMONOV

The economic reform is spreading to an ever larger number of branches of industry. In issue no. 299 of the newspaper Izvestia for 1967, an article by the Minister of Higher and Secondary Specialized Education of the RSFSR, “Searches Require Experiment,” was published, in which it was noted that “it is time to think about the right to experiment in the field of education.” One such experiment may be the development of a system of cost accounting in higher educational institutions. The essence of this system is that a higher educational institution, just like any industrial enterprise, must build its work on the principles of cost accounting.

However, if in the work of an industrial enterprise its “face” is determined by a number of direct quantitative and qualitative indicators (marketed output, profit, profitability, quality of the products produced), and all of its production and economic activity can easily be assessed by a direct balance-sheet method, then for a higher educational institution this method of assessment cannot be adopted by direct borrowing.

At present the Ministry of Higher and Secondary Specialized Education has established a number of criteria by which the work of a higher educational institution can be evaluated. The introduction of these criteria contributes, to a certain extent, to reflecting the level of work of a higher educational institution in all areas of its activity, but, in our view, these criteria still do not provide a complete picture of the entire “production and economic” activity of the institution.

There is now an opinion that the products of a higher educational institution are only new cohorts of young specialists, and that a higher educational institution is an organization that only consumes monetary resources but does not produce output in monetary terms. However, such an opinion is erroneous. The products of higher educational institutions are not only new cohorts of young specialists, but also new machines, materials, technological processes, i.e., valuable products created by its employees.

This can be considered using the example of the Tomsk Polytechnic Institute. Thus, for example, in 1967 the Tomsk Polytechnic Institute carried out contract work totaling 2,852 thousand rubles. The calculation of the annual economic efficiency from the introduction of completed research and experimental-design works, for only 19 topics out of 107, gives a total of 9,906.4 thousand rubles.

Some of these topics may be noted: “Investigation of methods and development of means for determining the moment of meeting of coal seams

“...in core drilling,” with expenditures for the performance of the work amounting to 15.0 thousand rubles, yielded savings for the Kuzbassuglegeologiya trust alone of 109.9 thousand rubles. “Development and testing of a pilot-industrial model of a leakage indicator for a gaseous product,” with expenditures of 10.0 thousand rubles, yields savings at one plant alone of 150.0 thousand rubles.

For a number of other completed works that have been tested in practice, it does not seem possible to calculate their economic effectiveness, although these works have great value for the national economy.

Thus, for example, the Research Institute of Electronic Introscopy at TPI is engaged in theoretical and experimental research in the field of nondestructive radiation methods for testing materials and products; it carries out the development and manufacture of complex automated betatron, isotope, and X-ray flaw detectors and introscopes, as well as the development and manufacture of electron accelerators. On the basis of isotope and X-ray installations, scintillation flaw detectors have been created that make it possible to inspect products made of materials with a density of 3 g/cm³ and a thickness of up to 400 mm, with high productivity and inspection sensitivity; X-ray television introscopes have been developed that make it possible to carry out visual quality control of welds up to 10 mm thick; work is being completed on the creation of a radiation flaw detector for inspecting construction products at construction sites and under factory conditions. The institute has also developed a betatron gamma-introscope intended for quality control of hot metal during the rolling process at slabbing and blooming mills in metallurgical shops and plants. Research is being completed on a gamma-introscope intended for automated quality control of products having a complex configuration.

Or, for example, the work carried out by a group of staff members of the geological-prospecting faculty on studying the migration conditions of microcomponents in the waters of semi-closed geological structures and on assessing areas promising for special prospecting work for ores of nonferrous and rare metals. The result of their work is the compilation of forecast hydrogeochemical maps with the identification of promising areas for titanium, zirconium, chromium, manganese, nickel, tin, zinc, lead, copper, and mercury. In addition to the characterization of hydrogeological structures, materials are presented on the microcomponent composition of soils, which constitutes a basis for agrochemistry and for the development of agriculture in the given territory.

In addition, out of the total sum of economic-contract work performed in 1967, the institute received a profit of 510 thousand rubles.

Student detachments of our institute made a great contribution to the national economy. Thus, in 1967, in the districts of the oblast, they absorbed capital investments totaling 3,833 thousand rubles. During this time they built 63 eight- and two-apartment houses, 4 schools, 4 power stations, 26 transformer substations, more than 238 kilometers of high-voltage power lines, two hospitals, and a number of other facilities. More than 1,700 students took part in the work. Although this sum of absorbed capital investments cannot be regarded as an economic effect achieved as a result of the institute’s “production-economic” activity, it too must find its reflection in the indicators that define the “face” of the institute. In addition, more than 4,000 students were engaged in agricultural work in the districts of the oblast, who also made their contribution to the creation of material values for society.

Thus, from these examples alone one can see that a higher educational institution is an organization not only consuming, but...

and “producing” monetary values, while being a sufficiently profitable organization. From the state budget, 10.8 million rubles were allocated to the institute in 1967, while the economic effect, from the examples given alone, could be estimated at a sum exceeding these budgetary appropriations.

Thus, the basic principles of cost accounting—operational and economic profitability, material interest, and responsibility—can be made the foundation of the activity of a higher educational institution.

In developing these principles for a higher educational institution, one might dwell on the following points. If, on the basis of Resolution No. 237 of the Council of Ministers of the USSR of March 22, 1967, a new procedure for planning expenditures on scientific-research work was introduced for scientific-research institutions and the rights of the directors of research institutes were expanded in the sphere of operational and economic independence, then this procedure has not yet been extended to the educational process in higher educational institutions. A higher educational institution does not have the right independently to establish the number of its principal and auxiliary employees.

In recent years higher educational institutions have developed many new machines, instruments, installations, and high-performance technological processes. And if employees of industrial enterprises receive substantial monetary rewards for this, this provision does not apply to employees of higher educational institutions. In higher educational institutions there is practically no system of economic incentives and material encouragement for the development and introduction of new technology for industry. In our view, such a procedure should be introduced whereby an enterprise, for a certain period of time, would make certain deductions into the institute’s budget from the total annual economic effect.

In general, clarity and precision must be introduced into the relations between a higher educational institution and production. At present, the formal act of acceptance of work is the basic document for mutual settlement between the higher educational institution and the enterprise. It should give way to a document reflecting the economic efficiency, the assessment of quality, and the subsequent fate of the research.

In order to enhance the role of higher educational institutions’ copyright in their developments, patents, inventions, technical documentation, etc., every research institute and industrial enterprise should be obliged to pay into the institute’s funds a certain one-time fee for the right to use these materials. Payment should be introduced for the institute’s training of targeted postgraduate students and trainees, for conducting refresher courses, etc.

The system of material encouragement is insufficiently developed also for direct participation in scientific-research work performed both under economic contracts and under the state budget. At present, for example, leading research workers occupying the post of dean or deputy dean do not have the right to participate in work on contract topics merely on the grounds that they receive an additional payment for the performance of the specified duties. But if a leading research worker performs the duties of head of a department and also receives the corresponding payment for this, then this restriction does not apply to him. It follows that the best scholars cannot be appointed deans.

We could also involve a considerably larger number of students than we do now in the production of scientific and industrial output. Students are co-authors, and sometimes authors, of various developments. However, according to the instructions currently in force, a student may be enrolled only at the rate of a laboratory assistant, even if he works during vacation time. As a result, some students go to work as loaders, stokers, watchmen, etc. There is no need to prove that work in a laboratory is considerably more useful for the education and formation of a future specialist than work as a loader.

Tomsk Polytechnic Institute, like many other higher educational institutions, has established experimental workshops, which operate on a cost-accounting basis and work with full self-sufficiency. But the trouble here is that the Ministry plans the number of employees simultaneously with the wage fund. Since workshop employees are not covered by the 15% regional coefficient added to the wage rate, and taking into account the general shortage of labor in Tomsk Oblast, the workshops, as a rule, are not staffed with workers. At present a situation has arisen in which the workshops can operate only one shift. As a result, they cannot cope with a large volume of work, while the equipment and premises are used insufficiently. In carrying out certain scientific developments, the institute could organize in these workshops the production of pilot (small) batches of the machines, instruments, and materials it has developed (titanium pumps, microcalorimeters, rotary electrostatic generators, high-voltage pulsed generators of the nanosecond range, flaw detectors for various purposes, and other products), which would facilitate their most rapid introduction into production. But the restrictions noted above prevent us from doing this.

In industry, a search is under way for new economic levers that make it possible to increase the efficiency of enterprise operations. We consider it expedient to accelerate the organization of a search for economic levers that would also improve the activity of higher educational institutions, which have large teams of highly qualified workers at their disposal.

If higher educational institutions are granted greater independence on the basis of the developed system of cost accounting, then, without doubt, they will quickly find ways of working more productively and of using enormous capital investments more effectively.