# LCMS Convention Proceedings_St. Louis Missouri_1947_S226
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

224 SEMINARIES AND COLLEGES

mary requirements of these institutions in this particular area
(as revealed by an informal survey) include establishment of
business departments which are directly responsible to the Presi-
dent of the college and the introduction of a cost accounting system
which includes separate categories for 1) current funds, 2) endow-
ment (or agency) funds, 3) plant funds.

Extensive recommendations on this subject have been made
by the National Committee on Standard Reports for Institutions of
Higher Education. The recommendations of this National Com-
mittee have been accepted by the regional accrediting agencies.
The details of the reports required by these agencies coincide with
the arrangements recommended by the National Committee.

In addition to the required adjustments indicated by Synod’s
desire to have the schools accredited, it is necessary also to have
these additional data available from the Preparatory Schools for
the purpose of making periodic cost analyses which would serve
as a basis for adjustments between Synod and the local administra-
tions of the Preparatory Colleges when contracts are concluded
for the purpose of refunding to Synod any costs which have been
occasioned at the institution by the needs of general education.

It can readily be seen that if an educational institution con-
ducts auxiliary enterprises (dormitory, dining room, etc.) as well
as an educational program, it should be possible to properly divide
and allocate all the direct costs, such as heat, light, janitor service,
etc., in equitable proportions to the various activities involved. In
many institutions heat and light are furnished to all buildings by
a central plant, water is billed to the institution from a single
meter, the same janitors serve the general plant and the buildings
of the auxiliary enterprises. Furthermore, both general education
students and ministerial or teacher-training students are served
by the same instructional staff and the same physical plant in most
institutions. The difficulty of determining proportionate construc-
tion, housing, or instruction costs under such circumstances is
readily apparent.

As long as Synod maintains its unwillingness to assume any
costs in connection with the general education program at her
institutions, there remains the necessity of introducing a cost
accounting system by means of which accurate cost-analyses be-
come possible. It is necessary, first of all, to determine correct
allocations of costs between the educational program and the
auxiliary enterprises; secondly, we must be able to determine the
per-student cost in both categories; thirdly, to facilitate regional
accreditation, the system should be characterized by reasonably
close conformity to the recommendations of the National Committee
on Standard Reports for Institutions of Higher Education.