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Changing the Accounting System to Foster Universities’ Financial Sustainability: First Evidence from Italy

Author

Listed:
  • Ferdinando Di Carlo

    (Department of Mathematics, Computer Science and Economics, University of Basilicata, via Nazario Sauro, 85100 Potenza, Italy)

  • Guido Modugno

    (Department of Economics, Business, Mathematics and Statistics, University of Trieste, Piazzale Europa 1, 34127 Trieste, Italy)

  • Tommaso Agasisti

    (Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Via Lambruschini 4/b, 20156 Milano, Italy)

  • Giuseppe Catalano

    (Department of Computer, Automatic and Management Engineering “Antonio Ruberti”, Sapienza University of Rome, via Ariosto 25, 00185 Rome, Italy)

Abstract

According to the European University Association, nowadays financial sustainability is one of the key challenges for Higher Education Institutions. The financial sustainability of public universities is threatened by cutbacks in public funding and by society’s growing demand for improvements to the volume and quality of services provided. A recent reform in Italy has determined that universities are required to move to accrual accounting, starting from the assumption that this system responds more effectively to issues relating to financial stability control. This paper evaluates whether the new financial reporting system is better placed to represent the universities’ conditions of financial sustainability. Moreover, specific measures have been developed to investigate which financial strategies, if any, have been adopted in Italian universities to react to the new competitive context. Working in collaboration with practitioners from the HE sector, the research team developed a framework based on specific financial ratios to assess the financial sustainability of these institutions and to analyse their financial strategies. The findings reveal that, notwithstanding some common features, there are significant variations between Italian universities and they are addressing the new challenges with a range of different approaches.

Suggested Citation

  • Ferdinando Di Carlo & Guido Modugno & Tommaso Agasisti & Giuseppe Catalano, 2019. "Changing the Accounting System to Foster Universities’ Financial Sustainability: First Evidence from Italy," Sustainability, MDPI, vol. 11(21), pages 1-18, November.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:21:p:6151-:d:283442
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    References listed on IDEAS

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    1. Giovanni Coran & Ugo Sostero, 2020. "Il bilancio degli atenei: schemi di analisi," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2020(3), pages 113-141.
    2. Giovanni Coran & Giorgio Donna & Ugo Sostero, 2023. "L?analisi del bilancio delle universit? attraverso gli indici: indagine su un campione di atenei statali," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2023(1), pages 165-193.
    3. Walter Leal Filho & João Henrique Paulino Pires Eustachio & Adriana Cristina Ferreira Caldana & Markus Will & Amanda Lange Salvia & Izabela S. Rampasso & Rosley Anholon & Johannes Platje & Marina Kova, 2020. "Sustainability Leadership in Higher Education Institutions: An Overview of Challenges," Sustainability, MDPI, vol. 12(9), pages 1-19, May.
    4. Young-Hwan Lee & Kwon-Sik Kim & Kwang-Hoon Lee, 2020. "The Effect of Tuition Fee Constraints on Financial Management: Evidence from Korean Private Universities," Sustainability, MDPI, vol. 12(12), pages 1-19, June.

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