Management Control System of the University of Southern California

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INTRODUCTION The purpose of this case study is to describe and analyse the features of the management control system (MCS) of University of Southern California (USC). Before commencing the analysis a brief background of USC is provided. The USC, located in Los Angeles, was established in 1880 as a private research institution. The university's academic and administrative programs are led by the president's cabinet, which is comprised of a provost and senior vice president for academic affairs, senior vice president for finance and chief financial officer, senior vice president for administration, senior vice president for university relations, and senior vice president for advancement. USC is governed under the direction of the…show more content…
However, according to Dennis Dougherty, the allocations followed the thumbnail methods which were too brief even though inaccuracies were removed while using them (Merchant & Van der Stede 2007). In order to gain control over the allocation of resources throughout the university and also to balance the monies being distributed amongst the revenue centres a system of participation/subvention was used by the university administrators. These participations were mere equal contributions (20% of the total tuition fees, sales and service income, and indirect cost recoveries) from all revenue centres and were redistributed back to them as block grants called subventions and these participations were portrayed as negative and subventions as positive indirect income. These features in fact enabled university administrators to focus on university priorities and goals. In allocating subventions their main focus was firstly on differentials in the costs of educating students in different fields and secondly, the revenue centres’ cost/quality ratios. There was a variation in the cost of educating students from one school to another, for example, business education is cheaper than the music education but the university tends to charge the same tuition fees to both of them. To balance this cost disparity the subvention allocation was used. There was also an issue with the cost/academic excellence ratios. A school that has
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