Data envelopment analysis for financial efficiency evaluation of undergraduation programs of a hei community

Abstract

The overall objective of the research is to evaluate the financial efficiency of under graduate programs at a community Higher Education Institution (HEI). The research is characterized as descriptive case study with a quantitative approach through a mathematical modeling of data envelopment analysis (DEA). The survey results showed that 7 programs are efficient (50.00%) and 7 courses are considered inefficient (50.00%). The DEA technique reveals that in order to seek financial efficiency, inefficient programs need to increase their revenue and reduce administrative expenses and other operating expenses. Given the results, it is concluded that the management actions indicated by DEA require a critical reflection on the part of managers. The first action, which involves the possibility of increasing the revenues, is linked mainly to university infrastructure conditions available and to the socioeconomic factors of the region and potential students; in addition to complying with prices charged by competitor programs. The second action, which is related to operating expenses, is a discussion on the real necessity of spending and the development of managerial policies that increase the controls over the expenses to prevent waste, abuse and excess consumption without reasonable justification.