Abstract
This study examined the working capital management practices employed by public universities and how the same affect the consistent, timely and adequate core service provision. Universities exist to provide three important services of teaching, research & consultancy and community service. This study was motivated by the proposition that successful university education administration is made possible by the proper integration of working capital management policies in the strategic operations of the institutions. This was informed by two theories; the system’s and the institutional. The independent variable (the predictor) in the conceptual frame work is working capital management policy/approach with its interacting working capital components (current assets and current liabilities) while the dependent variables are the services delivered which include: Teaching, Research and Publications. These services/activities translate into and are the determinants of the volume of both expenditure and operating income of the institution and ultimately forms the basis of mission and focus of the institution. Backed by the positivist research philosophy which views the world to exist externally and to be measurable by objective scientific and mathematical methods, the mixed method approach which has been considered to be highly reliable in obtaining knowledge in an objective environment was used. In this study the working capital management approach taken by each of the universities were taken to be the predictor or independent variables. The working capital variables were investigated using document analysis by looking at the income statement, balance sheet, operating cash flow statements as sources of secondary data. Primary data relating to the independent variables was obtained through questionnaires and interviews with the officers responsible for working capital management. The key issues pursued from both primary and secondary data were: financial resource planning and allocation procedures, operating cycle time, operating efficiency, liquidity position, sources of income and expenditure/cost analyses for at least five years.
The correlation coefficient of 0.9584 or +1 show that there is a strong positive correlation between liquidity pattern and the time period of the operations. The coefficient of determination for CBU affirms that 92% of the variations in the liquidity can be explained by the variation in time periods of the operations.
From the analysis it was established that core educational service provision in public universities was to a greater degree affected by the working capital strategies adopted by the institution. To be more specific, the choice of the operating cycle and the nature of the programmes being undertaken have direct implications on the rate, consistency and quality of service delivery. It was further discovered that Education administrators in public universities are faced with the challenge of striking a balance between the high costs of providing education and the need to satisfy the demand for educational services in the midst of erratic funding from the government and the changes that are taking place in the industry. Furthermore, the study observed that, the challenges were caused by factors which are both internal and external to the institution’s environment.
The general conclusion drawn from the study was that a greater percentage of the working capital management challenges affecting service delivery in public universities were attributed to accounts receivable management policies.
KEY WORDS: Public universities, Working Capital, Working Capital management, accounts receivables, current assets, Current liabilities, Liquidity, Operating Cycle, Core services, education administration.
More..