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Business and Policy Areas
Business and Policy Areas

Activity-Based Costing Guide Released for Community Colleges

October 1, 2014

A guide recently released by Johnson County Community College and the American Institutes for Research is designed to help community colleges—and other institutions—understand how analyzing key activities and reallocating budget resources accordingly may help improve student success metrics. The ABCs of Activity-Based Costing in Community Colleges is available on the Maximizing Resources for Student Success website.

Funded by the Bill & Melinda Gates Foundation, the Maximizing Resources pilot provided participating community colleges with activity and cost metrics in the functional expense categories of academic support, student services, and instruction. By breaking down larger expense categories into their activity components, activity-based costing can help colleges monitor the use of resources for particular types of activities. Subsequently, by analyzing the cost of identified activities in relation to key student outcomes, institutions can better align spending decisions with priorities.

The cornerstone of the Maximizing Resources for Student Success project was the benchmarking capabilities provided to participating community colleges. Community college pilot participants were given the opportunity to benchmark a snapshot of their results against those of other participating institutions. For pilot participants, the cost data provided useful information and benchmarking with others helped decision makers begin to assess how the efforts of faculty and staff might shift to assist with meeting the college's student success objectives.

The project is now accepting members for a full national benchmarking study. The national effort uses the simplified version of activity-based costing to help community colleges examine instructional, student services, and academic support activities. The study will gather the elements that contribute to the cost of each of those activities and the associated cost drivers. Benchmarks can be examined by participating community colleges.

NACUBO community college members who register to participate in the study by October 27 will receive an additional $100 discount (on top of the early bird rate) to join the project. Use the discount code NACUBOmax. 


Sue Menditto
Director, Accounting Policy

Bob Shea
Senior Fellow, Finance and Campus Management