Cost analysis of the education of students in School of Public Health, Kerman University of Medical Sciences, Iran, using activity-based costing model

Quantifying real costs in total and per student is one of the key objectives of budgeting in long-term plans for higher education sector; without any doubt, this will improve the performance of universities. However, the evidences and experiences in this regard are very limited within Iran. The purpose of this study was to estimate and analyze all costs of a school (as a model) compatible with activity-based costing in the logics of operating budgeting. Having reviewed all available relevant documents of School of Public Health, Kerman University of Medical Sciences in one academic year (2010-11), real costs were extracted and categorized. In the same time, all available facilities (classes, laboratories, library, computer rooms, and common rooms), human resources, students, and infrastructures of the school were surveyed. The cost data were grouped into five sections: training costs, research costs, administrative costs, current supportive costs, and maintenance/development costs. The total cost of School of Public Health was 24,726 million Iranian Rial (IRR) consisted of 18,850 IRR for teaching costs, 1,894 IRR for research costs, 2,519 IRR for administrative costs and 1,463 IRR for maintenance and current costs. The total per student cost was 31.11 IRR. The total per postgraduate student cost was 2.5 times more than of undergraduate students. A main part of the costs, particularly salaries, is out of hand of direct managers of the school. These costs are usually hidden, and are not presented in costs at the school level. It seems that fixed salary of academic staff inflated human costs, while it is suggested that with a better educational management, the system could increase their responsibilities, and improve their productivities. Our computation, as a model, may help medical universities around the country to create a clear picture of their costs in line with the rules of operating budgeting.