Research On Financial Risk Control In State-run Higher Vocational Schools

Having gone through the hypernormal development during the past decade, the higher vocational education has played a significant role in China's education evolving from elitist education into mass education. While expanding the number of recruits and yet not getting enough investment from the government, higher vocational schools, as part of tertiary education like regular institutions of higher education, have been running by raising debts and funds, and have faced ever-increasing financial risks. After the peak of student recruitment expansion in 2008, State-run higher vocational schools have been facing more severe pressure stemming from financial risks in the highly competitive market as these schools are at the bottom of the higher education hierarchy system. The thesis analyzes with the combination of normative study and empirical study factors which might bring about financial risks; analyzes based upon the status quo of financial risk control the underlying causes; and suggests constructive measures in future financial risk control, including establishing multiple management structure, efficient accounting information systems, integration of operating budget, and financial risk warning, so as to effectively put financial risks under control and contribute to healthy and sustainable development of higher vocational education; and finally analyzes based upon cases the application of the system of financial risk warning index.The innovation of the thesis lies in that, based on the data collection platform of training and education situations in higher vocational schools, the author suggests to establish and bring to public a higher vocational school financial data base, set up a warning index system based on training costs per student; to analyze the position of individual schools'financial situations in vocational education, through comparisons in financial indices between regions, between schools of similar categories, and nationwide; and to put forward a simple and easy financial risk coefficient, with the help of Activity-based Classification and sequencing. Therefore, not only can we through the financial risk coefficient in question determine its risk position in vocational education, namely what it is, but according to accrual basis, namely how it should be, help determine the amount of funds to be raised and invested in individual schools or the entire vocational education system, so that higher vocational education gets sufficient financial support and take the path of intensive development. The drawbacks of the thesis is that, due to the fact that state-run higher vocational schools currently adopt the cash-based accounting system, costs per student has not been accurately calculated yet, the objectivity of the data employed in cased studies has not been verified by a third party, on top of that, the sample data is really limited, which imposed a negative influence on the accuracy of the analysis and conclusion, and the effectiveness of the suggested measures.