Study finds targets for cost-cutting at University of Minnesota
- Article by: Jenna Ross
- Star Tribune
- June 14, 2013 - 5:01 PM
A much-anticipated report sparked by complaints about University of Minnesota spending spotlights targets for streamlining the school’s administration.
Consultants found that staffing within four of the U’s administrative offices is “within a broad range of responding peers,” but does not explicitly say whether the U spends more on administration than similar universities. But the report released Thursday could lead to big savings, said Laura Yaeger, executive vice president at Huron Consulting.
“We’ve got opportunity and a lot of work ahead,” said Richard Pfutzenreuter, the U’s chief financial officer.
Top state lawmakers requested that the university compare its administrative costs against other big research universities after perennial concerns about administrative spending intensified during the last legislative session. Huron spent 12 weeks digging into four offices — finance, purchasing, human resources and information technology.
Legislators said Thursday night that they were still digesting the findings but were hungry for more specifics. Legislation requires the U to draft an “implementation plan” by mid-September.
“I’m pleased that the report identified that we must change … the way we are organized to be able to be cost-effective,” said Sen. Terri Bonoff, DFL-Minnetonka, chairwoman of the higher education committee. While the report shows that the university’s structures mirror those at other schools, “we all have built up this infrastructure … that’s duplicative.”
The new report, for which the U paid $495,000, points out areas where the university is highly decentralized, sometimes suggesting that more clustered structures could be more efficient.
Just 8 percent of the university’s finance and purchasing employees are housed in its central offices. As a result, that central staff has limited control of hiring and “limited oversight of the performance of distributed finance staff.”
Across the country, universities are rethinking their structures to respond to budget constraints, Yaeger said. During a media briefing Thursday, she praised the university’s work to improve its processes and become more efficient.
For example, the university is making “good strides” in consolidating its desktop support, she said. Right now, it has 169 computer users to one IT helper — far below a 400-1 ratio on the low end of similar universities, the report says. Reaching that number would “drive significant savings,” Yaeger said.
The new report finds that the U spends more on human resources than the other universities. Staffing there “does not appear significantly out of line with five of its peers, but it appears larger than two others,” the report says. Meanwhile, the U’s central purchasing staff was smaller than three other universities that responded to Huron’s survey.
The new report goes beyond staffing. It praises the university’s purchasing strategies but points out that the process behind travel and expense reimbursement is “still largely paper based.” The U’s adoption of tools in those areas “is well below industry-leading levels.”
This is the second of two reports requested by Senate Majority Leader Tom Bakk, DFL-Cook, and Bonoff in January after the Wall Street Journal singled out the U for inflating ranks of administrators, saying the school had gone “on a spending spree over the past decade.”
U President Eric Kaler contested a number of the Journal’s conclusions but promised a swift review.
The first report, released in March, analyzed the structure of a slice of the U’s workforce — about 600 positions in the same four offices. It concluded that there were “few areas that require attention” but says the U “could improve” its staffing per supervisor. Consultants will finish that analysis for the rest of the university’s workforce this summer, officials said Thursday.
Jenna Ross • 612-673-7168
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