In a major shakeup at the University of Minnesota Medical School, university president Robert Bruininks has decided to combine two top jobs, removing Dr. Deborah Powell as dean and temporarily turning her duties over to Senior Vice President Frank Cerra.

Cerra will assume Powell's duties July 1, and a national search for Cerra's replacement will begin in 2010.

In a memo to the Board of Regents, Bruininks said he was combining the job of senior vice president for health sciences -- currently held by Cerra -- and that of medical school dean into a single position.

The move was motivated by the need for "strong, focused leadership for the health sciences and the ability to align and streamline resources and core administrative functions in this severely challenged economy,'' Bruininks said.

He said he expects to appoint Cerra's successor by the fall of 2010.

Meanwhile, Cerra and Powell are discussing a future administrative role for her in medical education, he added.

The university released a short statement about the changes Thursday after a copy of Bruininks' memo was posted on a faculty member's personal blog.

University spokesman Dan Wolter said the move was "purely a cost-saving mechanism" for the money-losing school. He said Bruininks had asked Cerra to cut $7 million to $10 million in administrative costs. Powell currently draws a salary of $242,149 a year while Cerra makes $439,570. Wolter said it had not been decided if Powell would get a pay cut in her new role.

The 154-year-old medical school is a flagship graduate program at the University of Minnesota, with 920 students and 880 residents and fellows.

Cerra first came to the university in 1981 and later became dean of the medical school. In 1996, he was named senior vice president of health sciences, overseeing the schools of medicine, dentistry, pharmacy, nursing, public health and veterinary medicine.

Powell came on board in 2002 to great fanfare as the medical school's first woman dean. A former pathology professor and dean of the University of Kansas medical school, she was the first outsider in decades to lead the medical school. She arrived at a time when the school had rebounded from a series of research scandals in the early 1990s.

At the time, Powell said one of her goals was to raise the school's national ranking in research grants. Powell began a wide-ranging modernization of the school, dubbed Med2010, and introduced a more flexible version of the traditional four-year medical degree, allowing students to take time off for other pursuits and finish in six years.

The school has improved its reputation for primary care under Powell, according to U.S. News & World Report, but it has struggled to improve its national ranking for research funding. In 2000, the school ranked 27th in funding from the National Institutes of Health. Five years later, it had slipped to 31st place.

Meanwhile, the school has labored under a series of ethics questions. Late last year, the Star Tribune reported that Dr. Leo Furcht, whom Powell named as co-chair of an ethics task force, had been disciplined for secretly steering a $501,000 research grant to his own company.

In 2004, Powell banned Furcht from conducting industry-sponsored research for three years.

In 2007, Powell appointed Furcht to co-chair a new task force to reform the school's conflict-of-interest policy. However, task force members were not formally told of the disciplinary action against Furcht, and the episode prompted internal complaints among students and faculty.

"After that came out, the students were very upset, and the sense was she never took conflict of interest seriously,'' said Josh Lackner, a fourth-year medical student who was a member of the task force. "To many people, this was a very embarrassing illustration of that.''

Powell herself has faced questions for her board seat on PepsiAmericas Inc., a Minneapolis-based bottler. In 2007, she received $130,000 in cash and stock for sitting on the company's board, according to a proxy statement.

Chen May Yee • 612-673-7434 Staff writers Janet Moore and Warren Wolfe contributed to this report.