Admin. just won’t cut it

Other universities hired consulting firms to reduce administrative costs.

There are two ways to deal with budget shortfalls: raise revenues or cut costs. The University of Minnesota has made clear that it wants to raise revenues largely through tuition but has not fully addressed cost cutting, especially administrative cuts. If University leadership wonâÄôt make cost-cutting decisions to avoid balancing their budget on the backs of students, we need to find a team that will. Last spring, the University of North Carolina hired the consulting firm Bain & Company to help with their budget issues and to make the university more efficient âÄî especially its administration. Bain & Co. reported that UNCâÄôs complex structure had 10 layers of management, and that over 50 percent of supervisors managed three or fewer people. Large research universities seem to invite that kind of administrative complexity and inefficiency. The University of California, Berkeley and Cornell University also recently hired Bain & Co. to consult on budget shortages. Berkeley Chancellor Robert Birgeneau said a âÄúprecipitous drop in funding from the state âĦ has produced a budget deficit of nearly $150 million.âÄù Sound familiar? Lack of state funding has hit the University hard too, and if administrators canâÄôt âÄî or wonâÄôt âÄî make the necessary cuts (due to lack of internal resources or impartiality), we should look to the methods of our peers to solve budget problems. The savings that consultants suggest far outweigh the costs. Berkeley paid $3 million. Bain & Co.âÄôs suggested changes in UNCâÄôs administrative structure would save up to $12 million per year. If our goal was to be among the top three most efficiently run universities, our budget problems wouldnâÄôt be so severe. Administration should hire Bain & Co. to review the UniversityâÄôs administrative structure, and cut accordingly.