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New admin spending study released

The 12-week study said the U operates as collection of departments, rather than a “unified enterprise.”

A study on University of Minnesota administrative spending  was released and reviewed by the Board of Regents Thursday. The study will be discussed in more detail Friday during the monthly regents meeting.

The 12-week study by Huron Consulting Group was mandated by the Legislature earlier this year.  The requirement was prompted by a December article in the Wall Street Journal that criticized the University’s administrative spending.

The 175-page report  outlined multiple opportunities for improvement, but also noted the University “is already undertaking major initiatives to promote efficiency and effectiveness and to reduce administrative costs.”

One of the main improvement areas the study pointed to is reporting structures between departments, saying the University – like many public research universities – operates as collection of departments, rather than a “unified enterprise.”

The report acknowledged administrative reporting structure changes the University has made to date but said the, “full benefits of improving alignment and reducing duplication have not yet been achieved.”

Huron Consulting also suggested the University review and job classifications  and update them to reflect current and accurate expectations for administrators.

The report focused on four key areas: finance, human resources, information technology and purchasing processes. 

Throughout the four areas, Huron Consulting suggested the University work towards consolidating certain internal processes , use new metrics to measure performance and need , and automate forms that are currently done via paper– like invoices and reimbursements .

The report concluded that overall, the University does not stand out among its peers for administration spending  in the four key areas. However, it also noted much of the data received from peer schools was incomplete or estimated .

In addition, Huron praised the University’s budget model, saying it, “promotes financial accountability for each unit and campus.”
Like another administrative study released earlier this year by Sibson Consulting Group, Huron’s report said the plan, “is a multi-year effort.” But in a March regents meeting, President Eric Kaler said he would move quickly to implement suggested improvements.

“We will put our foot on the gas,” he said.

In March the University received the results of a smaller study by New York-based Sibson Consulting, which determined the University’s ratio of managers to employees was low in some areas.

Between the two studies, the University has paid more than $540,000  in analyzing administrative spending.

The cost for the studies has drawn criticism from some legislators, including Representative Gene Pelowski, DFL-Winona, who chairs the Higher Education Finance and Policy Committee.

“To spend an additional half-a-million dollars on something they already should have known is part of the U’s problem,” Pelowski told the Daily in March.

But Kaler said the costs were necessary to change the “status quo,” in the March regents meeting.

Sibson Consulting will continue an extended study for the University this year, according to a University press release. 

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