A complete accounting

President Eric Kaler calculates that his administration has reduced the annual cost of administration by $32 million.

But his calculation includes only the administrative costs that have been reduced. It omits the administrative costs that have increased.

For the last two fiscal years, the administration has presented an expense summary for cost benchmarking to the Board of Regents.

The summary divides expenses into three broad categories: direct mission delivery (instruction, research and public service), mission support and facilities, and leadership and oversight.

The total expenses for direct mission activities increased by about $33 million — from $1.48 billion in fiscal year 2012 to $1.52 billion in fiscal year 2013.

There were reductions of some expenses in the other two categories — mission support and facilities, and leadership. But there were increases in other expenditures in those two categories that were even greater. Some of the increases were for the compensation of administrators and staff, and other increases were for non-personnel expenses such as administrative supplies, administrative equipment, repairs and maintenance.

There was a net increase of about $41.7 million in expenditures for mission support and facilities — from $957 million in fiscal year 2012 to $999 million in fiscal year 2013. There was a net increase of about $7.9 million in expenditures for leadership — from $264 million in fiscal year 2012 to $272 million in fiscal year 2013.

The one expense that is most symbolic of the cost of administration is the compensation of leadership.

The highly paid senior administrators, deans and directors collected more than about $2 million in additional compensation for fiscal year 2013. The total compensation for those leaders in fiscal year 2013 was $104 million.

The administration spent an additional $560,773 on administrative consulting and professional services. The total expenditure for such services in fiscal year 2013 was $35 million. 

Note that the total expenditures for mission support and facilities and leadership and oversight (about $1.27 billion) are almost as much as the total expenditures for the direct mission activities of instruction, research and public service (about $1.52 billion).

Kaler deserves credit for recognizing that excessive costs of administration are a financial burden on students, parents and the citizens of our state. But if Kaler is to be true to his pledge of transparency and accountability, then he should not be publicizing a partial calculation of the cost of administration. We need and deserve complete candor — and a complete calculation — rather than a public relations campaign.

Kaler has promised to reduce the cost of administration by an additional $90 million during the next six years. That total amount is only 7 percent of the total expenses in fiscal year 2013 for mission support and facilities and leadership. We can and should reduce those costs by a substantially greater percentage.

A former interim University president said in a Nov. 16 letter in the Star Tribune, “With real productivity gains, tuition could actually be reduced, not just frozen, assuming that state funding for the U holds where it is at currently.”

Reducing tuition is an objective that can be realized.

Last year, St. Paul’s Concordia University demonstrated that tuition can be slashed — by $10,000 per year — when it recognized that the high-tuition, high-financial aid experiment has failed.

We must once again make higher education affordable for all our children, just as it was for the senior administrators and regents who set tuition today.