University of Minnesota sees “opportunities to improve” in administrative staffing report
In a new snapshot of the University of Minnesota’s administrative ranks, leaders see opportunities to make the U leaner.
For an ongoing effort to examine overhead, a consultant analyzed four of 50 administrative offices at the university. Among other things, it found that supervisors in finance, human resources and procurement oversee about four administrators, on average, compared with more than nine in information technology.
Officials said there are often good reasons why a manager might oversee a smaller team, but they said some of the findings merit a closer look. University President Eric Kaler said any arrangements with fewer than six or seven staffers reporting to a manager call for further scrutiny.
“Clearly, we have opportunities to improve,” Kaler told the Board of Regents Friday, March 8, in a preview of a report he’ll make to state lawmakers early next week.
The Legislature called for the analysis in January in order to settle once and for long-standing questions about overhead at the U. Lawmakers wanted a preliminary report before they tackle the school’s $1.1 billion biennial state aid request in mid-March.
Terri Bonoff, the DFLer from Minnetonka and chair of the Senate Higher Education committee, said she gives the university an A for its responsiveness. Bonoff, who requested the report, said it vindicates lawmakers’ suspicion that the U could trim administrative costs. And, she said, “They are willing to do something about it.”
university is paying New York-based Sibson up to $48,000 to complete the review. The U also has hired Chicago-based Huron Consulting, at a cost of $495,000, to help get a handle on a range of administrative costs and compare them to those at other public and private institutions.
Kaler will present a summary of the report Monday as he pitches his state aid proposal to the House Higher Education Policy and Finance Committee. He will give a more complete presentation to the Senate higher education committee on Tuesday.
Kaler told regents it’s too soon to prescribe specific administrative structure changes, but once the analyses are complete, he plans to move fast “in a transparent and fair way.”
“We will put our foot on the gas,” he said.
Legislators have long clamored for a more precise gauge on how efficiently the university runs. A December Wall Street Journal story rekindled the issue, even as Kaler charged that the article put the administration’s growth out of context.
In his Friday presentation to the board, Kaler ticked off a long list of steps that have reduced operating expenses on his watch.
School officials have said unclear or outdated human resources data got in the way of making a comprehensive analysis sooner. Kaler set out to streamline job descriptions and administrative structure information after he took over in 2011.
In its analysis, Sibson zeroed in on the number of supervisors in each office and the number of staffers they supervise. The report said the four offices have four or five levels of management between their top supervisor and most junior employees — a reasonable number. But some of those supervisors have relatively few underlings reporting to them.
Richard Pfutzenreuter, the university’s chief financial officer, has stressed there are often perfectly good explanations for a small team of charges. In a hypothetical example, he said an administrator in his department might have just one report — while managing a billion-dollar portfolio of university debt.
Still, at one level in his department, which Kaler recently praised as an example of leanness, 17 administrators supervise 47 people, Phutzenreuter pointed out.
“That doesn’t look right; it alerts me,” he said. “If there are not good reasons, there are going to be changes.”
The report also looked at salaries, with averages for supervisors ranging from about $80,000 in procurement (which handles purchases for the U) to $110,000 in information technology. The U has said its pay is in line with other public universities.
Sibson is slated to complete its analysis of all 50 offices this summer. University officials met with Huron representatives for the first time this week on a benchmarking study that puts costs at the U in a national context.
Regents praised Kaler’s efforts to size up and rein in administrative costs.
“This is an extraordinary accomplishment in a short period of time.” Regent Patricia Simmons said.
She expressed some concern about the price tag of the two studies, but Kaler said they are a worthwhile investment.
Bill Gleason, an associate professor at the U and a long-time critic of administrative costs, said the university has struck a defensive tone on the issue for too long. He said he is glad to see the school moving toward owning the goal of getting leaner.
But Gleason said he worries the university might become an easy mark as Gov. Mark Dayton revisits his budget after dropping a sales tax expansion plan this week. In his budget proposal, Dayton has set aside $80 million more for the U over two years, compared with the $91.6 million increase Kaler is requesting.
He said he hopes legislators focus on the U’s willingness to pare administration, not on the fact that there’s room to pare.
“They shouldn’t get whacked because of that problem,” he said. “They’re acknowledging it, and they’re working on it.”
Mila Koumpilova can be reached at 651-228-2171. Follow her at twitter.com/MilaPiPress.