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Sunday, September 26, 2021

UC utilizes consulting firms to manage budget

Budget cuts have never been as drastic for the UC system as they are during the current crisis. Deciding on how, what and who to cut from the budget is an issue that UC administrators have begun to delve into.

UC Berkeley has recently employed the consulting firm Bain and Company to evaluate their budget, according to The New York Times.

This outside perspective was signed to a major contract in hopes of reducing costs while increasing efficiency. Although the partnership is estimated to cost around $3 million, it has proposed ways to better organize the use of their spending to potentially save millions.

“Bain is letting us run our operations to help save money for the educational enterprise,” said Dan Mogulof, executive director of public affairs at UC Berkeley. “This partnership focuses on the bureaucratic foundations and we feel an internal strategy doesn’t yield the same results of an outside consultant.”

At UC Davis, Chancellor Katehi has implemented a more modest program – the “Administrative Process Redesign Initiative.”

John Meyer is Vice-Chancellor of the newly formed Office of Administrative and Resource Management.

“While still striving to reduce cost and increase efficiencies, we have reassigned several staff members to this project rather than retain a consulting firm,” Meyer said about the budget initiative.

The Administrative Process Redesign Initiative, which began in October, merges the Administration Office with the Resource Management and Planning Office. The initiative has two objectives: review administrative units so recommendations to save money can be made and get a better concept of shared services, like Informational Technology support. Instead of having fragmented departments throughout the school, this initiative tries to centralize administration and campus services.

Stan Nosek, Vice Chancellor of Administration at UCD, was asked by campus leadership to extend his retirement to help implement this program.

“Our main goal is to strategically centralize the structure of our departments in order to eliminate the excessive and unnecessary costs,” Nosek said. “If the delivery of services is reduced we will have more funding available to use on our core mission – teaching and research.”

Nosek said that eliminating the redundant units, such as IT, was imperative in forming the creation of the initiative. Combining the two offices helped to save money.

“With this approach, internal growth is also possible, which will give us expertise over time,” Nosek said.

Approximately $900,000 will be saved each year from merging the offices.

UCD has not employed an expensive consulting firm yet. Nosek made it clear there will be some outside experts and consultants aiding the team beginning in the next calendar year. However, both Nosek and Meyer said any deal made will not be as significant as the partnership reached between UC Berkeley and Bain and Company.

“Consultants are going to be used for different parts under review,” Nosek said. “There are some strengths we don’t have in evaluating our research, like philanthropy and donations. Consulting firms raise alarm, but this is a comprehensive capital campaign.”

Victor Sanchez, President of the University of California Student Association, believes a more open dialogue between the administration and the campus communities would help solve some of these issues, as well as alleviate frustration.

“This is another step towards reaffirming the belief that there is a lot of mismanagement within the administration and regents,” Sanchez said. “The experts on the issues are inside the University system, so obtaining outside consultants shows an inability to maneuver through this budget crisis.”

MICHAEL STEPANOV can be reached at city@theaggie.org.

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