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Friday, October 15, 2021

Report blames swelled administration for increasing costs and inefficiency

A recent study echoes a common complaint of protestors who rally against student fee hikes and declining state funding to higher education: the growth of administrators is partly to blame.

In their examination of 198 universities in the United States from 1993 to 2007, the Goldwater Institute, a think-tank based in Arizona, found that the number of full-time administrators increased by 39 percent. Meanwhile teaching, research or service employees grew at 18 percent.

According to the report, compiled with data from the Integrated Postsecondary Education Data System (IPEDS), UC Davis experienced a growth from 3.2 full-time administrators per 100 students to 13.5, a 318.8 percent increase and the third highest on the list. Meanwhile full-time employees in instruction, research and service dropped 4.5 percent from 9.6 to 9.1 per 100 students.

“A significant reason for the administrative bloat is that students pay only a small portion of administrative costs,” wrote lead author Jay P. Greene, Senior Fellow, Goldwater Institute and head of the Department of Education Reform at the University of Arkansas.

“The large and increasing rate of government subsidy for higher education facilitates administrative bloat by insulating students from the costs. Reducing government subsidies would do much to make universities more efficient.”

This comes as the system has witnessed a dramatic rise in student fees. Estimated tuition for 2010-2011 is $11,285 after the UC Board of Regents approved a 32 percent increase in November to address declining state support. UCD currently faces a budget shortfall of $113.5 million and a projected deficit of $77.7 million for 2010-2011 pending ongoing state budget talks.

The university has disputed the conclusion of the Goldwater report. In their response, the UC Davis Office of Budget and Institution Analysis (OBIA) said the institute’s methodology “resulted in a distorted view of true administrative growth.”

Using UC financial schedules from 1992-2007, the OBIA calculated that total expenditures – minus the medical center – climbed from $651 million to $1.45 billion. Spending for non-academic administrators increased from $130.8 million to $263.5 million while teaching, research and public service spending increased from $398.3 million to $983.8 million.

Chris Carter, a director and principal budget analyst of the OBIA, said the Goldwater report, in using the information from IPEDS, did not separate employees with administrative duties who supported teaching, research and public service from those with non-academic administration positions.

“The vast 73 percent of the growth over this time period … has come in these core academic areas of teaching, research and public service,” Carter said.

However, Matthew Ladner, vice president of research at the Goldwater Institute, said the claim that staff helping in teaching and research contributed to the university’s academic mission is difficult to prove. He cited the 50 percent four-year graduation rate as proof for more improvement needed.

“The point is we seriously need to rethink what exactly it is we want from our universities and what we’re willing to pay for,” Ladner said.

The response also cited the campus’ efforts in downsizing and revamping its administration. The university has already cut 342 of 4,251 positions in administrative units compared to 402 of 5,796 in academic units. Ladner noted that this was good news to hear but that it indicated there was administration to cut.

Chancellor Linda Katehi has also introduced the Organizational Excellence Initiative, a drive to streamline and consolidate administrative functions in areas like human resources, finance and information. Examples of such services include student and staff hiring and termination, time reporting and salary transactions.

These functions will be consolidated in a Shared Service Center (SSC) to be housed within Administrative and Resource Management (ARM) technology. This could save the university $9 to $16 million in administrative costs over the next two to four years, according to estimates from Scott Madden, a consultant for UC Davis.

“One of the main goals of the SSC initiative is to reduce the cost of administration and redeploy funds to support UC Davis’ mission of research, teaching and service to the community,” said Lisa Terry, the project director of the SSC in an e-mail interview.

“To that end, cost savings realized through the implementation of shared services will be redirected to academic programs, student programs and high priority administrative initiatives. Priorities set by the Chancellor and the Provost will determine the exact amount and distribution of the reallocations.”

LESLIE TSAN can be reached at campus@theaggie.org.

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