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University to apprise curators of nearly $132 million in efficiency, effectiveness measures

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University to apprise curators of nearly $132 million in efficiency, effectiveness measures achieved in 2011

Posted February 1, 2012

UM’s administration, institutional support expenses 21 percent lower than national average of U.S. public doctoral universities

In a report to the board of curators scheduled for Feb. 2, university officials will describe nearly $132 million in administrative efficiencies and operating effectiveness measures realized by the University of Missouri System in 2011. Since 2009, these measures have accounted for about $222 million that the university has used to optimize its core mission of teaching students.

“We have been steadfast in our commitment to be responsible stewards of university assets and resources,” said Nikki Krawitz, vice president of finance and administration. “We have been doing more with less for years, with the ultimate beneficiaries being our students and the citizens of our state.”

The University of Missouri’s institutional support expenditures—which include general administrative services, executive management, legal and fiscal operations, public relations, development, and central operations for the physical plant—were 21 percent less than the national average of public doctoral universities. In addition, while institutional support expenditures nationally declined 4 percent from 2008 to 2010, the University’s expenditures declined by 9 percent. 

This data is based on an analysis of national statistics collected by the Integrated Postsecondary Education Data System.

As part of keeping institutional support expenditures low, the university saved  approximately $75.2 million last year by reducing, eliminating and deferring costs, including savings from competitive contracting and other procurement activities; operating expense reductions from business process redesign; more efficient use of technology; cuts in services; energy conservation; and workforce reductions.

Revenue enhancements contributed $53 million of the $132 million total and came primarily from net tuition and fees, a new administrative fee on gifts and endowments, indirect costs related to grants and contracts, entrepreneurial activities such as research parks and incubators, and other miscellaneous income.

These cost-savings and revenue generators have directly benefited students in particular, Krawitz said. Tuition at the University of Missouri System’s four campuses is less than the national public doctoral university average and significantly below the national private doctoral university average.

“We continue to be a great value for students and their families,” Krawitz said. “As the state’s land-grant, public research institution, we provide students access to a quality education surrounded by top-notch professors and world-class research.”

Krawitz noted that these efficiencies have been realized even as the university has added more than 17,000 students in the past decade and increased institutional financial aid by about 80 percent. These increases, when coupled with state support that is less than it was in 2001, mean the university is currently educating nearly 40 percent more students with a quarter fewer resources. It also has foregone facility maintenance and repair to meet growing challenges, now resulting in a backlog of approximately $1.27 billion.

At the same time the university has increased its efficiencies, Krawitz said it also has focused on its effectiveness. It has increased student access and enrollment while improving degree completion and graduation rates.

In addition, the university now garners $398 million in sponsored research funding a year; provides more than $60 million annually in unreimbursed health care; offers a broad scope of Extension services, including free disaster relief; and creates more new jobs through economic development.

“There is no question we are doing much, much more with less,” Krawitz said.  “But after more than a decade of carefully managing and reducing our costs, we’re at a point where most of those significant savings opportunities and cost avoidances are few and far between. With the current proposed state funding reductions, we will need to make much more difficult decisions on personnel, which is our largest budget line, to ensure we maintain our ability to provide a quality education.”

document iconEffectiveness and Efficiency Accountability Report FY 2011 (PDF 48 KB)

Reviewed 2012-05-29