System-wide initiatives lead to savings of at least $48 million in past year
ST. LOUIS – The University of Missouri System realized at least $48 million in savings in the past year due to increased effectiveness and efficiencies, according to a report released today by the UM System. These cost savings can be used for core mission areas and strategic priorities, helping to keep the cost of education affordable and a college degree attainable for Missourians. The release of the report came during the first day of the University of Missouri’s Board of Curators meeting at the University of Missouri – St. Louis.
“We have always prided ourselves on being good stewards of public resources, and in our ability to identify continued cost savings and revenue enhancements each year,” said University of Missouri System President Tim Wolfe. “Not only does this demonstrate our commitment to utilize well the resources that are invested in us, but also illustrates our continued effort to rethink normal business processes, seek new revenue streams and continually think about how to deliver our mission in the most effective and efficient ways.”
Of the at least $48 million in savings realized through cost reductions and cost management activities during FY 2014, the largest amount - $26.1 million – came from the refinancing and restructuring of existing debt. The funds will now be used for additional campus strategic capital investment, while sound management of the general pool enabled the issuance of a first-time $9.6 million dividend for FY2014.
Other prominent savings included the UM System Supply Chain implementing a physician-driven value analysis program to evaluate the use of medical and surgical supplies within the University Health System, which achieved a savings of $9.3 million during FY2014. The university’s adoption of an electronic Personnel Action Form (ePAF), which streamlined the outdated paper-based form for personnel actions such as hiring, promoting and transferring employees, streamlined the approval process while reducing processing time and saved the university $2.5 million in annual operating costs during FY2014.
Other efficiencies adopted by the UM System in the past year will be producing additional savings in the future. The university’s Total Rewards Task Force made recommendations to improve the UM System’s employee benefit plans to address rising costs, leading to the university’s commitment to maintain the current benefit rate for the next three years, which is expected to create savings of $9 million in 2015, $18 million in 2016 and $27 million in 2017. And the establishment of an Accounts Payable Shared Services Center, consolidating accounts payable creating a single point of contact for vendors for payment questions, is expected to provide $100,000’s of annual cost savings to the system going forward.
Cost savings for the university have come about during a time of tremendous growth, with enrollment at the four campuses of the system up by more than 40% since 2001. Total enrollment of more than 77,000 students is the highest in the history of the UM System.
“We will continue to always look for ways to be more efficient in our processes and effective in the meeting of our core mission of teaching, research, service and economic development,” Wolfe said. “Our strategic planning process, which is our blueprint for everything we do as a university system, will continue to be our guide toward utilizing public resources prudently through the identification of additional efficiencies and effectiveness measures.”