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UM System produces significant savings through efficiency and effectiveness measures

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Christian Basi

December 10, 2015

Value of the UM System reflected in system-wide initiatives producing savings of at least $29 million in past year

ST. LOUIS – The University of Missouri System realized at least $29 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 Board of Curators meeting at the University of Missouri-St. Louis.

“The value and importance of a strong UM System has never been more evident than when considering our ability to identify continued cost savings and revenue enhancements for our four campuses each year,” said University of Missouri System Interim President Michael Middleton. “The efforts of the UM System not only demonstrate our commitment to utilize well the resources that are invested in us, but also illustrate 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.”

The $29 million in savings in FY 2015 means that the UM System, through its efficiency and effectiveness measures, has now saved more than $77 million over the past two years. These savings through efficiency and effectiveness also make it possible for the UM System campuses to spend 75.5 percent of its operations budget on the core activities of teaching, research and service, compared to the UM System’s peer institutions across the nation, which devote an average of 70.4 percent to such core activities.

Of the at least $29 million in savings realized through cost reductions and cost management activities during FY 2015, the largest amount - $20 million – came from procurement efficiencies, including the renegotiating of contracts and leveraging the value analysis program. Additional savings came in the areas of credits for geothermal ($7 million), operating costs for geothermal ($1 million) and scholarships ($1 million).

Other efficiencies adopted by the UM System in the past year will be producing additional savings in the future. The university’s Intercampus Course Sharing initiative has increased course options for students, allowing students access to specialty faculty across the four campuses, with 67 shared courses offered to date; the university’s moving of its audit services from an outside firm to an internal function is providing additional coverage, access to internal consulting, increased partnership between audit and management and a presence on all four campuses; and Finance System Process improvements that have been implemented have reduced modifications by 58%, including elimination of more than 100,000 paper vouchers and electronic storage of 155,893 forms in the financial system. 

Cost savings and efficiencies 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.

“Our yearly report of substantial, increased savings is another significant example of how the UM System is an excellent steward of the public resources entrusted to us,” Middleton said. “Without the centralized services provided by the system, for example, the overall cost of having each of our campuses and the health system take over those functions now provided by the UM System such as Information Systems and Payroll would be more than double. We will continue to keep our focus targeted on utilizing public resources prudently through the identification of additional efficiencies and effectiveness measures.”