$7 million study will seek savings in UC chief's office
San Francisco Chronicle 4/24/07
It's part of an effort to save money in the university's financial and administrative operations and shift those savings to other needs, such as increasing salaries, reducing class sizes and improving facilities, said UC Regents Chairman Richard Blum.
The new study -- which did not need approval from the Board of Regents because it is below a $10 million threshold requiring a board vote -- will be paid for by a loan from the university's endowment.
It's the first study of its kind since 1958 and will take about a year.
Dynes and Blum sent a letter to the 10 UC campus chancellors Monday telling them about the study to be conducted by the Monitor Group, a management consulting firm in Cambridge, Mass. The contract totals $6.9 million plus expenses. Work will begin immediately.
"The nature of this engagement will not be to write the stereotypical 'consulting report' but to actually implement sensible operating changes -- improving the quality and effectiveness of our administrative processes while also achieving cost savings at the same time," Dynes and Blum wrote in the letter.
The first part of the study will look at how responsibilities are divided among the 10 campuses, Dynes' office in Oakland and the regents, and what their roles should be. The project will also look for ways to save money by eliminating duplication and operating more efficiently -- possibly by centralizing some of the purchasing of goods and services that is now done campus by campus.
The president's administrative office includes 516 full-time positions and an $81 million annual budget. There are a variety of other academic and systemwide-administered programs that are based at UC headquarters in Oakland but are not considered part of core administration, such as research programs and Education Abroad with 1,286 positions and a budget of $288 million, said UC spokesman Brad Hayward.
The bulk of the $6.9 million contract will be spent on developing possible organizational changes to carry out the cost savings and other findings.
Dynes' office and how it runs have come under scrutiny in the wake of revelations by The Chronicle that UC officials violated university policies in awarding hidden compensation and special perks to some top executives, sometimes without telling the public or regents. The hidden compensation, which involved millions of dollars, was handed out at the same time students saw their tuition skyrocket and student services cut. Last year Dynes admitted to regents and state legislators that there was a culture in his office of "trying to get away with as much as possible and disclose as little as possible."
Hayward said that the state Legislature directed UC last year to review its organizational structure in the wake of the scandal.
The news of the contract came as a surprise to Bill Shiebler, president of the UC Student Association, who was in Sacramento on Monday with other students, lobbying legislators to provide funding to buy out the 7 percent fee increase approved by the UC regents in March.
The UC Board of Regents voted to raise student fees in part to address a crisis in student mental health services. But the $4.6 million boost in funding in next year's budget is just a fraction of the approximately $40 million needed to meet the growing needs of students with depression and more serious psychiatric problems, as well as plain old homesickness.
"UC has its priorities dead wrong. ...This message (from UC) that there is just not enough money and that it is just a bad budget year is nonsense," Shiebler said. "It is outrageous and frustrating that they keep funding these extravagant anecdotal projects when they won't make a commitment to UC affordability and access for students."
Blum said that the review is long overdue and that he would not be behind the project if he didn't think it would pay for itself many times over.
"The university has grown very quickly. It is, in my view, a bureaucracy that hasn't had a hard look at its policies and procedures. I am convinced it can be run more efficiently," Blum said. "Nobody has really taken a hard look at trying to take some hard costs out of the system."
Former Assemblywoman Carol Liu, who was among the legislators who called for an organizational review of UC, said she was pleased to see UC starting the project.
"This effort has great potential to enhance the operations of the university, improve transparency and create a structure in which roles are clearer and the different levels of the organization understand each other and work together as effectively as possible."