BUDGET PRUNING: How finding small areas to save money can add up.

Author:Beckwith, Sandra
Position:CAMPUS FINANE
 
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The headlines say it all.

"Texas universities forced to rrim their budgers, even with big srate curs averted."--Texas Tribune

"University of Alaska budget cur by $8 million in legislative compromise" --Alaska Dispatch News

"University of Missouri to cut 400 positions amid budger woes"--US News & World Report

"Illinois is starving stare colleges and universities"--CNN Money

Being asked to do more with less is nor new in higher education, ar either public or private institutions. And nobody knows that better than Hank Bounds, president of the University of Nebraska system. With nearly 53,000 students on four campuses, the university is faced with a recurring $49 million budget shortfall created by state funding cuts and rising costs.

At Nebraska and elsewhere, tackling the problem involves looking for ways to save in every corner of the institution. Thinking beyond painfully slashing big line items, higher ed leaders can realize significant savings in finding smaller curs that, all together, add up ro make a huge impact.

A team approach

Nebraska system officials addressed the shortfall in early 2017 by forming budget response teams for each of eight operational areas: finance, HR, IT, facilities and energy, printing, communication, procurement, and travel.

"Parts of our university operate like a business and should run like one, so that's where we started," says Bounds.

Each team got staffed by employees from that operational area. The nearly 100 volunteers placed on the project had this challenge: Identify cost-savings strategies to help meet specific financial targets for each unit--without impacting the school's affordability and academic excellence.

"I gave them one rule: There are no rules," says Bounds. "It didn't matter if they consolidated or privatized. I just wanted them to come back with recommendations that would meet their target."

And they did. All eight teams exceeded their dollar value goals.

"A real key to this was staffing the teams with people who are on the ground doing the work every day. They are in the best position to make recommendations and decisions," says Bounds.

As a result, seven months after announcing plans to identify ways to meet the budget shortfall, officials had this update: $30 million in cuts had been found and efforts to find more ways to save would continue.

Some of the savings will require departmental or functional reorganizations, such as assigning cybersecurity to one central ream. Others can be implemented more easily. For example, changing the travel mileage reimbursement rate for personal vehicle use from the federal 53.5 cents per mile to 25 cents--the actual cost to operate a university-owned vehicle--will save the university about $500,000 annually.

Bounds attributes the system's budget success to clearly communicating the situation and goals, being transparent about the impact on the institution, acknowledging that mistakes will be made and forming the right teams.

"This is a pretty tough ask of people," he says. "But when they understand the true circumstances and you communicate with them carefully along the way and request their input, they rise to the occasion."

Innovation oudook

William & Mary, the second oldest higher ed institution in America, started making campuswide cuts to improve efficiency in 2013, with the William & Mary Promise. The operating model is designed to maintain instructional quality while improving predictability in the form of a set tuition rate for the four years an in-state student attends the college.

Fueling the guaranteed rates is...

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