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U of Minn. president to cut admin. costs

Published 1:21pm Saturday, September 14, 2013

MINNEAPOLIS — University of Minnesota President Eric Kaler announced plans Friday to cut administrative costs by $90 million over the next six years.

Kalar told the Board of Regents he wants to cut $15 million a year, starting this year. The money would be used for non-administrative activities and to curb the increased cost of attendance for students.

The $15 million each year represents more than 1.2 percent of the university’s administrative budget.

“That is an ambitious … but achievable goal,” Kaler said. “My hope is to underpromise and overdeliver.”

The cuts come after the Wall Street Journal in December singled out the University of Minnesota for inflating its ranks of administrators, saying that the school had gone “on a spending spree over the past decade.”

But a consulting firm found the university is not particularly top-heavy with administrators.

An analysis by Sibson Consulting concluded the university is “well within” reasonable levels of administration.

“Indeed, for the size of institution of the University of Minnesota, the number of layers is remarkably low,” the consultants said in a report released Friday. Overall, they said, the university “appears to have an economical organizational structure.”

However, Kaler acknowledged that many feel “that we employ far too many administrators.”

Two outside studies done earlier this year will help university officials decide how to streamline.

Richard Pfutzenreuter, the university’s chief financial officer, said the university needs to centralize a lot of its services, be shrewder in how it buys supplies and equipment, and cut paperwork through computerization.

Pfutzenreuter said Friday that university officials hope to reduce personnel through attrition, but couldn’t rule out layoffs. He said he wasn’t sure yet how many people could be laid off.

After the Wall Street Journal article appeared, Minnesota legislators demanded last winter that the university submit reports on its administrative spending and analyze how it compares to other big research universities.

Pfutzenreuter said Kaler had made plans to cut administrative costs long before the article appeared.

In a separate, internal report released Thursday, university officials said the salaries of its senior leaders are at or below the level of their peers at other schools.

University officials say the school has reduced administrative costs by $32 million a year over the last couple of years.