Aligning Campus Resources
In these sessions, attendees heard how to incorporate integrated planning, financial modeling, performance measurement, and other innovative strategies into their institutions.
Data to the Rescue
Many institutions facing budget difficulties are considering comprehensive reviews of academic portfolios and administrative units to identify potential cuts-a process that can take a year to complete, at best. National Louis University had three months.
Christine Quinn, NLU provost, and Marty Mickey, vice president of finance, shared their experiences in the concurrent session "90 Days to Rightsizing and Realigning Resources." Quinn and Mickey knew that across-the-board cuts were not an option, so they gathered faculty and staff into three task forces: academic portfolio prioritization, administrative unit prioritization, and communications. A steering committee—the president, provost, vice president of finance, and human resources director—oversaw the process.
The academic portfolio task force reviewed every program with data centered on student demand, program resources and outputs, outcomes, revenue and expenditure profiles, and opportunities for growth and efficiency. After ranking and weighing the different metrics, each program was placed into a quartile: eliminate, reengineer, maintain, or enhance.
Similarly, the administrative unit task force conducted a data-informed examination of all administrative units, looking at strategic importance, internal demand, external demand, and cost analysis, among others. The communications team sent weekly, honest updates on the process.
After ranking the programs and units, the committee chairs met with budget heads to discuss the results, the budget heads integrated recommendations into their detailed budgets, and the finance department presented the budgets to the board.
The result? Although budgets were reduced 15 percent, the 2012–13 year-end bottom line indicated a $1.2 million surplus. The project further reinforced the culture of shared governance and transparency, and increased awareness of the university's financial condition.
While this was a data-informed process, Quinn reminded attendees that "it is not just about the data. It's about the people you're taking on this journey, as well."
Financing Online Education
Emerging from a new information-sharing partnership between NACUBO and the University Professional and Continuing Education Association (UPCEA), the concurrent session "Evolving Business Models of Online Education" offered insight into the structure and trends in distance education.
A portion of the session focused on the results of a recent UPCEA benchmarking survey, in which approximately 300 UPCEA members participated. The survey found that about 36 percent of all continuing education students are taking courses online and slightly more than half of those online enrollments are undergraduate. Half the schools charge different tuition rates for online courses (compared to on-campus courses), but the majority of schools do not assess different rates for in-state online students and out-of-state online students.
Institutions invest $8,000 to $12,000 on average to develop an online course, but there is much variation in the responses. For many institutions, the cost of online course development includes a $2,000 to $4,000 average stipend given to faculty members to develop the course. Organizationally, 62 percent of online units report to the continuing education unit, while 23 percent report directly to the provost.
Nearly a third of institutions offering distance education return all revenue to central administration, while only 15 percent keep all revenue within the distance education unit. The survey found that a typical institution has 10 to 18 full-time-equivalent employees supporting online education.
Staying Ahead of the Crumbling Campus
In the concurrent session "Budgets, Buildings, and Balance Sheets," two institutions provided insight on how they approached deferred maintenance on their campuses, after two panelists provided nationwide data to set the stage.
David Kadamus, president of Sightlines LLC, shared several interesting data points related to the age of campus facilities. In 2012, 42 percent of campus space at public institutions was 25 to 50 years old, and 18 percent was over 50 years old. At independent institutions, only 29 percent of the space was 25 to 50 years old, though 27 percent was over 50 years old.
Kadamus noted that both public and independent institutions cut capital investment in existing space after 2009, though independent institutions recovered more quickly. Now, as Lee White of GK Baum explained, public institutions have an average capital spending backlog of $79 per square foot, while independent intuitions have a slightly lower backlog of $76.
David Hanson of Virginia Commonwealth University explained how his institution's enrollment has continued to grow at a rate above the growth in square footage. One of VCU's key strategies is increasing the use of public-private partnerships in building multiuse facilities.
Craig Woody of the University of Denver then walked through the process of identifying spending backlogs, creating funding plans, and tracking performance related to the plan. Key to the DU strategy was replacing old space by building new, to eliminate deferred maintenance. Woody reported that over the last 17 years, the average age of the square footage on campus has decreased by eight years. Further, 83 percent of the total square footage of campus is either new or subject to major renovation.
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