Iowa regents tap consultant for cost-saving review
IOWA CITY (AP) — In what will be the largest such review in a generation, the Iowa Board of Regents hired a consulting firm Tuesday to identify ways to cut costs by making “transformational changes” to the state’s three public universities.
During a conference call, the regents voted 9-0 to hire Deloitte Consulting LLP to conduct a wide-ranging study of Iowa State University, the University of Iowa and the University of Northern Iowa. The company will find potential cost savings by proposing plans to change how the universities are structured and services are delivered, regent documents show.
The regents will ask New York-based Deloitte to review everything from demand for academic programs, to administration of athletics departments, to whether advertising dollars are well spent. Changes to staffing levels, cuts to inefficient programs, sharing services across universities and boosting revenue are all on the table.
Board President Bruce Rastetter said that a “comprehensive study that looks at every single aspect of the university” has never been done in Iowa. He said it will be even broader than a review conducted in the late 1980s, which led to programs being eliminated, millions in savings and turmoil on campuses in Ames, Cedar Falls and Iowa City.
Rastetter pledged the review would involve faculty and staff input from the beginning and be conducted “in an open and transparent way.” The universities have a unique opportunity to plan for the future given that they’re not facing financial difficulties, he said.
“We’re undertaking it when we have healthy universities that want to continue to get better, be more efficient, be true to their academic missions and keep the students’ interest in mind for future generations of Iowans,” he told reporters after the meeting. “That’s why we’re doing it.”
Regent Larry McKibben, who chairs a review committee, said Deloitte was selected out of 10 bidders because of its experience in higher education and willingness to scrutinize “both administrative and academic areas.” He said Deloitte will be able to navigate an ambitious timeline without getting bogged down.
Deloitte has worked for dozens of universities, but Iowa’s review “might have as broad a scope” as anything the company has done, McKibben said.
The regents voted to spend $2.5 million for Deloitte’s services through 2014, and will decide later whether to retain the company while plans are implemented. Rastetter said the universities expect to save six to 10 times as much as whatever is spent on consulting fees, based on similar efforts at other schools.
But Danny Homan, president of AFSCME Council 61, which represents university employees such as custodians and clerical workers, said the $2.5 million in fees would be “a terrible expenditure of money.” He said he doubted an outside consultant could come up with cuts that make sense and save money.
“I severely doubt that this is going to improve the quality of life for the kids that are attending our state institutions,” he said.
Faculty and staff leaders also are wary of the review.
University of Iowa history professor Jeff Cox said he hopes that it doesn’t lead to the elimination of academic programs such as those cut two years ago at UNI, which outraged faculty leaders.
“I hope they understand that these universities are not big corporations and that one business model doesn’t work across the board in higher education,” he said.
UI Staff Council president Randy Nessler, whose group represents 5,700 professional and scientific employees, said employees have already picked up extra duties as a result of job vacancies from previous rounds of belt-tightening, he said.
“I’m afraid that once again we’re going to have to do more with less,” he said.
Deloitte will identify a list of ways to cut costs, increase revenue and improve services, and the regents will pick options they feel have the greatest potential. The consultant will develop plans to achieve them.
The review has parallels to one completed in 1989 by Peat Marwick Main and Co. that prompted the elimination of 20 university programs. Other recommendations — including plans to close Iowa State’s journalism school and a UNI home economics program — were scrapped amid outrage.
In his autobiography, then-Board President Marvin Pomerantz recalled how the public and media “went bonkers” over the cuts. But he said the review saved money by closing inefficient programs and improved the universities’ strategic planning.