The Emory University Senate discussed unmanaged cost growth at universities across the nation yesterday during the fourth part of its five-part lecture series focusing on finances at higher education institutions.
The discussion, part of the ongoing "Shaping Emory's Future: Challenges and Opportunities in the 21st Century" series, was led by Jeff Denneen ('05C), the head of America's Higher Education practice for Bain & Company. Denneen has been brought in by universities such as Cornell and U.C. Berkeley to analyze administrative finances and identify ways to save money.
"The purpose of this talk was to look specifically at administrative costs because as Jeff showed, administrative costs over the past number of years have risen faster than say other costs of the University," said Gray Crouse, the president of the University Senate
Denneen focused on statistics and information regarding rising costs, administrative trends and finances at U.S. universities.
He presented various statistics regarding financial trends and the managerial complexities that universities across the country face. Denneen explained that one third of universities in the U.S. are trending in the wrong direction.
"A lot universities that are out there are struggling financially," said Denneen.
Denneen also emphasized that during the last 10 years, the proportion of university finances in the United States allocated to administrators and support staff has increased, and the amount of funds allocated to instruction has decreased.
Denneen spent a significant portion of the discussion talking about how universities will often spend a significant amount of money on things that do not create value for the university. He gave the example of an unnamed university that contemplated spending $80 million on a turbine system. Denneen explained that a new dormitory or classroom building would have created more overall value for that university.
Following the lecture, the audience engaged in a question-and-answer session with Denneen, in which he addressed topics ranging from the financial issues that come with adopting either Mac or PC computers on campus to roles of university administrators.
Steven L'Hernault, professor and chair of the Biology Department, said he attended the lecture to learn about possible financial changes at Emory moving forward.
"This was the most remarkable meeting of this type that I have ever attended," L'Hernault said. "It was a very clearheaded view of administrative bloat and bureaucratic tangledness that describes the kind of situation that exists in American universities."
Denneen said in an interview with the Wheel that though he does not know all of the details about how Emory is doing financially, the points he addressed during his presentation are applicable to a broad range of large research universities. He added that Emory has taken some positive steps such as the establishment of a business process improvement team.
"Emory should be encouraged that senior leadership is thinking about [finances] in the right way and putting some resources in place to deal with it," Denneen said.
In the first place, Crouse asked Denneen to give the lecture because of his history as both an Emory alum and the head of Bain & Company.
"He knows us, he values Emory," Crouse said. "He has almost the unique perspective on administrative costs and what is driving them and what one can do to lower them."
The next and final lecture in the series entitled, "Financial Aid: Moral Imperative, Competitive Tool, or Unsustainable Burden?" will be held on Mar. 5 at 4:00 p.m. in the Jones room in Woodruff Library.
– By Dustin Slade
