Effectiveness and Efficiency Project Expected to
Yield Estimated $26.6 Million in Additional Savings
Plan seeks to maintain quality, increase enrollment capacity
SALISBURY, Md.(October 22, 2004) - The University System of Maryland (USM) today announced its Effectiveness and Efficiency (E&E) Project, actions that will result in an estimated $26.6 million in savings by June 30, 2006, and potentially an additional $50 million two years later. The savings will be redirected to help the system maintain nationally eminent academic, research, and service programs; accommodate more students; and moderate tuition increases. USM Chancellor William E. Kirwan outlined the initiative at the USM Board of Regents meeting held this morning at Salisbury University.
The E&E Project will enable the system to accommodate an additional 2,100 full-time-equivalent students (FTEs) during the next three years, at no additional cost to the state, by:
- moving undergraduate students through their academic programs in a more timely manner;
- increasing faculty course load system-wide, and;
- making fuller use of facilities, administrative collaboration among institutions, and technological competencies.
E&E builds on the success of the system's ongoing cost-containment program. In FY 2004 alone, that program yielded $65 million in cost savings or avoidance, reallocation of funds, and entrepreneurial revenue.
"In this time of burgeoning enrollment demand and diminished state support, the University System of Maryland must fundamentally change the way it operates in order to protect quality, expand capacity, and moderate tuition increases," said USM Chancellor William E. Kirwan. "That is the objective of the Effectiveness and Efficiency Project. By making systemic changes in the way we serve our increasing student population, both academically and administratively, we are doing our part to ensure that USM continues to serve the state with an exceptional system of higher education."
Kirwan also said: "It is vitally important that the state renew its commitment to higher education so that future generations of students are assured of the opportunity for a high quality, affordable college degree."
The Maryland Higher Education Commission has projected that enrollment at USM institutions will grow from 95,845 FTEs this year to 103,856 FTEs by FY 2008, an increase of more than
8,000. Since FY 2002, the state general funds portion of the USM budget has decreased 14 percent or $120 million, mandatory costs have increased $100 million, and student enrollment has increased by more than 5,000 full-time-equivalent students.
Also during his presentation at Friday's meeting, Chancellor Kirwan emphasized the value of the system structure. "It would have been impossible to develop this initiative without the collaboration and the will of the constituent institutions to implement collective change, and without the system's single governing board," he said.
Clifford Kendall, chair of the USM Board of Regents, launched the E&E Project in June 2003 to optimize the use of system resources. During the past 15 months, the Regents' E&E group has worked closely with Chancellor Kirwan, the institutional presidents, provosts, vice presidents, and administrative staff to conduct a thorough review of USM operations. The members of the Regents' E&E Work Group are: Chairman Kendall; David Nevins, board vice chair; and board members Patricia Florestano, Richard E. Hug, the Honorable Marvin Mandel, Robert Mitchell, Robert Pevenstein, and the Honorable James Rosapepe.
As part of the review, the system engaged the services of Accenture, an international consulting firm, in May 2004 to develop recommendations to reduce operating costs and identify alternative revenue sources.
"I am pleased with the results of our 15-month review," said Chairman Kendall. "I think this process has resulted in a system-wide recognition of the need to reposition USM for success in a very challenging environment.
"Moreover, implementation of the E&E action items will reassure students, their families, and state policymakers that an investment in the University System of Maryland is a wise investment and, that the system is spending its resources prudently to provide affordable access to excellent USM institutions."
The report on the E&E Project outlines action items totaling an estimated $26.6 million for redirection. Following is the list of initiatives.
Manage student enrollment system-wide so that the major growth occurs at the system's comprehensive institutions rather than the higher-tuition research institutions (University of Maryland, Baltimore County; University of Maryland, College Park). This will help the system meet enrollment demand at a lower cost per student system-wide.
- Move faculty course loads to the midpoint of the Board of Regents' prescribed range (7-8 courses per year for comprehensive institutions; 5-6 for research institutions).
- Move students through their academic programs in a more timely manner and expand the capacity of classroom space by developing policies that: limit undergraduate degree requirements to 120 credits (except in cases where requirements for accreditation, double majors, and other circumstances mandate otherwise); provide a financial disincentive for completing an excessive number of credits beyond degree requirements; enhance student
advising systems; require institutions to ensure that, on average, students complete at least 12 credits required for graduation outside of the traditional classroom experience; eliminate low-productive programs; and maximize academic facility use.
Streamline enrollment services system-wide.
- Develop a system-wide strategy to encourage more online learning.
- Deploy IT services more strategically.
- Leverage the system's combined buying power to reduce costs of some goods and services.
- Pursue cooperative purchasing to reduce energy costs.
- Save money by reducing energy consumption and implementing strategies for more cost-effective energy management.
- Develop real-property strategic plans for short- and long-term development needs.
- Expand effective ways to dispose of personal property so that institutions recover the residual value of surplus personal property.
- Promote institutional collaboration on employee training and development.
- Promote economies of scale through shared services in travel, accounts payable, and other transaction processing.
- Improve technology commercialization through increased R&D funding and moving intellectual property into commercial ventures.
- Undertake an organizational review of the system and develop recommendations regarding the most effective and efficient structure.
- Report on performance and savings achieved through E&E and other initiatives.
Implementation of the Effectiveness and Efficiency initiatives is expected to begin immediately. A complete copy of the E&E report is available on the University System of Maryland's Web site at: /jcr/index.html.
Contact: Anne Moultrie