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Editorial: Efficiency study welcome

BY DI EDITORIAL BOARD | APRIL 01, 2014 5:00 AM

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Along with the financial consulting firm Deloitte, the state Board of Regents is about to undertake its first efficiency study of the state’s public universities since the 1980s at a projected cost of about $2.5 million.

The particulars of the situation sound, on first hearing them, somewhat sinister, conjuring thoughts of third-party efficiency experts indiscriminately cutting costs without regard for the quality of public higher-education in Iowa.

In reality, though, the regents’ forthcoming efficiency study — more a consultation than an audit, it seems — will be a welcome development that could improve the performance of the University of Iowa and be a positive mechanism for holding down costs in the future.

The regents, in planning this study, have taken great pains to ensure transparency and plentiful public input and indicate that they will do the same through the execution, a promising development.

While Regent President Bruce Rastetter declined to speculate whether any kind of faculty or departmental cuts, or institutional restructuring, might occur as a result of the study, he noted that the regents’ action was not prompted by a massive need to cut costs. That means the efficiency study will likely seek more to maximize returns on the state’s investment in higher education than to find places to cut funds or programs.

Rastetter told The Daily Iowan that because the regents aren’t faced with a massive need to cut costs, “any savings will reinvested in the university [where] they found the savings.”

News of this privately contracted and rather expensive consultation has raised a number of questions from skeptics who argue that it has not been sufficiently established that the regent schools are inefficient enough to merit such an intervention from the private sector.

It will no doubt be useful to get some outside eyes on public education in Iowa after three decades to unearth what problems may exist. Whatever savings are found and realized by reducing bureaucratic inefficiency and duplication of efforts through this study will be better reallocated and better used elsewhere.

Given also that the results of this efficiency study will be public and made readily available, the taxpayers will know whether Deloitte’s findings are worthwhile and the regents will be held accountable. As it stands, projections of potential savings from the regents exceed the cost of the study many times over — it’s unlikely that the board’s crusade to identify waste will turnout to be itself a net waste.

We believe that this study is welcome largely because of the need for long-term containment of costs. According to the regents’ data, total expenditures at the regent institutions rose by $125 million per year between fiscal 2009 and 2013. At the same time, general appropriations for the regent schools fell by more than $100 million per year. To compensate for falling appropriations, the amount of revenue brought in through tuition and fees has risen by approximately $235 million per year over the same period.

With an increased reliance on tuition funds, containing costs in the long term will be necessary to keeping the financial burden on students from ballooning in the coming years. The current method by which the regents are dealing with this issue — short-term tuition freezes — are a decent Band-Aid, but more systemic solutions will eventually be required.

We are encouraged by the prospect of the regent schools making better use of their resources and more efficiently allocating their funds without making deep cuts. Any step that leads to potentially reduced costs without diminishing the quality of higher education in Iowa is welcome.


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