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President Kaler responds to press allegations of U of M ‘bloat’

Kaler cites poor year-to-year comparisons and the context of increased research grants requiring administration among factors that should inform data interpretation.

"It is frustrating to focus on tuition without mentioning the just stunning decline of state support."
MinnPost photo by John Noltner

Just after Christmas the Grinch paid a visit to University of Minnesota President Eric Kaler. On the last Friday of the year, the Wall Street Journal carried a front-page story singling out the university as the nation’s worst example of “administrative bloat.”

For Kaler, the timing couldn’t have been worse. The state Legislature is set to begin crafting the budget for the next biennium within days. The U of M is asking for an increase in state funding in exchange for a series of accountability commitments, including a tuition freeze.

The Journal story, however, could easily be read as justification for the state funding cuts the institution, viewed by some lawmakers as a fiscal sinkhole, has sustained in recent years.

Between 2001 and 2011, the piece reported, the U of M added 1,000 administrators. During the same time period, tuition and fees for in-state students more than doubled to $13,524 a year, some $5,000 more than the average at four-year public colleges.

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The story acknowledged at the outset that Kaler vowed to ferret out waste and redundancy when he took office 18 months ago, but went on to lay out a case that the president and some other members of Minnesota’s higher-ed sector assert is miscast.

Adding insult to injury, the Washington Post followed up with a commentary — reprinted in the Star Tribune — that insinuated the U of M administration was complacently fattening itself with student and taxpayer dollars.  

MinnPost asked Kaler to share his views on the ensuing controversy; an edited version of that conversation follows. But first, a little background is necessary to understand why he feels the Journal report missed the mark.

The U.S. Department of Education collects reams of statistics from colleges and universities, including data on hiring and spending. The paper’s analysis was based in large part on these statistics. But the agency’s reporting guidelines are so poor the numbers don’t compare apples to apples.

They do not, for example, spell out who is an administrator. That decision is left to the person completing the report. As a result, administrative head counts can fluctuate by hundreds of bodies from one report to another.

Ironically, Kaler attempted to explain this wrinkle in a presentation he delivered last fall to the Board of Regents illustrating how his administration is overhauling the way costs are tracked. The fifth page is a chart created using the relevant database.

MinnPost: Let’s talk about the Wall Street Journal, the Washington Post and the ensuing chatter.

Eric Kaler: I thought The Wall Street Journal piece was challenging. The reporter was here for a while, and I think got a fair view of the university but had a real hard time collapsing it into a 2,000-word article. So the bits and pieces that are some of the comparisons are challenging. Some start in different years than others, etc.

He also obviously wanted to make a story highlighting things that he thought would sell newspapers, and didn’t provide the context of the university around what was in the article.

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So for example, you talk about increasing administrative hires. You’ve got to put that in the context of a 40 percent increase in our research grants and contracts over the last five years, 9,000 more students than in 2000, etc. etc. And you know he just didn’t seem to have space to provide that kind of balance. He needed to find the facts.

I think The Washington Post story was just — I’m trying to think of a polite word. It didn’t seem to be very well thought out, and I’ve written a letter to the Post and the Star Tribune. [His letter has since been published in both the Star Tribune and the Post.] I mean, characterizing UMore Park as a vast housing development, it’s just silly. He just didn’t do his homework.

MP: What do you think the Journal got right?

EK: Boy, that’s a good question. He at least pointed out that we think comparisons between institutions is very difficult. He then attempted to do some analysis of our data, which we’re looking into, let me say.

The inner comparison of data really is terrible. The data we report to the feds, the categories that describe administrative personnel, are interpreted very differently by different institutions. So you will see institutions that have wild year-to-year variations in the number of employees in those categories, presumably based on who filled the form out. He did get that right.

But it is frustrating to focus on tuition without mentioning the just stunning decline of state support. [The story] says in the beginning that based on the flow of state dollars this hiring took place. Well, there was no flow at the University of Minnesota. I mean we’re receiving $140 million to $150 million less than three years ago. It’s a stunning disinvestment, and that’s what’s driven tuition. It’s frustrating when instead of addressing that, we talk about administrative costs, which certainly we’re working every day to reduce.

You know we’re focused on minimizing any tuition increase that we ask for from students and families, but good grief.

MP: I wonder if this must rankle particularly because you came in with a stated mission of ferreting out redundancy and inefficiencies.

EK: It really does because we’ve made really good progress, but it’s only the start of a long journey. This change doesn’t come either easily or quickly, and we’re doing a lot.

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The move to Google — we’re the first university to do that. This [saves] about $15 million in IT costs. Closing the system administration office, closing the bursar’s office — $2.2 million. We had the lowest tuition rate increase last year in 12 years of 3.5 percent. The centerpiece of our [budget] proposal for the state is a tuition freeze. So yes, I would’ve liked to have gotten a little more credit for that rather than reading about what happened before I got here.

MP: Can you return to the 40 percent increase in research and say why that might drive administrative hiring?

EK: Because when you get a research grant, you hire people to do the work. If we get a $50 million grant from the National Institutes of Health for the Clinical and Translational Science Institute, which we did, it requires us to hire people to manage that grant process. The regulations associated particularly with human and animal [research] subjects are just really almost unbelievable, and you need people to manage that, to help so the scientists aren’t spending all their time managing that.

And you expect to see growth in those kind of positions as you grow your research. We do so much that’s beyond classroom teaching. We have the land-grant mission of extension and the research and outreach centers across the state. We have clinical responsibilities. We have research responsibilities and so people who aren’t associated with the teaching mission are hired to do those kinds of missions.

I think also you’ve got to look at the student success. Our graduation rate has improved by two-thirds over the past 15 years or so, and that’s because not only of classroom instruction but having advisers and career counselors who can help students move expeditiously and appropriately through our curriculum. Those are people in student services who are classified as administrators and are very directly helping student outcomes.

Really, talking about the importance of the research mission of the university can’t be overestimated. The return on investment for the university is 13:1 for every state dollar that we get. As an economic engine for Minnesota, it’s an important institution. We’re dedicated to minimizing tuition increases, and we’re dedicated to moving the place to be as efficient and effective as it can be, and we’re making progress on those goals.

MP: The Wall Street Journal Piece noted that when you took office, you went looking for answers about spending and the system wasn’t set up to deliver them.

EK: We’ve been working on that steadily since I got here, and we reported to the Board of Regents at their last meeting, or the one before, how we can now track the cost of supporting the mission and administering effective leadership for the institution. That’s now very clear, and now we can keep an eye on it.

And again — I don’t mean to be critical about this — that’s because the way the system was set up 10 or 15 years ago; it wasn’t a priority for any institution to be able to answer questions like this. And we’re very decentralized. There wasn’t an institution-wide roll-up of that kind of data. And now there needs to be.

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MP: If I were in your shoes with the Legislature poised to open, I’d be concerned about my budget proposal.

EK: I think we’ll have to have more conversations. The Legislature has already signaled that they want to look at our budget in more detail, and I’m proud to show them. If you look at what we’ve taken out of our operations already and with fund cuts that President [Bob] Bruininks made, too, there’s a good story to be seen there.

I think it’s very important for us to tell the story and have people listen and not read a 2,000-word article that’s hither and yon or the snipey piece out of the Washington Post.