Those following University of Alaska news since this summer know that questions about the structure of the UA system have been at the forefront as the board of regents anticipates handling a $70 million cut in state funds over the next three years.
On Oct. 28, a legislative town hall meeting was held in Anchorage to explore this question. I presented evidence in support of restructuring options that reduce administrative costs, starting at the UA statewide system office. My evidence included a review of expenditures at UA’s peer systems.
The next day Dermot Cole offered some criticisms of my presentation in a blog post. He wrote: “Joel Potter, a UAA philosophy professor, said that centralized administrative costs are higher at UA than at other ‘peer’ institutions and that decentralized administration should be cheaper. Missing from his presentation was any allowance for the relatively high number of centralized services at the University of Alaska and the higher level of grants and contracts, two factors that make a direct comparison impossible with the 36 other institutions he included.”
I expect that many share Mr. Cole’s skepticism. Centralization seems to be the default solution for many people, including UA President Jim Johnsen, many members of the UA Board of Regents, numerous Republicans and Democrats in the Legislature, Mr. Cole and Gov. Dunleavy (strange bedfellows, indeed!).
I actually did measure centralization of services in my presentation by means of centralization of administrative expenditures, and I actually found there to be a link between greater centralization and higher administrative costs per student in university systems. As for the costs of managing grants and contracts, UA’s higher level of grants and contracts are mostly for research. I found no correlation between research expenditures in university systems and the administrative costs of system offices. (Access my full document with notes and raw data at bit.ly/33DKIq8.)
Tasked with reviewing and evaluating UA’s system office in 2015, the Statewide Transformation Team issued a report that identifies a problematic “command and control style” at the statewide office and recommends that the unit transition many existing operations to the universities to be run using a shared service model. A November addendum to the report reaffirms the original findings:
"Comparison with peer state university systems across the country reveals that UA Statewide is an outlier in terms of structure, function and staffing levels. Since the Great Recession, starting in 2008, system offices across the country, from Maine to Oregon, have been transformed to achieve both a greater focus on core mission and to realize efficiencies."
Since the report was issued, UA administrative operations have become even more concentrated at the system office, with plans to centralize additional operations in the works. The command-and-control style has become only more pronounced.
The regents should be questioning this approach. They should be asking for financials detailing expenditures for the past five years at the statewide office. They should be asking how much of UAF’s land grant resources annually go to support the statewide office and how much money has been spent each year on consulting services (over $1.7 million in fiscal 2018 alone). They should be asking why the centralization of human resources is slated to save less than half of what the board was told in July. And they should be considering whether it is appropriate for the Statewide Office of Public Affairs to use $495,000 in unrestricted donations to the UA Foundation. That the board is not asking these questions is symptomatic of a deeper problem: the centralization of power within the UA system.
Fortunately, the board of regents will be meeting through today to address this very issue. The UA Faculty Alliance has passed a resolution, endorsed by United Academics and all three faculty senate bodies, that proposes sensible changes to board of regents policy, delineating the authority of the system president and the university chancellors. These changes would help to appropriately distribute authority through the system.
Unfortunately, I think we can expect to see resistance to any change in policy that delimits the powers of the system president. Arguments offered to maintain the status quo will likely conflate the “centralized authority” reflected in current board policy with the “final authority” of the board of regents (and the board’s executive officer) described in the Alaska Constitution and existing statute.
Currently, the system president has the power to issue gag orders to the chancellors, stifling the flow of good information to the board. There is no legal barrier to correcting such imbalances in power. Until the necessary changes are made to board policy, genuine reform in administrative costs is unlikely to occur.
Joel Potter is assistant professor of philosophy at the University of Alaska Anchorage.