Expenses of Higher Education in Montana

[Editor's Note: The following summary was included in the report on "The Study of the Administrative Structure and Expenses of Higher Education in Montana" (1993) by MGT of America, Inc., Olympia, WA.]

Executive Summary

This study is a review of the administrative structure of the Montana University System (MUS) and an analysis of the growth and costs of administration. As its title indicates, it includes a review of the structure of the system as well as the specific units and activities which create or result in costs. In this area, the study examines the interrelationship of the units and overall issues which are within its scope.

The recommendations contained in this study are those which the study team feels will improve the operation of the system (including areas where administration needs to be strengthened), improve efficiency, explore the potential for use of telecommunications in administrative operations, and which will result in long or short term administrative cost reductions. In view of the current budget problems facing the State of Montana and the university system, it is important to point out that the study does not attempt to do a number of things, including:

In addition, the study report does not address items or issues outside its scope even though they might have a potential for cost reductions. That is a matter more appropriately addressed in other studies.

Administrative Structure

Although Montana's constitution and statutes envision the MUS as a single university, the units within the "system" have traditionally functioned more like a loose confederation. Each institution has evolved relatively independently over time. This historical independence has contributed to a lack of common administrative systems and a poorly defined role for the Office of the Commissioner. Until the issue of control and governance is resolved, the ability to find true and long term solutions to administrative issues will be difficult and parochial interests will likely continue to affect the development of the system. We endorse the recommendation of the Commissioner [Hutchinson] that the Board direct the Office of the Commissioner to prepare a plan for significant structural change that "will enhance delivery of post-secondary educational services in Montana" to be presented to the Board by October 1, 1993. In this context, we have suggested an approach which focuses on functional consolidation of services and a sharpening of the role of the Office of the Commissioner.

Costs of Administration

In regard to the costs of administration, we believe that our findings dispel the notion that these costs have grown disproportionately over the past several years. In fact, based on our analysis, administrative costs expressed in constant 1987 dollars have increased only slightly (less than one percent) while student FTE enrollment has grown approximately five percent. In addition to reviewing changes over time, we examined the relationship of the MUS to national and peer institution data. Although making some suggestions for improving the peer data, we found that expenditures for administrative budget programs were below national or peer averages. The only exception was the Student Services program where the higher than average expenditures (in the four-year units) were due to support for intercollegiate athletics.

It is our conclusion that the size and costs of administration in the MUS have not changed disproportionately to enrollment growth and are below most peer institutions and national averages. The breadth and depth of our analysis make this conclusion compelling.

As part of our study, we visited every institution in the MUS and met with more than 125 individuals to learn about programs and the status of operations and workload. In addition to our interviews, we sought to observe the general operating environment and conditions on each campus. Site visits were conducted in December and January, prior to completing our review of the peer data. Thus, visits were conducted without prejudice regarding the status of the size and/or costs of administration in MUS institutions. Our findings from the site visits confirmed subsequent peer review conclusions that, overall, MUS units are conservatively staffed. In our opinion, there is very little "fat" to trim. Therefore, although our analyses have identified some positions which may not be needed, there is no gold mine of administrative savings which can be tapped without significant impact on services.

Opportunities for Potential Savings

In the report, we discuss where we believe the greatest potential savings opportunities exist. These include:


Overall we have found the Montana University System to be one which has the opportunity to improve its long term functioning in an environment of limited resources by developing common systems, sharing resources, making greater use of telecommunications, and taking advantage of its unique opportunity to incorporate technical education into the system. At the same time, while there are short term savings which can be made, the administrative costs of the MUS are reasonable, have shown little constant dollar growth over the last several years, and compare favorably to peer institutions and national averages. As we note above, we have found no "gold mine" of administrative savings which can be tapped without reductions in services.

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