UVa Eyes Potential Cost Savings

by James A. Bacon

The Ryan administration defended its record of cost cutting Friday during a presentation to the Board of Visitors and pointed to an ongoing Operational Efficiency and Effectiveness Study as a source of savings in the future.

The study, which commenced in September, has focused on five objectives, Chief Operating Officer J.J. Davis told the Board:

•  Maximize scalability and efficiency
• Unlock the power of technology
• Reduce manual work
• Minimize duplication
• Align activities to mission

So far, said Davis, three major themes have emerged: people and organization; optimization and scale; and technology as an enabler. Over the next six months, in the words of her presentation slide deck, the study will conduct a “deeper examination of opportunities warranting further analysis.” She will report back to the Board in June.

The study comes at a time when some board members have been agitating for a greater emphasis on cost control as an alternative to raising tuition. The implementation of new enterprise software, Workday, should make it easier to conduct rigorous financial analysis across many different dimensions.

The presentation about the study was exceedingly vague, so it’s not clear what potentially might be on the chopping block. 

Davis specifically identified better space utilization, reduction of manual labor and the use of “strategic sourcing” — negotiating better terms from vendors — as sources of cost savings. President Jim Ryan also mentioned the potential to rein in construction costs by doing a better job of defining building designs in the early stages of a project.

It does not appear that the study will address deep structural issues. There was no mention of mission creep and the growth of administrative overhead. There was no discussion of faculty productivity. There was no hint that UVa might reallocate resources from departments with declining student enrollment to departments with growing student interest. In other words, it seems unlikely that the study will generate proposals that require taking on powerful internal constituencies.

To the contrary, Davis explicitly said that the study will seek to identify “low hanging fruit” — savings that can be quickly and easily implemented. (That statement did not preclude the possibility that the study might identify more substantive savings down the road.)

“We’ve done a lot,” said Davis referring to hiring freezes and budget cuts implemented during the COVID-19 pandemic. “We’ve tightened our belts significantly.” Competitive pressures are driving up wages and salaries, but UVa has managed to hold the increase in tuition & fees below the rate of inflation over the past few years, she added. 

“We’ve taken a very careful look at every school,” scrutinizing line items to squeeze out costs, said Provost Ian Baucom.

Also, it was noted, investments in renewable energy (solar and geothermal) have held down energy costs. “We’ve grown our physical plant but our energy costs have not grown [commensurately],” Davis said.

As time and resources permit, The Jefferson Council will endeavor to evaluate these claims.