ࡱ> ]_^@ )bjbjצצ Jx!HHHHHHH\DDD8|,T\.@.B.B.B.B.B.B.$c0R2df.Hf.HH{.]]]HH@.]@.]]N)HHT, 2D4+0$-.0.+3El3`T,\\HHHH3HT,LT6],?f.f.\\D \\ EFFICIENCY EFFORTS OF THE UNIVERSITY SYSTEM OF MARYLAND Fiscal Year 2005 Reporting The overall goal is to report on initiatives that demonstrate how taxpayer or student costs are contained. Particular items are placed into one of four financial classes: cost savings, strategic reallocations, cost avoidance, and revenue. We have tried to be practical in terms of the scoring of results. Cost savings: An item is reported as cost savings only if the action represents a reduction in current operating expenses. For example, if a position is eliminated from an administrative function, it is scored. Alternatively, a salary saving associated with staff attrition turnover savings is not counted. Strategic reallocation is a management led redirection of current resources toward a campus priority or critical need. For example, management may begin the working budget process by reducing a particular function(s) to prior resource levels. The function is than challenged to live within the reduced amount. The resulting savings are directed to a priority need. Cost avoidance items are somewhat subjective. Therefore, these actions require that two conditions be met before being scored. First, is that the potential cost is for demonstrable unmet need, and second is that the need be satisfied. Therefore, an item on an institutions wish list that is avoided does not qualify as cost avoidance. On the other hand, most donated technology equipment is counted as an avoided cost to the State or to studentsthe need is apparent and the item is realized via the donation. Revenue enhancements are new funding streams. Tuition and/or fee charges are, of course, not included, while new or additional revenues related to an entrepreneurial activity are included. If additional revenue is created and used for a spending purpose, the amount falls into one of the previous categories discussed above. Introduction The Efficiency Efforts Report that is currently in place was developed in 1998 in response to the change in the States economic climate. The early part of the 90s was marked by a series of cost containment initiatives actions to reduce programs and costs to deal with the effect of the recession on State revenues. Cost containment results could be measured by the reduction in appropriations. As the economic situation improved, the measures of fiscal prudence changed and a new method to measure efficiency efforts was needed. As a result, the ϡȱ developed a methodology to report the ongoing efforts to improve overall operations, reduce and avoid costs, and increase revenue the current Efficiency Efforts Report. The Efficiency Efforts Report has emerged as a valuable tool for the System and its institutions. While efficiency efforts have always been in place in some fashion, the development of this reporting process has given the institutions a more definitive method of reporting them and sharing and obtaining ideas. The current report covers the efficiency efforts taken for the period of July 1, 2004 through June 30, 2005. General Categories of Efficiency Following our initial data collection, we attempted to group like activities within a limited number of basic categories. Institutions were then asked to identify campus initiatives that related to the specified categories using the examples from other institutions as context. With each additional year that the data is collected, more consistency is seen in the organization of the information along the categories displayed below. Each year also facilitates more cross-fertilization of ideas and processes that may serve to strengthen future initiatives. Institutions appear anxious to engage activities that are reflective of successes at other institutions. While developing last years report, the list of initiatives being reported was reviewed. As a result of this review, five new categories were added and one (pro bono services) was deleted. The current list is displayed below: Budget Reductions*Indirect Cost RecoveryBusiness Process ReengineeringIn-sourcing/outsourcingCollaboration with Academic InstitutionsMandatory ReallocationCompetitive ContractingMeeting Federal RequirementsCredit Card AvailabilityPartnership with External EntitiesDistance EducationRedefinition of Work*E&E Workgroup Focus*Space & Building EfficienciesEnergy Conservation ProgramState Supported Revenue ExpansionEntrepreneurial Initiative*Technology Initiatives*Equipment & Land Acquisitions/Donation*New category added in FY 2004 Context In 2003 a Regent Work Group for Effectiveness & Efficiency (E&E) was developed. The E&E Work Group was charged with reviewing all aspects of the academic enterprise including but not limited to privatization and or consolidation of operations, collaboration among institutions in academic offerings, technology applications, the sale of assets, maximization of federal and other grant cost recoveries, regulatory impediments, and contractual relationships with other public entities. The goals of the workgroup include: improve academic quality, maintain access, replenish the ϡȱ fund balance, implement measures for dealing with budget difficulties & publicly demonstrate efficient and effective operations. As would be expected, there will most likely be overlap between what is currently in place and the goals of the workgroup. Therefore, the goal will be to merge the current Efficiency Efforts Report with any new efficiency effort initiatives that are a result of this new workgroup. During FY 2005, the ϡȱ institutions were still experiencing the affects of the economic downturn in the State. While the ϡȱ did not receive any general fund reductions in FY 2005, except for funding for the COLA increase, they also did not receive any new general funds. Therefore, the ϡȱ had to once again absorbed the increased mandatory costs of approximately $90M as well as achieving their ongoing efficiency efforts goal. In addition to responding to the flat state funding and increased mandatory costs, the institutions were able to increase their on-going efficiency efforts by 17% from FY 2004. Results The FY 2005 report shows a significant increase in the amount reported from the previous year. This increase can be attributed in part to the actions taken in response to the flat state funding experienced by ϡȱ. As a result of the flat funding, the institutions had to increase the amount saved through efficiency efforts. Also contributing to the increase in the amount reported in FY 2005 was the expansion of the E&E Workgroup related items. In addition to the actions taken as a result of the flat funding and the expansion of the E&E Workgroup related items, the FY 2005 report does show an increase in the amount saved through on-going efficiency efforts. There was also an increase in idea sharing among the institutions. Throughout the summary, several common results can be found among the different institutions. One example is the continued efforts in the partnerships with external entities category. Partnership with external entities had a significant increase in FY 2005. More of the institutions are looking to enter into partnerships with private companies as a method of funding certain projects, with the increase in FY 2005 related primarily to public/private partnerships for student housing, and the use of grants to defray lab construction and other research related costs. With the recent reductions in general funds and the economy slow to recover, this process has become even more critical to the institutions. Also showing an increase in FY 2005 was competitive contracting. Institutions, such as UMB, UMCP, BSU, TU, UMES, UB and UMUC are continuing to show savings as a result of negotiating better contracts for Fed Ex & UPS delivery, long distance telephone services, printing services and food services along with pouring rights contracts. The majority of the institutions are still achieving savings from the energy conservation program, mainly from upgrading to more efficient systems. Three other major categories that showed an increase in the either the amount saved or in the number of institutions implementing the efficiency effort in FY 2005, were Business Process Reengineering, Mandatory Reallocation and Redefinition of Attachment A summarizes the efficiency efforts by institutions and financial class. Appendix II    &CDSTUVdegq O ] ? 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