ࡱ> @ Mfbjbjצצ F]rrrrrrrRERERE8E<E\Gc.F.F"PFPFPF-H-H-Hbbbbbbb$9eRghbrzU H"-HzUzUbrrPFPFcVVVzUrPFrPFbVzUbVVrBaTrrBbPF"F pЯREU"ab4c0GcagVRgBbrrrrgrBbP-H?LV'OT{Q-H-H-HbbD0pV0 UNIVERSITY SYSTEM OF MARYLAND OFFICE OF THE CHANCELLOR 1807 University of ϡȱ, Baltimore 1856 University of ϡȱ, College Park 1865 Bowie State University 1866 Towson University 1886 University of ϡȱ, Eastern Shore 1898 Frostburg State University 1900 Coppin University 1925 Salisbury University 1925 University of Baltimore 1925 University of ϡȱ Center for Environmental Science 1947 University of ϡȱ University College 1966 University of ϡȱ, Baltimore County 1985 University of ϡȱ Biotechnology Institute  Response to the 2005 Joint Chairmens Report Language Report on the Fiscal Effects and Implementation Strategies for Efficiency Initiatives; Report on Significant Changes in the Efficiency Plan; Report on the Study of Research Institutes Structure Language on page 180 of the 2005 Joint Chairmens Report requests that the ϡȱ (ϡȱ) submit a report on the fiscal effects and implementation strategies for efficiency initiatives as well as any significant changes in the efficiency plan. This Report summarizes the status of the Board of Regents Effectiveness & Efficiency (E&E) efforts, and conveys the Boards progress towards meeting the initial implementation goal of July 1, 2006. As the Report indicates, many efforts are underway and work continues on the items in the initial E&E Report. At the same time, as the Board indicated in the initial Report, this is an ongoing priority for the Board and ϡȱ. Items and follow-up tasks are constantly being added to further the E&E effort. It is also important to note that while several policy changes have been implemented for the upcoming academic year, the impact of those changes will not be known until the completion of this and future academic years. Language on page 183 of the Joint Chairmens Report asks ϡȱ to provide an update of the Study of Research Institutes Structure, specifically the study of the structure of the University of ϡȱ Biotechnology Institute and the University of ϡȱ Center for Environmental Science. Attached as Appendix III of this document is the Boards report on those entities, as well as the University of ϡȱ University College and the University of Baltimore. Promises Made FY 2004 The FY 2004 Legislative Report set the stage for much of the activity performed by the Board of Regents E&E Work Group in FY 2005. The report outlined the goals of the Work Group, the context in which the Work Group would operate and listed 16 action items that the Regents and the ϡȱ had identified. These action items covered numerous opportunities for achieving increases in effectiveness and efficiencies in the ϡȱ operating model. The items were all in response to the realities that the ϡȱ institutions now face; uncertain State support for higher education, a call from the Regents for increased quality, the ability to serve more students and the need to reduce the pressure on tuition. It is important to note that the Board focused on improvements that could be achieved in the near future (within two years) with the intention of continuously evaluating administrative and academic practices. Building on the FY 2004 Legislative Report In large part, the activities of the E&E Work Group over the last year built on a strong program of cost containment already in place, a fact supported by the Accenture report that was commissioned by the E&E Work Group last year to review the administrative practices of the ϡȱ institutions. The FY 2004 Efficiency Efforts Report that was provided to the General Assembly last year displayed savings, cost avoidance, entrepreneurial revenue and strategic reallocation items taken by the ϡȱ institutions. These items were related to the E&E Work Group ($12.0 million), the Ongoing ϡȱ Efficiency Efforts Program ($30.6 million) and Non Tuition & Fee revenue ($22.8 million). FY 2005 Strategies The academic and administrative reviews focused on the need to examine all of the opportunities to improve the operating model by working as a System that were offered in the Action Items. To this end the Implementation Timeline, Phase I, and the extensive narrative explanations of the Action Items formed the basis of the process as ϡȱ moved forward. The study, planning, business case development and implementation strategies were assigned to the appropriate Vice Chancellor within the System Office. The Academic Action Items, under the direction of the Vice Chancellor for Academic Affairs, were reviewed and analyzed by System staff and the provosts of the institutions. The Administration Action Items which represented the bulk of the 16 items, under the direction of the Vice Chancellor for Administration and Finance, were assigned to the Vice Presidents for Administration and Finance of the institutions for consideration and recommendations. Action Item Study and Review The study and review of the action items addressed in Phase I of the E&E Legislative Report were, in many instances, broken down into several sub items for analysis. The report on the status of E&E initiatives included as Appendix I, reconciles the status report with the list of original action items listed below (1-16). Manage enrollment to maximize capacity and reduce costs Ensure average faculty course teaching loads achieve the midpoint of the range set by the Regents Utilize academic policies to enhance capacity and reduce time to degree Maximize opportunities for online learning Streamline enrollment services Gain efficiencies through the strategic deployment of information technologies Leverage the buying power of the ϡȱ to promote procurement efficiencies Contain energy costs through cooperative purchasing Contain energy costs through demand-side energy management Evaluate and manage real property assets more effectively through strategic planning Expand effective systems of personal property disposal management Reengineer human resources administrative processes Promote economies of scale through shared services in such areas as accounts payable and travel and evaluate in-house disbursement opportunities Expand and improve technology commercialization Review the ϡȱs organizational structure Report performance FY 2005 Progress to Date The Status of E&E Initiatives Projects (Appendix I) provides a comprehensive list of the individual projects identified by the E&E Work Group. For several of these projects the analyses have been completed and implementation is underway. Others continue to be under review. As noted above, the initial E&E Report set the anticipated timeline for the projects as the end of FY 2006. It is expected that by the end of FY 2006 most (if not all) of the analysis, recommendations and implementation strategies, if appropriate, will be completed. It is important to recall that as new ideas come forward the E&E Work Group will add them to the list for study. One such initiative that was recently added to the list was the Consolidation of University Police Forces. This project has been placed on the project list and has become part of the ongoing initiatives still under review. The fiscal savings associated with E&E projects are estimated using several methods. These include: Annual efficiency reports: Since FY 1998 ϡȱ has provided an annual report to the General Assembly detailing the Systems efforts to reduce and avoid costs, identify alternative revenue sources, and reallocate resources. The FY 2005 Efficiency Efforts report, included as Appendix II, shows E&E Work Group Related actions of $17.8 million, Ongoing ϡȱ Efficiency Efforts Program actions of $30.2 million and Non Tuition & Fee Revenue actions of $28.3 million by institution. These actions were implemented in FY 2005. Budget Actions: For the second year in a row the FY 2005 budget recognized a reduction of 1% of the State-supported budget ($17.8 million) as a deduction in mandatory expenditures. The actions that are taken to balance the budget and reduce the institutional expenditures are a significant part of the annual Efficiency Efforts Report discussed above. In addition to the expenditure reduction in the budget, the institutions have again added FTES (full-time equivalent students) enrollment for FY 2005 and at several institutions improved their graduation rate, with no increase in State appropriations. The combination of the increase in total enrollments and graduation rates are critical in the effort to serve more students and increase capacity in response to the increasing enrollment demand. Regents E&E Work Group The E&E Work Group has continued to review individual projects and make recommendations to the Board of Regents. This process allows full discussion of each prospective change in policy, practices and procedure at several levels throughout the System. The project review begins at the institutional level. For example, each of the administrative projects is assigned to a group of Vice Presidents that coordinate the review of the action item. This review often incorporates several levels of expertise within the institutions. Once the review is complete the vice presidents group will make recommendations to the Vice Chancellor and other System Vice Presidents for consideration. This allows for a complete identification of the impact the recommendations will have on System institutions, faculty, staff and students before making recommendations to the E&E Work Group for their consideration. The E&E Work Group projects are designed to examine the System as a whole and to achieve the greatest degree of leverage possible. This approach is apparent in many of the projects that will be described below. FY 2005 Completed Projects Highlights This section provides an in-depth discussion of several of the projects completed in FY 2005 that are either poised for implementation or have already been implemented. Academic Issues The academic policy initiatives to maximize capacity and reduce costs, such as the increased emphasis on improving advising, are diverse and do not translate directly to immediate monetary returns. Rather they will be analyzed in terms of how many additional students will be served. The FY 2005 FTES actual was about 940 FTES (excluding UMUC) above FY 2004. This increase came about without an increase in general funds for the System and represents an efficiency of approximately $4.2 million. Please note that while the System general fund appropriation did increase by $11.9 million over FY 2004, those funds were dedicated to COLA ($10.7 million), Hagerstown ($1 million) and CSU ($100,000). None on those funds were available for enhancements in the instruction program. In addition to increasing enrollment the E&E Work Group addressed other academic issues. Faculty Workload One of those issues was Faculty Workload. The E&E Work Group reviewed and analyzed faculty workload by institution. As a result of this review the E&E Work Group established a goal, to be implemented in the fall of 2005 (FY 2006), that each institution brings its faculty workload to the mid-point of the workload ranges established in Board Policy. Academic Policies Another of the academic issues of great interest to the E&E Work Group was the development of strategies to reduce time to degree for baccalaureate degree-seeking students at ϡȱ institutions in order to increase the throughput and serve increased numbers of citizens who seek access to public higher education. Over the past year, three new policies were developed by the Academic Affairs Office in consultation with the chief academic officers and faculty representatives, and, upon the recommendation of the Chancellor and the Boards Committee on Education Policy, were approved by the Board of Regents in February 2005. Those policies, which become effective this academic year (FY2006), are: ϡȱ Policy on the Admission of First-Time Freshmen in the Spring Semester - This policy recognizes that, from time to time, highly qualified students who have applied for but cannot be granted fall semester admission to a ϡȱ institution because of limited campus capacity may be offered admission as first-time students in the spring semester. It mandates that institutions strongly encourage those students admitted as first-time students in the spring semester to earn at least 12 credits applicable to their proposed undergraduate degree program in the fall semester immediately prior to their matriculation, and suggests that students be encouraged to take such coursework at University of ϡȱ University College or a ϡȱ community college. ϡȱ Policy On Alternative Means Of Earning Academic Degree Credit - This policy is designed to encourage students to take advantage of alternative means of earning academic degree credit, including through online courses; registration in special sessions; independent study or undergraduate research; study abroad; service learning; internships; credit by exam; and advanced placement credits. The policy approved by the Board stipulates that, on average, first-time freshmen will complete at least 12 credits required for graduation outside of the traditional classroom experience as part of their undergraduate programs. ϡȱ Policy On Standard Credit Requirements For Baccalaureate Degree Programs - Finally, the Board passed a policy that recognizes that one factor in extending student enrollment beyond four years is the existence of baccalaureate degree programs that require more than 120 credits. The new policy stipulates that the standard number of credits required for receipt of a baccalaureate degree from a ϡȱ institution shall be 120 and provides a limited number of exceptions for those programs that are designed as five year programs or must meet externally mandated accreditation or certification requirements that would demand additional coursework by students. Organizational Review In June 2004, Chairman Cliff Kendall appointed and chaired a workgroup consisting of Regents Pat Florestano, Robert Pevenstein, Tom Finan, and David Nevins. The purpose of the workgroup was to review the organizational structure of the ϡȱs four special purpose institutions. These institutions are the University of ϡȱ University College (UMUC), the University of Baltimore (UB), the University of ϡȱ Biotechnology Institute (UMBI), and the University of ϡȱ Center for Environmental Science (UMCES). These institutions are considered special purpose because each has characteristics that make it significantly different from a traditional degree granting university. The Final Report to the Board of Regents presented by the Chancellor on June 22, 2005, including his recommendations to the Board of Regents, is included in Appendix III. Online Education Strategic Plans Each ϡȱ institution completed a strategic plan for online education. The next step in the process will be the ϡȱ Strategic Plan and implementation strategies beginning in FY 2006. Campus Utilization In FY 2005 the E&E Work Group completed a campus utilization survey. This issue is an ongoing concern for the Work Group. In FY 2006 the ϡȱ is working with the ϡȱ Higher Education Commission (MHEC), the Department of Legislative Services (DLS) and the Department of Budget and Management (DBM) to improve efficiencies in utilization and standardize the methodology for measuring usage. New Microsoft agreement A new Microsoft procurement for the licensing of Microsoft products was completed in FY 2005. This procurement includes MS Office, Core CAL., Windows OS upgrades, MS Office FrontPage, and MS Visual Studio.NET Professional. It is estimated that savings for ϡȱ over a five year period is $5 million. New PeopleSoft agreement A new Platinum Support Agreement for PeopleSoft products was renegotiated in FY 2005 that resulted in a reduction of anticipated maintenance costs for the ϡȱ of at least $7 million over the next ten years. In addition to the maintenance cost reductions, under this new agreement, ϡȱ acquired licenses for all higher education related software that had not been purchased under the initial procurement. System-wide Electricity contract As a result of the administrative action item related to energy two System-wide energy committees were created. The first was to identify the System-wide needs for electricity consumption that could be captured in a single procurement initiative leveraging the Systems buying power. The negotiations were concluded in the Spring of 2005 and a contract was awarded effective July 1, 2005. Based on recent market fluctuations the pricing so far has proved favorable. Within two years all ϡȱ institutions will be on the same consumption schedule resulting, we believe, in improved positioning in the market place at that time. The fiscal savings related to the electrical aggregation was indicated by our consultants estimate as worth 10-15% or about $5 million. The market has moved up steadily since the contract was awarded. Though the market could go down at any time, right now ϡȱ estimates it is 10-20% above where it was when we signed this contract. FY 2005 Financial Summary FY 2005 estimated savings Although the annual Efficiency Efforts Report (Appendix II) shows a consolidated total savings for FY 2005, there are two initiatives that make up this report. The first initiative is the 1% reduction in expenditures for the ϡȱ State-supported budget. The Chancellor and the Board of Regents have required that ϡȱ institutions reduce their mandatory expenditures and identify savings within their institutions. This action reduces the pressure on tuition revenue needed to balance the budget. The impact on ϡȱ as a whole is $17.8 million (slightly higher than the 1% goal), equivalent to approximately an additional 2-3% increase in tuition. The second initiative for FY 2005 is the continued requirement to improve administrative activities aimed at avoiding costs, increasing revenue from sources other than tuition to support the State-supported budget, and other activities that are addressed in the FY 2005 annual Efficiency Efforts Report included as Appendix II. This report identifies $30.2 million in the Ongoing ϡȱ Efficiency Efforts Program and $28.3 million in Non Tuition & Fee Related Revenue over the 1% savings already discussed. These two items above are supplemented by the enrollment increases achieved in FY 2005 without additional general funds. The value associated with the FY 2005 FTES increase of 940 (excluding UMUC) is $4.2 million. Next Steps FY 2006 Continuation of the Phase I Action Item Implementation Timeline Consolidate the annual Efficiencies Effort Report with the E&E savings report The Annual Efficiency Efforts Report which has been in existence since FY 1998 will be combined with the E&E status report and fiscal estimate detail to provide a comprehensive report that covers all aspects of the ϡȱs activities related to cost savings. FY 2006 Implementations State-supported budget E & E target of $17.1 million For the second year in a row the State-supported mandatory increases associated with the institutions were reduced by 1%. In effect this forces the institutions to find ways to reduce budgeted expenditures to balance the budget. The specific actions taken to balance the budget through cost savings or avoidance will be included in the FY 2006 annual Efficiency Efforts Report. Gas Consortium A second workgroup examined the feasibility of aggregating natural gas purchases System-wide. It was determined that this would be feasible and most cost effective starting on July 1, 2006. An RFP is now being developed by the workgroup to achieve this goal by the July 1, 2006 deadline. Energy Conservation A third System-wide workgroup was created to identify energy conservation measures that would result in attractive returns. This workgroup has determined that lighting will be the first area addressed. Representatives from all ϡȱ institutions are currently evaluating test installations of a variety of the latest lighting technology in classrooms, hallways, rest rooms, offices and other spaces. The best lighting technology will be selected and implemented on a System-wide basis. This workgroup will also examine opportunities in the HVAC area, and will establish System-wide design standards to be used in all new construction. These standards will assure that new buildings are constructed utilizing the best available energy conservation technology. ϡȱ Online Education Strategic Plan - Each degree granting ϡȱ institution has a plan for enhancing online teaching and learning appropriate to its mission. Institutions will be individually implementing their proposed plan. Most started the implementation process last spring. The primary focus for academic year 2005-06 of ϡȱ online learning activities will include complementing institutional plans for faculty development with ϡȱ-wide activities. These will take the form of workshops related to effective pedagogy in an electronic medium, communication among institutions of more specific training activities where faculty from one institution can take advantage of training at another, and creation of discipline specific faculty learning communities related to online teaching. Similarly, there will be activities related to transfer of knowledge among the ϡȱ institutions regarding student readiness for online learning. Finally, there will be some coordination of educating the ϡȱ community regarding the issues related to copyright in online teaching and learning. Implementation of academic policy changes The new academic policies described above will be implemented in FY 2006 (fall of 2005). The impact of these policies as well as other academic initiatives aimed at reducing time to degree will be felt for several years to come as ϡȱ serves more students through increases in both enrollments and graduation rates. Campus Utilization This in an ongoing initiative to improve usage and standardize metrics of measurement with ϡȱ, MHEC, DBM and DLS. IT Initiatives There are several Information Technology E&E initiatives that will continue to move forward for review and recommendations for implementation. They include: Voice Over IP for several institutions, Security, Disaster Recovery Solutions and Training programs to name a few. Shared Services A group of vice presidents has considered the legal constraints associated with a shared services model. The System is developing a business case for a possible shared services model for certain administrative services. A group of institutional experts for each process (e.g. accounts payable processing, payroll) will identify the issues, constraints, and requirements associated with a single processing point used by multiple institutions. The associated benefits of such an arrangement will be considered and quantified. This set of issues, constraints, and requirements will be considered in the context of the potential benefits and discussed with institutional vice presidents to assess interest. The System expects this next phase of the project to be completed by June 30, 2006. Accountability The E&E Work Group has created a sub-group to address System-wide and institutional indicators that will assure institutions are moving in the direction indicated by Board of Regents policies and recommendations. Scorecard Public Sector Value report card It is anticipated that, at a minimum, the E&E Project Savings will be about $3 million in FY 2006 for projects that will save $17 million over several years for the electricity procurement and the Microsoft and PeopleSoft agreements.  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