University of Minnesota criticized for bloated adminstration spending

The University of Minnesota is once again in the national spotlight for its level of administrative spending - and again saying its critics are off base.

A report by the progressive Institute for Policy Studies puts ranks U of M third among five public universities whose administrative spending most outpaced spending on students and faculty from 2005 to 2012.

It comes a year and a half after a Wall Street Journal article reported the university had highest share of administrators among its university peers.

"In our study period, we definitely saw larger-than-average bloat," said Andrew Erwin, co-author of the institute's report.

U of M officials rejected the findings in the study, calling it "extremely flawed" and based on faulty data and methodology.

"Overall, the report misrepresents the University of Minnesota, attempts to paint a very sensational picture to support IPS' thesis, and ignores the reality at our institution," university officials said in a written statement.

The report covers the 25 public universities with the highest executive pay from 2005 to 2012.

In it, the U's president is ranked 12th with an average of $670,000 in total annual compensation during that period.

The institute wanted to see how executive pay and administrative spending changed between 2005 and 2012.

It also wanted to see whether a relationship existed between rising executive pay, increased student debt and low-cost faculty.

Nationally, it found that as university presidents enjoyed higher and higher pay, students and faculty were suffering.

Spending on administration rose much faster than spending on scholarships, and student debt increased, the report states.

Meanwhile, universities began to rely more heavily on low-paid adjunct professors.

Four of the top five schools in the report are Big Ten universities - U of M, Ohio State, Penn State and the University of Michigan - though Erwin said he wasn't sure why that was the case. The other school in the top five is the University of Washington.

Writing about the U specifically, the report found:

Higher executive pay. During the period studied, the U spent more than $4.4 million on total compensation to top executives of its main campus -- or an average of $669,874 a year.

More administrative spending. The U increased per-student spending on non-academic administration more than doubled - from $2,574 to $5,790. During one two-year period - from Fiscal Year 2010 to Fiscal Year 2012 - the U increased non-academic staff 200 percent from 762 to 2,384.

Less financial aid. The U decreased per-student spending on scholarships by more than a third - from $1,424 to $914.

More adjunct faculty. And during a time when the president earned $2.1 million, the number of permanent faculty decreased 9 percent while the number of low-paid adjunct professor grew 223 percent, making then nearly half of all instructors.

Erwin said the university scored especially poorly in the area of high student debt and a growing use of adjunct faculty, but had problems "across the board."

U questions findings

As it did when faced with the Journal's report, the U is criticizing the report's data and methodology.

In a detailed report on its website, it questions the report's research methods, the data it uses and the period it covers.

U of M officials say the report sometimes uses data from the wrong source and for the wrong years. At times it compares numbers that can't be compared, because federal measuring classifications have changed over time, they said.

In one case, U of M officials say, the university's own financial-aid data contradicts the report's conclusions. They also said they can't recreate the report's claims using data from the report's listed sources.

Kaler said the researchers didn't understand the workings of the federal education-data system or information they were looking at.

"Data is complicated," he said, "and people who just take a quick look at it can not understand what the data is telling them."

Kaler also said the researchers never called to discuss what they had found.

"It's frustrating to see this data so misused," he said.

Kaler thinks the report has a left-leaning political agenda, coming as it does from a left-leaning organization and at a time when adjunct faculty are trying to unionize around the country.

When asked whether the report showed any correct general trends at the U, Kaler said he could not find any. He said he thinks state legislators - who demanded an independent analysis last year after the Journal report - will believe the university's story after it looks at the facts.

"I think a reasonable person would understand the flaws in this report," he said. "I'm counting on our legislative folks to be reasonable people."

Erwin said he stands by his report, saying he and his colleague drew conclusions from publicly available data.

"We feel confident that this is data that has been in the public record for some time now," he said. "If the university has an issue with the data that relied on, we do encourage them to present evidence to the institutions that collect this data in order to correct the record."

Kaler said that wasn't possible. Federal regulations allow changes to the data up to a year after it has been submitted, he said.

Kaler and university leaders have long said that comparing the U's administrative spending with that of other campuses using public data is fraught with peril.

Kaler said he "didn't see a lot of value" in performing its own public-data analysis because of the difficulties.

The institute's report covers only the first year of Kaler's tenure, and does not reflect the progress he has made since then - something Erwin acknowledges.

Among that progress was Kaler's ability to persuade the legislature to fund a two-year tuition freeze for undergraduates.

He has pledged to cut $90 million in administrative costs by 2019 -- something on which Kaler is ahead of schedule.

Kaler also said he has also invested in student scholarships as well as the recruitment and retention of faculty.

After the Wall Street Journal report, Kaler also commissioned a consulting firm last year to analyze the U's administration and efficiency. The U earned good marks in that report.

Erwin said back in 2012, "administrative spending was still an issue."

The question now, he said, is: "How is the university doing on reducing costs? ... It's also, 'Well, where are you placing that money now? Are you moving that money out of administrative expenditures into student scholarships and into more permanent full-time faculty?"