University to address deficit
As a part of efforts to reduce the University's $6.5 million deficit, as announced at the last faculty meeting on Nov. 7 by faculty representative to the Board of Trustees Prof. Faith Smith (AAAS), the University plans to save one million dollars in procurement for fiscal year 2014.
According to Senior Vice President for Finance and Chief Financial Officer Marianne Cwalina, the University has made some specific investments in fiscal year 2014 to improve academic and student services. "Historically, deficit spending has been the norm along with a greater draw on the endowment to support operations. The new senior leadership team has been working diligently to reduce and eventually eliminate the deficit," she wrote in an email to the Justice.
Cwalina wrote that the strategic procurement staff has been reorganized under a new director and is currently working to identify preferred vendors that will cost the University less in supplies, services and contracts. All costs are currently under review and prices for services are being assessed in order to achieve more than one million dollars in procurement savings, she wrote. According to Cwalina, the University plans to save about five million dollars in procurement over the next few years, in areas including utilities, facilities services and supplies. Cwalina wrote that a majority of the savings would be seen in waste management, print, travel, facilities services and lab services, among other areas.
Cwalina wrote that the science departments could see further reductions in spending for lab supplies and services but only relative to lower cost negotiated with vendors. She also wrote that facilities will see budget reductions, again, relative to negotiated contracts for snow removal, waste management and other facility services.
According to Dean of Arts and Sciences Susan Birren in an email to the Justice, "[s]trategic procurement is just having agreements with vendors that leverage the buying power of the [U]niversity to get better prices for the items we purchase anyway."
Therefore, Birren wrote, students should not see any difference in the supplies used in courses or available to them, "as we will be purchasing the same supplies and equipment but saving money through strategic procurement agreements." Birren wrote that these agreements actually "have the potential to help faculty in the sciences manage their grants and increase money available for their research, including research involving undergraduates."
The savings and decreases in spending, according to Cwalina, will not be across-the-board, but will rather come "as we pinpoint vendor savings in specific departments as procurement identifies better rates and services."
According to Director of Strategic Procurement John Storti in an email to the Justice, the strategic sourcing model is "based upon demand management and creating strategic partnerships with key suppliers in order to leverage the University's spend[ing] as a whole as opposed to decentralized spending."
"As the Procurement staff continues to bid out services, we anticipate seeing continued annual savings to help defray the deficit. Supplies that affect all departments will see reductions in their budgets," Cwalina wrote.
When asked if procurement savings would affect employment or administrative, faculty or facilities services salaries, Cwalina wrote that "the University is currently examining our business processes to see where we can adopt best practices that bring us in line with the higher education community.
"Like other universities and colleges, our competitors, we are looking at their administrative practices. In reviewing our own, we want to implement practices that will not only get the job done but will also permit us to conserve resources for our strategic goals," Cwalina wrote.
Storti could not comment on specific areas for which the University has established savings by press time. Senior Vice President for Administration Mark Collins could not be reached for comment by press time.