Initiative saves UC $157 million over past year

SAN FRANCISCO — Though student concern at the UC Board of Regents meeting Wednesday centered around ongoing increases in tuition and fees, administrative efficiency programs have saved the UC system over $157 million over the past year, according to results released at the meeting.

The Working Smarter Initiative — launched by UC administrators in July 2010 to cope with an ever-growing decline in financial support from the state — is a strategy advocated by the board to save money throughout the system without any tuition, fee hikes or employee salary cuts.

UC officials said the university will realize about $500 million for the overall fiscal budget at the end of five years if the initiative, which improves and consolidates UC administrative operations across the board, remains on track.

Nathan Brostrom, executive vice president for UC business operations, said the strategy of the initiative is to align similar services by refining the way of doing business in the UC system and to reflect on how to accelerate cost-saving and revenue-generating initiatives throughout the university.

“The university culture is always attuned to making cuts — but (the initiative is) about looking at new ways of doing this,” he said. “We have this affirmative responsibility … This is the day to put ourselves in a position to use the money for things we all want to do.”

Chair of the Board Sherry Lansing asked that program coordinators and the board continue to work together because “savings are more important now than they have ever been.”

Brostrom agreed, stating that though different perspectives exist, all UC campuses have their own version of organizational programs focused on cost-cutting — such as UC Berkeley’s Operational Excellence initiative, which aims to save the campus $75 million annually by cutting costs with the input of students, staff and faculty.

The Working Smarter Initiative is trying to avoid a legacy of handling similar functions, such as payroll, in several different ways throughout the university, said UC Chief Financial Officer Peter Taylor.

“We are trying to move to one common administrative framework,” Brostrom said. “We have 10 campuses with very different backup systems and frameworks — we are trying to get it all consolidated into one program, and it depends on business practices and data transfer.”

One initiative program that has saved a large amount of money for the university is the Statewide Energy Partnership Program, which has saved $25 million since July 2010 by financing energy-efficient projects and furthering the UC’s environmental projects.

Another program that has also generated significant cost savings is Enterprise Risk Management, which saved about $83 million by lowering the cost of insurance for a large number of risks and hazards, according to a report from the board’s Committee on Finance.

But these are just two of seven programs that have been implemented fully over the past year. Another 22 projects remain in early phases of implementation, their financial impact yet to be determined.

Though all of the university’s problems cannot be fixed through the initiative, UC Provost Lawrence Pitts said tuition increases are not the only other option and that more alternative thinking is needed to cover the rising UC costs.

“The tuition increase we recommend tomorrow will only cover 25 percent of UC increased costs next year,” Pitts said.  “We will have additional revenue strategies and additional cost cutting strategies on the table for all UCs.”