1 Effectiveness and Efficiency Project Report to the University System of Maryland Board of Regents

2 OVERVIEW Context of E & E Initiative Impact of on-going efforts Why an E & E “Project” E&E Workgroup & Participants What are the E & E “Academic Action Items” What are the E & E “Administrative Action Items” What is the anticipated impact What are our “next steps” Summary

3 Context Declining State Aid –FY 2000: $8,488 per student –FY 2005: $7,497 per student USM Budget cut almost 14% from FY02 level More than 5,500 additional FTE students since FY02 Each year we face $100 million in increased costs

4 Impact of on-going efforts USM Efficiency Report for FY 04: -Cost Avoidance$17.6 million -Cost Savings$10.1 million -Non-Tuition Revenue$22.9 million -Strategic Reallocation$14.9 million Total for FY 04$65.5 million Portion of budget shortfall covered by savings: 62% Portion of budget shortfall covered by tuition hikes:38% Nevertheless, on average, system-wide, tuition has increased 30%

5 Why an E & E “Project” Enrollment is projected to increase 30% over the next decade - “Baby boom echo” & “Thornton effect” Costs continue to escalate -healthcare, energy, enrollment growth, etc. Rising demands on higher education in the “knowledge economy” Need to reconcile these facts while meeting three key goals: -Quality -Capacity -Affordability

6 E&E Workgroup & Participants E & E Workgroup: Cliff Kendall, Chairman Pat FlorestanoCatherine Gira Richard Hug Marvin MandelRobert Mitchell David Nevins Robert PevensteinJim Rosapepe Collaborative effort: -Chancellor and vice chancellors -Institutional presidents, provosts, and vice presidents -Senior campus officials -Accenture’s consulting team

7 E & E “Academic Action Items” Action items developed to build capacity Faculty Workload - 10% increase in teaching loads across the USM Time to Degree - Degree programs limited to 120 credits On-line and out-of-classroom learning -12 credits completed outside traditional classroom experience Enrollment management - Maximize utilization of “comprehensive” institutions

8 E & E “Administrative Action Items” Action items developed to reduce costs and fund quality Support and Administration: -Centralization of “shared services” such as Finance and Human Resource Management Procurement -Leverage the USM’s buying power for “strategic sourcing” to drive down prices Enrollment Management Services - Streamline student services functions to eliminate unnecessary duplication Review Organizational Structure of Special Purpose Institutions

9 What is the anticipated impact Building Capacity: -Academic initiatives will enable the USM to serve an additional 2,100 students over the next three years --20% - 25% of enrollment growth --no additional cost to the State Reducing cost and funding quality: -Administrative initiatives will enable USM to free up money to investment in quality and mitigate tuition increases Fiscal impact: -Academic Action Items:$9.5 million -Administrative Action Items:$17.1 million -Estimated E&E Value FY 06$26.6 million

10 Next Steps Report contains 16 specific Action Items -Implementation will begin immediately -We expect items to be completed or substantially implemented over the next two years -Ensure accountability through an internal “scorecard” and an external “report card”

11 Summary Systemic reengineering of the academic and administrative processes -Accommodates 20 – 25 percent of projected enrollment growth over the next three years -Mitigates tuition increases -Provides for investments in quality USM has taken steps to expand capacity, promote affordability and enhance quality To fully meet the Regent’s goals, the state must reestablish higher education as a funding priority