Consultants: UNC spends too much on administrators

Chapel Hill, N.C. — The University of North Carolina at Chapel Hill has been spending more on administrative costs than academic expenses in recent years, a global consultant group said in a report released Wednesday.

Bain & Company has been helping university officials look for ways to streamline operations and be more effective. The group was paid by an anonymous donor.

The report found the university’s administrative expenses per student have grown faster than academic expenses.

UNC Chancellor Holden Thorp said the increase could have been driven by the university’s increase in research funding, which requires staff, and a boom in construction financed by higher education bonds.

The school’s complex organizational structure was also cited as a potential problem in the 100-plus page report.

The university was found to have 10 layers of management with more than 50 percent of supervisors managing three or fewer people. This situation could result in a substantial bureaucracy and leave leadership too filtered from what is really going on, the report stated.

The university has 11,700 permanent employees spread across 400 departments. The group recommends the university create new policies to prevent adding new administrative layers. Restructuring is also recommended to help reduce the number of layers currently in place.

Changes in the administrative organizational structure could save the university up to $12 million annually, the report said.

“It’s really shown us that we can be a whole lot more effective in the way we do things,” Thorp said. “We have some problems and I think those problems are ones that you would find in any large organization.”

Bain & Company used budget idea emails, data analysis and research and campus interviews to compile the report. Consultants will present the full report to the Board of Trustees this week.

The group also recommends the 100 centers and institutes at the university make changes to streamline their reporting structure and share support services, like human resources and finance.

“This fall we will enter the detailed solution design phase. That phase will involve assigning initiative champions to work with people across the university to build implementation plans,” Thorp said.

Bain & Company will return sometime in 2010 to do a free analysis of the university’s progress, Thorp said.