One year following the College's announcement that it would cut $100 million from its fiscal years 2011 and 2012 budget, administrators are still in the process of developing "innovative" ways to reduce costs while improving efficiency, Executive Vice President Steven Kadish said in an interview with The Dartmouth.
"As we started to work through the concepts, in a few cases the savings were greater, and in a few cases the savings did not materialize," he said. "The vast majority of the savings were very close to what we had originally predicted."
Kadish said he would give the College a "B or B+" on its efforts thus far to save money, attributing the grade to the College's inability to meet its original budget reduction goal of $100 million. The College has achieved 85 percent of its intended reductions to date, according to Kadish.
Some of the original goals for reducing costs were "not realistic," Kadish said.
One of the most significant changes brought about by the budget-inspired administrative restructuring is the creation of financial centers that centralize the financial and human resource decision-making processes for various departments, Kadish said.
"It is taking certain decisions we make in financial and human resource matters and putting them in a locus of expertise in a new group of staff that moved from different parts of Dartmouth into a new center," he said.
Two financial centers have been created the Administrative Financial Center and the Tuck and Thayer Financial Center. Both have service-level agreements, which will maximize the efficiency of the Centers through a designated fixed speed of transaction, according to Kadish. The Centers have not provided the financial savings expected, however, Kadish said.
"They're doing some fantastic work in terms of how we do these basic transactions," Kadish said. "They've improved service so things happen faster, and they've saved some money, but not as much as we'd thought."
Before restructuring, each administrative department handled issues such as financial reports and hiring internally, according to Kadish. Because the departments handled these tasks only occasionally, they never had the opportunity to develop efficiency and expertise, he said.
The original budget reductions included plans to revise the College's purchasing procedures, an initiative that was realized through the creation of customer procurement teams. The teams include experts in customer procurement who are responsible for purchasing a wide variety of items for the College at the lowest possible cost.
"These guys are finding tons of money tons," Kadish said. "They're finding really innovative ways to re-bid and get what Dartmouth needs at the same or better quality."
The layoffs that resulted from the budget cuts were an unfortunate necessity, Kadish said.
"We felt that we did a lot did everything we could to prevent layoffs," he said.
Most of the student reaction to the money-saving initiatives has focused on staff layoffs, although in reality the cuts to health benefits caused the greatest impact on members of the staff, Kadish said. The changes did not affect the employees making the least amount of money, according to Kadish.
Dartmouth's former health plan covered 80 percent of employee's health costs on average and used a sliding scale in which the lowest paid employees contributed the least to their own health care. The changes to the plan increased deductibles and co-pays for employees, who became responsible for paying an increased percentage of their health costs under the new plan, Kadish said.
The cost-cutting measures also targeted financial aid by requiring student loans for families whose income exceeds $75,000 a year, The Dartmouth previously reported.
