News: CJ Exclusives

Study Highlights Administrative Bloat at Leading N.C. Universities

Wake Forest led nation in boosting administration spending from 1993-2007

RALEIGH — A study released Aug. 17 by the Phoenix-based Goldwater Institute shows a steep rise in the number of administrative employees relative to the size of faculty and student enrollment at 198 of America’s leading public and private universities.

Between 1993 and 2007, the number of full-time administrators per 100 students increased by 39.3 percent, while the number of full-time teaching, research, and service employees grew by just 17.6 percent. At roughly 14.5 percent, student enrollment grew even less over that period.

Inflation-adjusted spending on administration per student increased 61.2 percent, much faster than the 39.3 percent increase in inflation-adjusted spending on instruction per student. (Download a PDF of the study here.)

Study data were drawn from the Integrated Postsecondary Education Data System (IPEDS). Researchers Jay Greene, Brian Kisida, and Jonathan Mills focused on the 198 leading U.S. universities that IPEDS identified as four-year colleges that both award doctorates and conduct high or very high levels of research. Study data included “all state flagship public universities as well as elite private institutions,” the authors said.

Wake Forest leads the pack

Wake Forest University led the nation in “administrative bloat,” with a startling 369.7 percent increase in the number of administrative positions, versus the average rate of 39.3 percent. Wake Forest also saw a large jump in the number of teaching, research, and service staff (238.7 percent) per 100 students. Student enrollment grew 21.8 percent.

Wake Forest also was ranked first for percentage increase in university spending on administration per student, with a whopping 663.0 increase. At the same time, instructional spending per student declined 33.4, while research and service spending per student increased 36.7 percent.

Of the six North Carolina institutions in the study, the next highest ranked in administrative bloat was North Carolina State University, with an increase of 61.4 percent in administrative positions per 100 students versus a 4.6 percent increase in teaching, research, and service employees. Student enrollment grew 14.4 percent.

For percentage increase in university spending on administration per student, N.C. State was ranked near the bottom third of the 198 universities, and second lowest among the N.C. institutions, with an increase of 32.9 percent. University spending on instruction per student increased 23.1 percent and spending on research and service increased 8.6 percent.

Duke University, on the other hand, ranked in the bottom quarter among the 198 universities and lowest among the N.C. universities regarding percentage increase in administrative employment per 100 students. Administrative positions grew 14.8 percent, while instructional, research, and service positions grew 11.6 percent. The percentage of total full-time employees per 100 students declined 21.8, in large part from reductions in clerical and other staff. Student enrollment climbed 20.5 percent.

For percentage increase in university spending on administration per student, Duke University ranked near the top of the 198 institutions and second among the N.C. institutions. University spending on instruction per student increased 118.3 percent and spending on research and service increased 93.7 percent.

In contrast, the report shows that the University of Michigan was one of only a handful of universities that reduced the number of administrators (5.5 percent), while increasing the number of full-time instructional, research, and service staff (68 percent). Inflation-adjusted spending on administration per student at UM also increased by a modest 7.5 percent, while instructional spending rose by 29.2 percent.

Unlike institutions with the largest increases in administrative bloat, UM had declining government subsidies and “that financial independence from the state seems to be moving the university in the right direction,” explained the authors.

Noteworthy is that the average rate of increase in administration from 1993 to 2007 and the rate of increase in instruction, research, and service personnel were roughly similar (40.1 percent and 39.8 percent, respectively) for private universities. In contrast, public universities boosted administrative four times faster than other staff — 39.9 percent and 9.8 percent, respectively.

Investing in “paper pushers”

Increased government subsidies do not reduce costs to students, the authors said, noting that inflation-adjusted tuition rose by 66.7 percent from 1993 to 2007. Nor have higher subsidies improved instructional quality because “both instructional employment and spending increases have trailed administrative increases.”

Rather than becoming more efficient, the authors explained that many of these universities achieved “diseconomies of scale” because they required 13.1 percent more employees in 2007 to educate the same number of students than they employed in 1993.

Kisida, one of the study’s co-authors, told Carolina Journal that students would be served better if “more power were placed into the hands of consumers to find the best deal. Since institutions receive most of their funding from government, private gifts, and fees for non-educational services, universities have little incentive to economize.”

“North Carolinians talk about higher education as a great investment, but this report shows that universities are putting too much money into administration instead of teaching and research,” said George Leef, director of research for the John William Pope Center for Higher Education Policy, “and that’s not a good return on investment.”

“It was a shocking report, especially for Wake Forest,” said Thomas Taylor, professor emeritus of accountancy at Wake Forest University’s Calloway School of Business and Accounting, “and I really can’t explain it, except to say that parents and students seem to expect new services.”

Both Leef and Taylor said many universities continue adding services, many of which already are being provided by companies in the private sector. For example, Taylor mentioned a story in the Aug. 15 Winston-Salem Journal discussing new substance abuse services at Wake Forest. WFU is hiring the school’s first substance abuse counselor and will be building new social venues on campus.

“Accountability is lacking,” Leef added. As the Goldwater Institute study suggests, as long as students are shielded from paying for the rise in administrative costs, university leaders have little incentive to re-examine their priorities.

The report did not address directly administrative bloat in for-profit versus nonprofit universities. Leef said it also would be instructive to compare the salaries of administrator and faculty, since data from other sources show that administrators at most of the institutions in the Goldwater Institute study earn much more than faculty members. Another area to explore is whether there’s a significant difference in administrative costs, per-student spending, or faculty costs between small private liberal arts institutions that have low endowments and offer modest faculty pay versus well-funded institutions like Duke.

Karen McMahan is a contributor to Carolina Journal.