Regents will move forward with efficiency review ‘on our own’

IOWA CITY - Deloitte Consulting has been advising the Board of Regents on making improvements to the public universities' efficiency practices since March.

However, if the firm wants to be involved in the implementation of its recommendations, it will have to bid – just like any other consulting firm.

'I would anticipate that Deloitte would definitely bid, along with a number of other firms,” Mark Braun, transformation project manager for the Transparent Inclusive Efficiency Review, said Friday during a special meeting.

Board members during Friday's meeting unanimously agreed to move forward with another eight efficiency opportunities identified by Deloitte relating to administrative operations at University of Iowa, Iowa State University, and University of Northern Iowa.

Those eight opportunities - in the areas of information technology, finance, human resources, and facilities - could save tens of millions of dollars and cut more than 250 jobs across the three campuses, according to board documents.

The board's decision Friday brings the total number of efficiency opportunities it's pursuing to 12, and Braun said the campuses could begin to see some efficiency savings as early as the next business year. Board President Bruce Rastetter said that money could support a proposed third-straight tuition freeze for undergraduate resident students - not to mention a freeze for out-of-state and graduate student tuition, which board members also are considering.

'Those early savings fit in perfectly with the tuition freeze the board discussed at its last meeting,” Rastetter said.

As for potential job losses resulting from the eight efficiency opportunities approved Friday, Rastetter said it's too soon to say how many will be eliminated through attrition and whether early retirement might be offered on the campuses.

'We would entertain a variety of recommendations as implementation begins on these,” he said.

Academic review

Deloitte was chosen in March from among 10 firms that applied to conduct the first and second phases of the board's efficiency review - which included data collection and identification of potential efficiencies.

The plan was to pay the global consulting firm $3.3 million to review administrative operations on the campuses and hire subcontractors to review academic operations. But the academic portion of the study was stalled following faculty concerns it was moving too quickly, and that created a scheduling conflict with one of Deloitte's subcontractors, KH Consulting Group, forcing that firm to exit the project.

Deloitte has been trying to replace KH to complete the academic portion of the review, but the Board of Regents on Friday said it can do that without Deloitte.

'Now that Deloitte has concluded its work on phase one and two, we will move forward with the academic review on our own,” said Regent Larry McKibben.

KH was handling three of the five academic-related efficiency opportunities, and the board is planning to request proposals from consultants to complete that work.

'Having the board issue the RFP rather than subcontract through Deloitte will allow faculty leadership at the universities to play a greater role in the selection process,” McKibben said.

The other two academic opportunities are being handled by consulting firm Ad Astra, and the board will draw up a new 'professional services agreement” to allow that firm to continue its work on the project apart from Deloitte.

By contracting with Ad Astra and taking over the search for a KH replacement, the board essentially ends its work with Deloitte, which to date has billed the universities $3.1 million for its work. The board presumably will spend the balance of the $3.3 million contract on payments to Ad Astra and the KH replacement.

'I am very pleased with the work Deloitte has done,” McKibben said. 'The status quo is unsustainable, and Deloitte has made that clear to us.”

Implementation

The board in August unanimously agreed to use Deloitte to implement its suggestions for improving sourcing and procurement practices but, after months of negotiations, the two sides couldn't reach a deal.

The board on Friday agreed to seek bids from additional firms to implement the sourcing and procurement suggestions. It also will request bids to implement recommendations to go to a shared service model in the areas of finance, human resources, and information technology.

The rest of the 12 opportunities likely will be tackled in-house, meaning the universities will have the chance to develop internal plans on how to move forward with the suggestions. Those plans will be due by the end of the calendar year.

As for the efficiency opportunities requiring outside help, officials on Friday said they hope to issue the requests for proposals by Nov. 21, receive proposals by Dec. 12, hear presentations from finalists the first week of January and make a selection by the end of that week.

Ideally, contracts will be in place and implementation will begin by Feb. 1.