The Board of Regents agreed Wednesday to pay up to $1 million more toward an efficiency review of the state’s three public universities.
Regents in February hired global consulting firm Deloitte LLP at an initial cost of $2.5 million to help find cost savings and new efficiencies at the University of Iowa, Iowa State University and University of Northern Iowa.
Deloitte has completed the initial phase of the review – the stage where it names priorities and identifies administrative-related cost savings and efficiency opportunities. Regent Larry McKibben said the consultant has pared down a list of 100-some possible administrative efficiencies to one of just 14 to 18.
That list will be made public before July 1, according to the Board of Regents.
McKibben on Wednesday said he’s been impressed with Deloitte’s work and wants to maintain the consultant for a longer period of time in the fall to help identify academic-related potential savings. Original projections had Deloitte working on the project through September, and keeping them longer requires an addendum to the original contract of no more than $1 million.
“We hope to be wrapped by December and then move forward with the board approving those opportunities,” McKibben said.
The implementation phase is expected to begin in December, and McKibben said he might come back to the board at that time with a request for more money – if there are aspects that can’t be handled internally and that Deloitte is best suited to implement.
Board officials said they always expected additional costs could come with the second and third phases of the review, and McKibben said he expects a strong return on investment.
“The savings will be a significant number,” he said. “I was really surprised.”
That number will be made public later this month, along with the list of proposed efficiencies, McKibben said. But Regent Ruth Harkin she’d like to see evidence of the work Deloitte has done so far.
“This can be a little loose situation where we don’t know if we’re getting new information or old or impossible,” Harkin said. “I’m happy to hear that you are happy with the investment so far. But we should have some kind of a product for the money, it seems to me.”
The original return on investment goal was six to 10 times what the regents are spending on the efficiency review, and McKibben said he expects a return that’s even higher.
“It is my firm belief that we will exceed that number very successfully,” he said.
If, however, the Deloitte portion of the project were to end in September, McKibben said, he would anticipate significant backlash around what was promised.
“But we are being presented with some good opportunities,” he said.
Although McKibben didn’t list specific efficiency recommendations, he said Deloitte has identified possible savings in the areas of procurement, administrative operations, information technology and space utilization.
“I think we have gotten a really good product so far from this group,” he said.