Above is the main message of Howard Bunsis, the university finance analyst hired by the University of Minnesota chapter of the American Association of University Professors to check out the financial health of the U.
Bunsis, a lawyer and Eastern Michigan University professor of accounting, has analyzed about a dozen other universities, though the U is apparently his biggest case.
(Note: Bunsis is also an AAUP officer, so one may wish to consider the source.)
Compelling presentation nonetheless, with another side conclusion: The furloughs and pay cuts recently instituted at the U were not financially necessary. They were merely a political gesture to show that the U was sharing in the state budget pain.
After the presentation, I asked Richard Pfutzenreuter, the U’s finance chief, for his thoughts.
He repeatedly sidestepped the question of whether Bunsis’ thought on the furloughs was true, saying he would not “second-guess” the decisions of former President Bob Bruininks, who’d proposed the austerity measures.
Pfutzenreuter did take issue with, among other things, Bunsis’ assertions that administrative costs were rising disproportionately. He said Bunsis inflated those numbers by including in “administration costs” things such as libraries and advisers that are indirectly tied to instruction.
Pfutzenreuter told me:
“He’s using the number the way he wants to use them. I would use them differently.”
(I’m no university finance expert, so will not get into the weeds on this one. I plan on posting the full presentation, so you can see whether you agree.)
He could not explain why the U had higher institutional support costs compared to its peers and yet lower instructional spending as well. (I assume Bunsis was using the same classification system for all the universities.)
Pfutzenreuter did say, however, that a team is being set up that will define exactly what an administrative cost is at the U. He told me:
“I’m extremely tired of the confusion.”
(Eric Kaler, the new president, pledged at his inauguration to cut administrative costs every year.)
Pfutzenreuter said he wishes Bunsis had called him to get information about the way the U handles finances.
Below is his final slide, “Aspirations,” or where the U should go from here.