BCG Report: Universities Want More Advocacy, Less Accountability

A study of the UNC System’s administration, released last week, recommends realignment of the management of UNC’s 16 universities—mostly to fulfill campus wish lists. But downplayed in the report is the reason for the General Administration’s existence in the first place: to help the disparate schools function more efficiently as a system, in order to serve students better.

Boston Consulting Group, hired in December by the UNC Foundation, conducted the study. BCG came under fire in early January from left-leaning advocacy and policy groups. Members of Faculty Forward complained that an anonymous donor funded the study. Local and national pundits, including Diane Ravitch, called attention to Boston Consulting Group’s “dedication to privatization and profit.”

BCG proved those concerns unfounded. As UNC System President Margaret Spellings told the Raleigh News & Observer, the study’s intent was to elicit input “‘from our various customers and users,’ including campuses, legislators, the business community, boards of trustees and others.” For the most part the report reflects the concerns of campus leaders and administrators.

The study interviewed 153 stakeholders throughout the system. Nearly half (47 percent) of those interviewed were employees of individual universities: chancellors, vice chancellors, provosts, deans, and faculty members. BCG also interviewed 39 past or current members of the UNC Board of Governors or boards of trustees; 25 employees of UNC General Administration; five past or current members of the North Carolina General Assembly; and just three students.

Specifically the report lists General Administration’s top strength as its “advocacy role, particularly to the state legislature, but also at a federal level and to external stakeholders.” UNC schools see GA as their “voice in Raleigh.”

But with such a strong focus on campus interviews, it’s not surprising that the report reflects campuses’ priorities, which includes their wish list for General Administration’s (limited) involvement: less oversight, fewer demands, but even more advocacy. They want individual universities strengthened, and the system’s role diminished.

Recommendations include allowing institutions to determine their own metrics and targets for accountability standards. The report also cites two examples where the Board of Governors are believed to have too much authority: the approval of capital projects, and decisions about pay raises (currently most individual pay raises of more than 10 percent require Board approval).

“Chancellors and their teams should be able to set salaries within the bounds of their overall budgets,” the report advises, “…while the Board provides oversight on an aggregate level.”

The recommendations rely heavily on perceptions instead of performance. The report states, “GA activities are least valuable when the services provided are not perceived as valuable by institutions or other stakeholders.”

But General Administration’s second “strength”—providing shared services—sheds light on how the system is intended to function. Employees mentioned student information system hosting and payroll processing as two examples of shared services that work. Sharing services allows the System to take advantage of economies of scale, avoid duplication of effort, and to concentrate talent in one place. Joint purchasing and student health insurance are other sharing services that also save the system considerable money.

But when asked about proposals to share more programs, university leaders were hesitant to relinquish control. Three examples are illustrative:

  • Some campuses have “strong concerns” about a new program to centralize residency verification efforts. The new program would mean all student applications for in-state residency status would be evaluated centrally, eliminating a duplication of effort (and unnecessary expenditures) when the same student applies to multiple schools in the UNC system.
  • Campuses also voiced complaints about financial aid verification services, citing institutions’ “deeper knowledge” of their own students. But in at least one case, “deeper knowledge” turned out to be a code word for fraud. A recent audit conducted by General Administration revealed that Elizabeth City State University admitted 100 students in fall 2015 that did not meet admissions standards, and that 25 percent of enrolled students did not verify completion of required high school coursework. Almost $500,000 was granted to ineligible students.
  • One campus leader complained that General Administration, by sending recruiters to military bases on behalf of all system schools, encroached on the local campus’s territory. “GA has no place setting up administrators at military bases” said one administrator at a campus with “on-the-ground” ties to the military.

In all cases, the report’s recommendations are based on the subjective perceptions of “stakeholders” who have significant skin in the game. The report offers no evidence about the fiscal or timesaving values of these services.

But if UNC is to be more than the sum of its parts, the Board of Governors and General Administration can’t just be advocacy arms for UNC schools. Direction and accountability from the Board, as well as shared services and oversight from General Administration, allow the universities to act as a system and to differentiate themselves by research intensity, regional focus, and student attributes.

The report offers a few ways to improve the system’s performance: the institution of performance management system-wide, improving internal communications, and strengthening data and analytics, among other suggestions.

United, the System can increase efficiency, meet students’ needs, and maintain high standards.