MnSCU reviewing audit report on administrative spending

The state Legislative Auditor says the Minnesota State Colleges and Universities system, or MnSCU, should consider organizational changes to improve the efficiency and performance of its central office.

In a report out Tuesday, the auditor criticizes some work done by the office, which provides support for MnSCU's 32 colleges and universities around the state.

It was MnSCU itself that asked for the state audit of its central office. The first conclusion of the report was that the central office is necessary.

But program evaluator Joel Alter says it's time for MnSCU to take a hard look at whether the central office is operating efficiently and effectively.

"There does need to be some central function, both for governance and for providing some basic services," said Alter. "But you have to make sure that it's not bigger than it has to be, and it's performing those services effectively and efficiently."

MnSCU's central office currently has 400 employees. In fiscal year 2009 it spent $89 million. The overall budget for MnSCU was $1.8 billion.

Alter says the audit found some concerns about the central office from leaders at MnSCU schools.

A survey of 32 college presidents around the state found a majority of them think it's too big. And while the presidents value some services the central office provides, like the handling of legal matters, they also find little value in other work the office does, like fundraising.

The state report is also critical of how the central office handled information and technology projects. Alter says MnSCU has invested heavily in critical technological improvements in recent years, but the work wasn't always done well.

"Some of the projects haven't been managed perhaps as well as they should have been," said Alter. "Some of the initial decisions about how much of this to take on really gave a much bigger workload to the MnSCU office than they could handle. They ended up relying a lot on consultants, and not doing as much oversight of those consultants as they should."

Overall, the state report recommends that MnSCU officials and the MnSCU board of trustees take a hard look at what the central office does and how much money it spends.

The report comes as both MnSCU and the University of Minnesota face tens of millions of dollars in potential funding cuts this legislative session.

MnSCU Chancellor James McMormick says the system is in the midst of fixing some of the items pointed out in the audit. But McCormick says MnSCU leaders, along with the system's board of trustees, will consider each of the recommendations.

"It doesn't mean we'll necessarily come to the same conclusion," said McCormick. "We will process each one, consider it, look at it, and I would think a number of them would be implemented."

The MnSCU board is scheduled to meet on Wednesday to consider the recommendations brought up in the state audit.

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