Wasteful and Inept Administrators
Are Ruining Our Colleges

Since the early years of the 20^th century, America has boasted the world’s finest universities, but that rosy picture is fading.  The lower quality of American college graduates, the shift of foreign students to Asian and European schools and the slippage in the global rankings of American universities signal a serious decline — this at a time when higher education is essential for America’s economic growth and ultimately for its survival as leading world power.  

One reason for this change is the transformation within the academic community.  Today’s great universities were created by faculty who-contrary to the myth of the impractical professor-often turned out to be excellent entrepreneurs and managers.  Over the last several decades, however, America’s universities have been taken over by a burgeoning class of administrators and staffers determined to transform colleges into top-heavy organizations run by inept bureaucrats.

To professors, the purpose of the university is education and research, and the institution is a means of accomplishing these ends.  To the professional deanlets and deanlings, though, the means has become the end.  Teaching and research have been relegated to vehicles for generating revenue by attracting customers to what administrators view as a business-an emporium that under the management of the deanlets may be peddling increasingly shoddy goods.

Profits First, Purpose Second

One typical example of administrative bloat and its consequences was illustrated by the American Association of University Professors and featured in a 2012 report by John Hechinger of Bloomberg News.  Between 2001 and 2010, the number of tenure and tenure-track faculty at Purdue, of one of America’s great land grant universities, increased 12 percent while the number of graduate teaching assistants actually declined by 26 percent.  Student enrollments in this decade increased by about 5 percent.

During the same period, though, the number of administrators employed by the university increased by an astonishing 58 percent and resident tuition rose from just under $1400 to nearly $9000 per year in a pattern that appears highly correlated with administrative growth.   One $172,000 per year associate vice provost had been hired to oversee the work of committees charged with considering a change in the academic calendar-a change that had not yet even been approved.   Since the average Purdue graduate leaves school with about $27,000 in debt, the salary of this functionary is equivalent to the education loans of six students.

           
This new administrator blithely told the Bloomberg reporter, “My job is to make sure these seven or eight committees are aware of what’s going on in the other committees.”  At the same school, the chief marketing officer earns $253,000 and the chief diversity officer $198,000 per year.  The marketing officer spent $500,000 to “rebrand” the university, developing the slogan, “We are Purdue. Makers, all. What we make moves the world forward.”  Very catchy, indeed!  Perhaps the marketing department could develop a slogan that would help explain to parents and students why they must take on more and more debt to pay the salaries of ever-growing hordes of administrative parasites. 

Paying for Chauffeurs, Waterfalls and Personal Ponds

Unfettered administrative power often manifests itself in the form of administrative irresponsibility and pathology.  At too many schools, presidents and other senior administrators have not only inflated the ranks of their managerial armies of deanlets and deanlings, but have also squandered tens of millions of dollars on such things as renovations to their official residences, foreign travel, chauffeurs, dubious expense accounts and exorbitant salaries while faculty are told to do more with less and students are asked to pay more for less. 

Who can forget the former president of a well-respected Washington-area university who had the school build a grand new presidential residence, complete with waterfall and pond, while faculty salaries remained frozen and student tuitions climbed through the stratosphere. Unfortunately, such examples are common rather than exceptional.  All professors can point to cases on their own campuses of the never-ending game of “Can you top this?”

A recent paper by two respected economists, Robert Martin and R. Carter Hill, shows that the fiscally optimal ratio of administrators to faculty at research universities is one full-time administrator for every three faculty.     Deviations from this ratio produced significantly higher costs per student.   The unfortunate reality as Martin and Hill found is that the ratio has almost been reversed–2 administrators to one faculty.   Martin and Hill’s findings suggest, moreover, that about two-thirds of the growth in higher education costs between 1987 and 2008 can be attributed to the rise of administrative power during this period.

The Great Power Grab

On many campuses, administrators have found that they can brush off faculty charges of mismanagement, but one entity managers cannot ignore is the Board of Trustees or Regents.  The Board selects the school’s president, approves the school’s budget and, at least formally, exercises enormous power over campus affairs.  If it so desired, the Board could halt or even scale back the expansion of administrators and their authority on its campus and put an end to toxic managerial practices. As recent events at the University of Virginia suggest, not all Board members are competent.  And, of course, many Board members serve for social reasons or out of a sense of loyalty to the institution and are loathe to becoming involved in campus governance issues about which they often feel poorly informed.  Yet it is precisely those trustees who should want to prevent those institutions from sinking into the ever-expanding swamp of administrative mediocrity.          

Before they can police the administration, however, Boards must police themselves. If they are to be effective, Boards must be held accountable for administrators they appoint and be subject to tough conflict-of-interest rules.  To this end, let me offer a modest proposal: Sarbanes-Oxley.  This Act was, of course, seen by liberals as another weapon to be used against corporate America.  Naturally, they exempted non-profits from the terms of the statute.  A good deal of research, however, suggests that conflicts of interest and other shady practices are common in the not-for-profit sector which may, indeed, be more in need of policing than America’s corporate world.

Apply Sarbanes-Oxley to Colleges?

I would suggest-and I fully recognize the mischievous nature of this suggestion–that university, and perhaps other non-profit boards as well, should be subject to the requirements of the 2002 Sarbanes-Oxley Act from which they are currently exempt.  For most schools, this would entail enhanced Board accountability for administrative actions, the creation of an independent audit committee, an organizational procedure for the protection of whistle blowers, a formal process for the identification and selection of new board members and a strengthening of conflict of interest rules.            

I believe that if Board members were legally more accountable for administrative conduct they would be more cautious about whom they hired to manage the university and would also pay closer attention to what those individuals did once appointed. Perhaps if they were held to account, Boards would be careful not to turn over their campuses to the high-handed and profligate presidents who seem all too common in the world of higher education.  Indeed, in order to avoid trouble, Boards might even find it useful to fully consult the faculty on matters of administrative hiring and retention.

Through its contacts, the faculty collectively knows more about an administrator’s past record, including problems at previous schools and inflated resumes, than the often shockingly uninformed corporate headhunters Boards currently employ to direct presidential and other searches.  And, the faculty can certainly alert a Board to issues of mismanagement before problems become crises and waterfalls overflow into the national media.  Since Sarbanes-Oxley, increased Board scrutiny has led to a sharp rise in involuntary turnover among corporate managers.  Universities and colleges might benefit from the same sort of Board scrutiny-and the same result.                   

As to conflict of interest rules, Board members and companies in which they have significant financial interests should not be permitted to do business with the school. Federal and state conflict-of-interest law addresses issues of overcharging stemming from insider dealing. The problem, however, with business relationships between boards and university administrators is not that the school will pay too much for goods and services. The problem is one of accountability rather than money. 

Board members who profit from their relationship with the university will not provide effective oversight of its administration and will resist efforts to remove even clearly inept administrators. Unfortunately, boards everywhere include members whose insurance firms, construction companies, food service enterprises and the like do business with the school. Such board members cannot possibly provide proper managerial oversight. Perhaps, a strict conflict-of-interest rule would discourage many persons from undertaking Board service. So be it. 

A former Cornell provost once told me that the university had two types of Board members-those who are committed to the university’s interests and those merely interested in profiting from their relationship with the university. We should welcome the former and discourage the latter.  Otherwise, those trustees who want to do good will be blocked by those who merely want to do business.            

Would this modest proposal end the takeover and destruction of higher education by its managers? Not entirely, but if implemented, it might force some managers to think twice before spending tuition dollars on personal waterfalls.