Cost Savings Task Force Report Board of Trustees July 15, 2005

Background  Nearly $127 million recycled since  Programs eliminated or merged as new ones added  Effective quality improvement programs 2

Cost Savings Task Force Results and  $20,961,000 in annual savings and non- tuition income enhancements  Equivalent to $350 per student per year  Total amount of tuition increase avoided: 3.8 percent

 Cost Savings$  Non-Tuition Income Enhancements  Task Force Target $ Task Force Target for

Cost Savings$ Budget Recycling Non-Tuition Income Enhancements Total$ Equivalent to $180 per student per year Additional tuition increase avoided: 1.7 percent Task Force Results for

Approach  Captured centrally: – Selected budget reductions – Non-tuition income enhancements – Budget recycling  Internal unit reallocations  Retained within operating units: – Savings – Cost avoidance – Operating efficiency 6

Budget Reductions and Income Enhancements Captured Centrally Budget Reductions: Employee Benefits$ Outreach Administrative Streamlining Non-Tuition Income Enhancements: F&A Recovery Budget Recycling: Budget Reductions From All Units Central Recycling Total$

Cost Savings Summary  Cost Savings and Recycling $  Income Enhancements $ Tuition increases avoided – 5.5 percent $  Total

Internal Unit Reallocations  Moves funds from lower to higher priorities within units  Based on strategic plans  $3,281,000 internal reallocations for

Savings, Cost Avoidance and Efficiency  An on-line bidding event where the buyer posts a requirement and suppliers “bid” on the opportunity to sell.  Penn State is an early adopter in higher education  Savings of $1,043,000 since July Reverse Auctions

Savings, Cost Avoidance and Efficiency 11 Electronic Purchasing  Penn State e-Buy pilot will be implemented Fall 2005  Expect annual savings of $1,380,000 per year

Savings, Cost Avoidance and Efficiency 12 Travel Costs  Electronic Reimbursement System (ERS) will pilot in October 2005  Expect savings from improved efficiency and improved contracts  Expanded use of teleconferencing/videoconferencing

Savings, Cost Avoidance and Efficiency Computer Purchases  ITS bundles equipment orders from multiple units (e.g. PC’s and software)  $500,000 saved this year on advanced computing hardware

Savings, Cost Avoidance and Efficiency  Copier Management Program $  Master Maintenance Agreement  Print Management Program Other Projects in Progress Expected Savings

Graduate Program Review  Three-year, comprehensive review of graduate programs  Reviewed 315 degree programs  Dropped 18 graduate degree programs and 47 graduate courses  Channeled resources to more viable programs 15

Cost Savings Summary  Completion of successful 3-year plan for cost savings  Continuing initiatives: – Energy savings – Electronic purchasing – Reverse auctions – Administrative streamlining – Reducing health care costs 16

Major Planning Initiatives  Evaluation by Middle States Commission on Higher Education  Penn State’s Strategic Planning Process

Penn State’s Planning Goals 1.Enhancing academic excellence 2.Enriching the educational experience of all Penn State students 3.Building a more considerate and civil University community 4.Serving society through teaching, research, and service 5.Developing new sources of income and reducing costs 18

Focus on Enriching the Educational Experience Goal 2: Enriched educational experience Middle States Self-Study Unit-Level Strategic Plans

Middle States Outcome  Comprehensive self-study completed  Successful Review Team visits  Penn State has been re-accredited for another 10-year period  Affirmed University’s compliance with all eligibility requirements 20

Integrated University Assessment Plan  First-Year Seminars  Out-of-class experiences  Student learning in General Education courses  Student Support Services 21 Committee will develop a plan to carry out assessments and use the data to improve programs and services with prospective focus on

Unit Strategic Plans  Plans submitted by all major budgetary units  Involvement by faculty, staff, and students  Excellent unit plans that dovetail with the University’s overarching goals  Contribute to the University’s composite Strategic Plan

Common Themes of Unit Strategic Plans  Focusing on the undergraduate experience  Enhancing international opportunities, internships, and undergraduate research  Building an eminent faculty in emerging academic fields

Common Themes of Unit Strategic Plans, continued  Expanding the use of technology in teaching and learning  Providing enhanced undergraduate scholarships and graduate support  Conducting regular program reviews  Increasing collaboration between University Park colleges and the other campuses

Next Steps  Maximize the use of resources  Enhance academic quality and student experience  Use strategic planning to guide our progress  Pursue greater University-wide assessment