Strategic Plan Implementation, Core Council Process Showing Results

By Annemarie Mountz, Penn State

UNIVERSITY PARK — When Penn State President Rodney Erickson addressed the state Senate Appropriations Committee on March 1, he made a point of explaining the land-grant mission that has been part of Penn State since the passing of the Morrill Act in 1863. “One cannot understand the Penn State of today — our mission, where our many facilities are located or the cost of tuition — without understanding the 1863 agreement between the federal government and the Commonwealth of Pennsylvania to establish a new type of institution of higher education,” he told the panel.

It’s a message he also delivered last fall to faculty and staff gathered to hear an update on the progress of the University’s strategic plan and Core Council process. Erickson, then Penn State’s executive vice president and provost, told that group, “I think we’re in for tough sledding, because the public in general doesn’t have a clue about what it means to be a land-grant university. There’s just no sense that this really is something that’s that important … and so they would rather support other areas” with their tax dollars.

Erickson said then that a key to changing this is taking a fresh look at the land-grant concept. “Over the years we ended up doing many things that were not necessarily part of our core mission, or they were not directly related back to the strong research that was taking place here. What we do in Extension needs to be connected back here to the University. That’s the way we demonstrate our value, not just as a land-grant university, but also as a much more engaged institution.”

That sort of re-focusing has been taking place University-wide as implementation of both the strategic plan and the Core Council recommendations continue. Core Council, officially known as the Academic Program and Administrative Review Core Council, is a 13-member group initially chaired Erickson to provide in-depth analyses of programs, examine available resources, find efficiencies and determine how to maintain the University’s excellence in an era of declining state revenue and mounting fiscal challenges.

Penn State entered the 2011-12 with a 19.6 percent cut to its state appropriation, a reduction of $68 million compared to the previous year. In addition, the governor in January announced a statewide budget freeze and a mid-year budget holdback of an additional five percent, or $11.4 million. For the coming fiscal year, the governor has proposed a 30 percent, or $64 million, cut to Penn State’s appropriation.

The University has coped with these fiscal challenges thanks in part to the work done from late 2009 through 2011 by the Core Council, which identified $10 million in permanent cost-savings for the University in each of the last two academic years. While the council was discharged in December 2011, its recommendations will have a positive impact on Penn State’s colleges, campuses and administrative units for years to come.

Erickson has asked Rob Pangborn, interim provost, to take the lead on following up and monitoring progress on the recommendations.

“The Core Council took its charge seriously and produced some excellent ideas,” Pangborn said. “Now, we need to follow through, and we’ve created a process to do that. I’m working with the deans, campus chancellors and vice presidents, and I’m confident that together we will continue to build on the foundation that the Core Council provided.”

Improvements already realized

Changes already have been made to several big-ticket items. Health care costs are a major expense for the University, so it was one of the first areas examined. Ultimately, benefits changed for retirees, as well as current and new employees. For details, visit online.

Utility costs are another major drain on the University’s budget. The University has invested in energy-savings projects that already are reducing utility costs. These include changing temperature policies in buildings; replacing conventional lighting with energy-saving fixtures; and becoming more forceful in energy procurement strategies. In addition, the University will be working from now through 2014 to transition major steam plants on the University Park campus from coal to natural gas. One power-saving initiative detailed here could save Penn State $800,000 annually.

Information technology is another major area targeted for improvement. “There are some commodity services and other things that we do at the central level that are done most efficiently and effectively there, and there are many kinds of services that are provided in the units across the University that really need to be there, where the rubber hits the road. An external consultant, Phil Goldstein and Associates, conducted a very expansive review of our IT operations to really try to figure out the sweet spot between those central and distributed services, and we’re now following through on their findings and recommendations,” Erickson said.

Academic reviews and actions

The executives of all University Park colleges and schools and many academic support units have received recommendations from the provost, reflecting the Core Council’s evaluations and recommendations. The vice president for Commonwealth Campuses received a memo reflecting 10 recommendations for campuses in the aggregate, and each campus chancellor has received a set of campus-specific action recommendations. Those letters can be found online.

Recommendations include increased sharing of resources that can lead to greater efficiency and effectiveness for University Park colleges and the Commonwealth campuses, as well as increased cooperative course and program sharing, and sharing of available instructional resources and faculty across multiple campuses.
The Core Council reviewed extensive evidence on program quality, size and efficiency, and developed strong and specific recommendations, including the closing or merging of certain degree programs and departments. In addition, the Core Council recommended that more focus be put on building on existing strengths and priorities of the institution, rather than on creating new programs.

Recommendations for the Commonwealth campuses include consolidating or phasing out associate degrees with low demand; eliminating under-performing baccalaureate degrees and replacing them with others that have stronger appeal; and facilitating change of assignment to campuses other than University Park.

“Each year between 3,600 and 3,900 students change assignment to University Park, but there are almost 1,000 students who move from one Commonwealth Campus to another, as well. We need to build on that and encourage more of our students to take advantage of the many high-quality programs where campuses tend to specialize in certain areas,” Erickson said.

Opportunities for revenue enhancement

The University is not trying to balance the budget solely by cutting expenses. The Core Council also focused on opportunities to enhance revenue, including developing programs in which students are able to complete both a baccalaureate degree and a master’s degree in five years. One example is the integrated bachelor of science in special education and master’s degree in curriculum and instruction in the College of Education. In another, students earn a Smeal College baccalaureate and a master’s degree in accounting as well as the necessary credits to qualify for the CPA.

The World Campus is Penn State’s major enrollment growth area. Professional master’s degrees, along with professionally oriented undergraduate degrees, are the fastest growing markets in online education. The Core Council encouraged colleges and campuses to develop programs responsive to these markets.

Penn State also has implemented a new budget model for Summer Session, which should provide increased revenue and better use of resources.

For more information about the strategic plan, visit online. Updates on the progress of the strategic plan implementation can be found here and for information about the Core Council process, including the recommendation letters sent to each of the colleges, campuses and administrative units, visit online.

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