Effectiveness and Efficiency Initiative
The University System of Maryland (USM) launched its Effectiveness and Efficiency Initiative in 2003-04 to manage a number of unprecedented challenges prevalent at that time: declining state aid; rising costs in energy and health care; rising demands on higher education in an economy increasingly based on knowledge and information; and surging enrollment from the "baby boom echo." As of Fall 2016, the USM had saved more than $540 million through its Effectiveness and Efficiency (E&E) Initiative.
The USM Board of Regents established the E&E Workgroup to address these issues. The driving force behind the E&E Initiative was the need, in such challenging economic times, to optimize USM resources to yield savings and cost avoidance.
The workgroup, a collaborative effort involving the regents, chancellor and USM vice chancellors, and leaders from all USM institutions, identified several action steps to reduce costs.
These steps included centralizing services such as internal audit, construction management, and real property development; strategically leveraging USM buying power, including a pooled purchase of energy by USM schools acting as a shared entity; and implementing cost-effective energy management strategies.
The group targeted efficiencies on administrative and academic levels through two action stages, Phase I and Phase II.
The driving force behind the E&E Initiative was the need, in today's challenging economic times, to optimize USM resources to yield savings and cost avoidance. The original goals of the E&E Work Group, through the establishment of the USM Board of Regents Committee on Effectiveness and Efficiency in 2011, remain the same: promote enhancements in effectiveness and efficiencies in the USM operating model, increase quality, serve more students, and reduce the pressure on tuition. The Tenth Anniversary Report to the Board of Regents on USM Effectiveness and Efficiency Initiatives in April 2013 documented $356 million in cumulative savings in the initial 10 years following the E&E launch during 2003-04.
- Removed more than $130 million in direct costs from its budget, with significant additional savings through cost avoidance;
- Held in-state undergraduate tuition flat through the '06, '07, '08 and '09 academic years;
- Despite a modest 3% tuition increase for fall 2010, established a tuition schedule projected to have the 21st highest tuition in the nation in fiscal year 2011 (from 6th highest in earlier stages of Phase 1).
As a result of E&E Academic Action Phase 1, USM has achieved the following:
- Increased faculty classroom contact hours at undergraduate research universities by 20%;
- Achieved all-time high levels of community college transfer rates;
- Saw time-to-degree across the system at an historic best level, averaging less than 4.5 years;
- Added 5,000 students in 2008-09, despite the absence of additional funding for enrollment growth
Phase II of the E&E initiative reflects USM's commitment to sensitivity to cost-containment issues. Several broad administrative and academic initiatives form the foundation of Phase II:
- Early college access (articulated partnership agreements between the USM and public high school systems;
- Two-year/four-year dual admission;
- Financial best practices (ongoing commitment to shared services, aggregate procurements, and energy conservation);
- Course redesign;
- Expansion of USM regional education centers;
- Commitment to accountability and transparency.
The USM has embraced the state's investment in higher education. E&E action continues to help the USM reposition itself for success in this challenging economic environment.
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University System of Maryland
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