The good news finally came that the two administrators will sit side by side to find out the way to manage higher education in CA more efficiently. That what we call it civilized way of managing public education institutions instead of using threats or holding the students as the hostages. As part of the Association’s contribution to the American public, we have published many research results on the issues and will continue to do so. The driving factor of our analyses is nothing, but motivated by and for the good of the American public. We do not have the interest on the political side of the issue, but to the public policy which will maximize the social benefit above the cost i.e., to max out the return of public investment by an optimal allocation of resources such that at least Pareto Improvement (PI) can be achieved.
Right now, the public sees that PI is attainable and it is not something that is true in theory. Based on ten-year data submitted by each institution to the regulator agency we look pretty closely on the spending structure at each UC campus under the System. While the spending behavior is different by institution, one can see pretty clear pictures from the figure below that, in general, the largest spending of the budget is on instruction. The regulator has defined:
1. Instruction_share: Instruction share of education and related expenses.
2. Admin_share: Academic and institutional support and operations and maintenance share of education and related expenses.
3. Studserv_Share: Student services share of education and related expenses.
While this graph only shows the big picture, one needs to analyze deeper to understand the real problem behind each spending category. The University of California at Merced stands out on its administrative expenses way above those of other institutions and it did not have the graduation rate information. UCLA’s instruction expenditures are above those of others’, but it has the highest graduation rate (6-year) as well. This simple information can be used to (1). apply performance based funding; (2). be used to make strategic decisions; (3). to initiate the application of LEAN across campuses and departments. For example, how can UCLA justifies its 71.8% spending for its budget on instruction. Which of the spending items on the instruction expenses make up most of the expenditures? Is it faculty members’ salary? Which faculty members i.e., Assistant, Associate or Full Professor?
