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Hanlon Administrative Budgets Fall

In September 2010, when Phil Hanlon was elevated to Provost at Michigan, he laid down the law for the university’s finances in the face of state funding cuts: we will not diminish the core academic mission of the institution; savings will come from operations:

“The competition for top faculty is ferocious,” he said. “To maintain our ability to attract those top faculty is partly a financial challenge.”

To direct financial resources at academics, many of the recent cuts have been made in the operational support areas, Hanlon said. He added that would continue, with particular attention being paid to the areas of IT and purchasing in the near future.

“We’ve worked really hard to make sure we are avoiding a lot of devastating impact on our programs,” he said. “We’re committed to reducing 1½ percent to 2 percent of our operating budget every year. We are truly focused on operations rather than academics…”

“The current path we’re on can’t be continued,” he said. “The funding model for higher education is broken.”
[Emphasis added]

That’s the spirit! However, Phil was protecting sensitive feelings in trying the find savings in “IT and purchasing.” That’s not where the money is. Look at the distribution of the College’s expenses in fiscal 2012:

Dartmouth Expenses 2012 pie chart.jpg

Salaries and benefits for faculty and the bloated staff constitute 56.7% of all costs. There’s really nowhere else to look for the resources that must be re-directed to hiring top-notch faculty members — especially because most of the final three items on the list below (utilities, taxes and occupancy; depreciation, interest and amortization) are uncompressible; they make up 15.4% of spending.

Addendum: Salaries, benefits and other costs for the faculty alone have been in the range of 13% of all spending for a while now. That’s an astounding statistic in and of itself; the tail is almost seven times as big as the dog. And for people concerned about the cost of athletics, the budget (compensation and purchasing) for Harry Sheehy’s area is a scant 2.5-4% of the College’s total expenses, depending on how you do the calculation.

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