As chief financial officer, Robert Kasdins primary responsibility is to ensure the preservation of the Universitys financial health, and it is, indeed, in good condition, he told the Regents at their meeting last week.
To maintain that healthy status, he focuses his efforts in three areas:
The University, Kasdin noted, is approaching the end of a total replacement of its management information systems, which provide the infrastructure for financial, physical and student business activities. Starting with the introduction of a space management system and extending to last months rollout of the final portion of the student administration system, this has been done collaboratively, and with a sense of collegiality, he said. The final piece of the M-Pathways project is human resources, to be implemented in 2001.
In reviewing expenditures and transfers in FY 2000 (excluding the Health System), Kasdin noted that compensation accounts for almost 60 percent of the Universitys costs46 percent for salaries and wages and 12 percent for benefits.
It is increasingly difficult to attract and retain faculty and staff, he said, particularly faculty and staff with technological expertise.
Kasdin and his staff continue to work to find efficiencies, he explained, citing a 60 percent decrease in time lost due to accidents and a comprehensive program to help staff return to work faster after an illness or injury, resulting in $5 million saved in workers compensation costs.
Efforts to squeeze the costs of supplies will continue, with accomplishments already seen in reducing time-to-payment of invoices by combining Purchasing and Accounts Payable to remove duplication of effort; the use of P Cards, which saves about 50 percent of transaction costs; and the use of prime vendors.
The cost of using the Universitys prime vendorswhich offer significant savings based on volume purchasingis about 10 percent of what it costs to do business the old-fashioned way (purchase orders). The U-M also has realized significant savings in technology costs, negotiating contracts that allow it to purchase equipment at reduced costs and sell it to departments and individuals at cost. Savings also have been realized in non-commodity areas.
Continued effort over recent years to increase the efficiency of the Central Power Plant and contain overall utility costs will result in a savings on utilities costs in the general fund budget of approximately $3 million. Rates for campus units that receive steam and electricity from the plantmost of the Central, South and Medical campuseswill be reduced 8.4 percent for steam and 7.8 percent for electricity.
Rates for the fiscal year that began July 1 will be 7.6 cents per kilowatt-hour of electricity and $8.70 per 1,000 pounds of steam, down from 8.2 cents and $9.50 respectively.