The University of Akron will continue the services of Ernst & Young, at least for another six months, at a cost of $200,000 a month in hopes that the investment will result in financial gains for the school.
The management and accounting firm previously spent four months assessing the university’s finances, suggesting that if no action is taken soon, the annual budget deficit “could grow significantly and create even greater challenges.”
UA President Matthew Wilson has come up with a “Transformation Plan” after gathering input from the leadership of the university, including discussions with the Faculty Senate, University Council and the Akron chapter of the American Association of University Professors, faculty, staff, students, contract workers, alumni and community leaders, as well as from about 30 town hall meetings. He was seeking ideas about ways to increase revenue and cut costs.
This year, UA’s strategy is to be conservative and yet efficient while in its planning stage. The two-year plan will include a cutback on travel expenses, voluntary university wide buyouts, remodeling the way scholarships are distributed and strengthening recruiting efforts that will also target international students.
UA is operating on a deficit, which is being covered by an $18 million withdrawal from savings.
The first Ernst & Young analysis was paid for by an anonymous donor, but the next one will be funded by the university.
The contract will cost $200,000 a month, from Dec. 8 through June 30, 2017, but can be cancelled at any time with a 30-day notice.
“We have limited hands at this time. We have some expertise, but not all the expertise that we need and because we need to move quickly in this two-year transformation the determination was made that they we’ve already seen good work from them,” Wilson said. “They are going to assist in data collection, which is what we need to make a lot of strategic decisions. We may need them four months, six months or eight, but we need to get our systems in order. Let’s get the data that is there and tap into their expertise in terms of what they can do for us. We are investing a million or two [million] dollars in order to realize millions of dollars in future savings.”
He said the money for the consulting contract will come from the general fund budget.
UA Board of Trustees Chair Roland Bauer said the university’s two year Transformation Plan emerged in correlation with the Ernst & Young report. The firm help set target goals.
“It is imperative that we move ahead quickly with developing the detailed action plans that will be needed to achieve our goals,” Bauer said. “In many cases, putting into action those initiatives requires additional experience, expertise and staffing resources.”
The goal for the university’s Transformation Plan is to achieve a $25 million savings next budget year and $45 million of revenue increases or cost savings prior to June 2019.
“We can do a lot, but we can only do so much,” Wilson said in talking about the new contract with Ernst & Young. “This gives us the added firepower that we’re going to need to make sure that we have enough gas in the engine to get us up the hill.”
Marilyn Miller can be reached at 330-996-3098 or mmiller@thebeaconjournal.com