The escalation of Operational Support costs is central to many of the issues facing Canadian PSE.
Three GO functions compose “Operational Support”: Computing & General, Central Administration (Central Admin), and Physical Plant – see CAUBO definitions HERE, pages 19-22. (Central Admin is a re-amalgamation of two former CAUBO functions – Administration & General and External Relations; they were included in “Administration & General” before being separated in 2004.)
These functions provide vital support to the entire university, but they are expensive – totalling over $222 million at the average Top 25 university in 2022, and consuming more than 27 cents of every dollar of GO funding.
Cost-efficiency is crucial to the university’s ability to deliver funding to Instruction, and to minimize the need for student fee increases.
The chart below shows the change across the Top 25 since 2001 in “Real Dollars” (adjusted for both inflation and enrollment). Positive values denote increases exceeding inflation and enrollment combined:
3A)
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Top 25 Change Overview (Inflation-adjusted):
- Computing & General expenditure averaged $33 million in 2022 – up 114% since 2001 (45% since 2010). It now accounts for 4.0% of GOE (3.6% in 2001, 3.5% in 2010).
- Central Admin expenditure averaged $107 million in 2022 – up 130% since 2001 (39% since 2010). It now accounts for 13.1% of GOE (11.0% in 2001, 11.9% in 2010). Central Admin now represents 48.0% of Total Operational Support cost (43.2% in 2001, 46.0% in 2010).
- Physical Plant expenditure averaged $83 million in 2022 – up 81% since 2001 (23% since 2010). It now accounts for 10.1% of GOE (10.9% in 2001, 10.4% in 2010).
- Total Operational Support costs averaged $222 million in 2022 – up 107% since 2001 (34% since 2010). They now account for 27.2% of GOE (25.6% in 2001, 25.8% in 2010).
To add perspective to the above numbers, average enrollment has increased by 57% since 2001 (21% since 2010).
For further perspective, expenditure in the “mission-critical” Academic-focused category has increased by much less than Operational Support expenditure – 79% since 2001 (21% since 2010). As a result, it has now fallen to 62.1% of total GOE (67.5% in 2001, 65.2% in 2010).
The Operational Support functions are not as directly impacted by enrollment increases as direct student contact areas like Instruction and Student Services. The 57% increase in enrollment since 2001 didn’t trigger a 57% increase in the cost of cleaning and maintaining space, or add 57% to the cost of computing services, and it certainly didn’t necessitate a 57% increase in the cost of Central Admin (which is much more administrative than operational).
There has to be a solid rationale for the cost of any of these functions to increase at a rate significantly higher than inflation, but growth exceeding inflation and enrollment combined is excessive and unsustainable.
A case certainly exists for the growth in Computing & General cost to exceed inflation. Technology is far more integrated into everyday PSE processes, at all levels, than it was in 2001. Inflation-adjusted spending has increased by 114% since 2001 (45% since 2010).
A case also exists for Physical Plant, because all universities have had to increase the amount of space to accommodate the increasing enrollment. In addition, they are all grappling with the challenges of aging infrastructure. These factors inevitably impact Physical Plant cost. Inflation-adjusted spending has increased by 81% since 2001 (23% since 2010).
The weakest case, by far, exists for the highest-cost Central Admin function, but it has seen the largest increase – 130% since 2001 (39% since declining provincial support, starting in 2010, magnified the need for fiscal prudence).
Central Admin covers the top bureaucracy of the university – the offices of the president and vice-presidents (including all their support staff), and functions such as external relations, financial services, human resources, the registrar, and alumni affairs. It also includes “all activities provided by an institution in direct support of Instruction and non-sponsored research.” (See definition HERE – Pages 20-22)
Its rising cost has been a focus of frustration for years. Students view it as a driver of rising fees, and faculty see Central Admin costs – and staffing levels – increasing while they are forced to handle quality-damaging cutbacks and higher workloads. Even the general public has voiced anger after seeing “Sunshine Lists” disclosing public sector salaries, including those of senior PSE administrators.
Accusatory campus fingers have long been pointed at growing central “empires”. There is widespread frustration at the degree to which “top down” bureaucratization has overpowered collegial governance and dominated the campus landscape over the past twenty years – and the associated cost. The above numbers add legitimacy to the campus perception that Central Admin often renders itself immune to the adversity it imposes on students, faculty and other sectors of campus.
Senior administrators can be sensitive to criticism, and the push-back can be intimidating. It’s not easy to criticize them from inside campus because that can make life difficult for anyone with the courage to do it. But there are some tough questions to be asked.
The main explanations cited for the rapid growth are the increasing complexities of operating a university, the advent of new governmental and legal requirements, and the need to spend money to attract international students. However, these factors don’t come close to accounting for the magnitude of the cost increases we have seen.
It’s certainly a more challenging environment to manage than in 2001, but that’s not a one-way street. New technologies have enabled universities to automate many tasks previously performed manually. Numerous areas have benefitted from this, such as the Registrar’s Office, where administrative and student contact processes are vastly different to those in place in 2001. This kind of change should have generated substantial cost savings in central areas, which makes the major cost escalation even more difficult to understand – and accept.
If increased complexity, expanded governmental and legal requirements, and the pursuit of internationalization really were the main causes of the increase in Central Admin costs, most universities would be impacted to a similar degree, but they are not. As the Rankings table shows, some are far better than others.
It is important to note that the cost of Central Admin is impacted by the degree of centralization or de-centralization in the university’s approach to academic support. This is addressed in the Administrative Cost topic HERE, where Other Salaries & Wages costs in Central Admin and Instruction are combined. Under that approach, some universities with relatively high Central Admin costs become more cost-efficient when the combined cost is measured, and vice versa.
However, the overall pattern revealed in that Topic – rapid growth in non-academic staff cost, relative to academic staff expenditure – is one of the most disturbing pictures on this site.
Increasing Operational Support expenditure levels is an endemic issue, and the problematic trends are showing no signs of relenting. It’s a debilitating weakness.
Rankings Tables
The underlying methodology for the tables below can be seen HERE. Each table opens in a new tab.
3 B) 2022 Efficiency Rankings – TOP 50
3 C) 2022 Change Rankings Since 2020 – TOP 50
3 D) 2022 Change Rankings Since 2010 – TOP 25