- Total Operational Support Expenditure: $255 million (Up 112% since 2001, Up 37% since 2010)
- Computing & General component: $40 million (Up 133% since 2001, Up 58% since 2010)
- Central Administration component: $126 million (Up 143% since 2001, Up 48% since 2010)
- Physical Plant component: $89 million (Up 74% since 2001, Up 19% since 2010)
- Total General Operating Expenditure: $929 million (Up 98% since 2001, Up 29% since 2010)
- Enrollment – 35,034 (Up 59% since 2001, Up 22% since 2010)
The critical importance of keeping Operational Support costs under tight control was addressed on the Resource Allocation page. Operational Support is provided in three General Operating (GO) functions – Computing & General, Central Administration*, and Physical Plant (see CAUBO definitions HERE, pages 19-22). These functions provide vital support to the entire university, but their major cost escalation is central to many of the issues facing Canadian PSE.
A university’s ability to adequately fund Instruction during a prolonged period of rising enrollment, and keep student fee increases to a minimum, is dependent on its success in managing costs carefully in areas that are less enrollment-sensitive. The Operational Support functions are activities in which, for the most part, the infrastructure is capable of handling varying activity levels without substantial change.
The 59% increase in enrollment since 2001 delivered 59% more students into Instruction but it didn’t trigger a 59% increase in the cost of cleaning and maintaining space, or add 59% to the cost of computing services, and it certainly didn’t trigger a 59% workload increase in Central Administration, which is much more managerial and administrative than operational.
As noted on the Resource Allocation page, there may be a rationale for the cost of any of these Support functions to increase at a rate higher than inflation, but there is no credible rationale for them to track enrollment as well.
A case certainly exists for the growth in Computing & General cost to exceed inflation. Technology is far more integrated into everyday PSE processes than it was in 2001, and increased spending in this area has the ability to improve efficiency, generate cost savings in other administrative areas, and add important dimensions to campus life and the academic program.
A case also exists for Physical Plant, because all universities have had to increase the amount of space and space utilization levels to accommodate the increasing enrollment, and that space needs to be maintained. In addition, all the universities are all grappling with the challenges of aging infrastructure.
The weakest case, by far, exists for the highest-cost Central Administration function (see definition HERE – Pages 20-22). 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. Only the registrar function is enrollment-sensitive, and much of its student contact has been automated since 2001. While Central Admin also includes “all activities provided by an institution in direct support of Instruction and non-sponsored research”, most of the student-contact dimensions of those activities are within the faculties at the majority of schools. There have certainly been some new costs (as addressed in the Administrative Cost topic), including costs associated with international student recruitment. However, to suggest that Central Admin is enrollment-sensitive is to argue that the 59% enrollment increase since 2001 necessitated a 59% increase in the number of senior administrators and their support staff.
The chart below shows the change across the Top 25 since 2001 in “Real PSE Dollars” (adjusted for both inflation and increased enrollment). Positive values denote increases exceeding inflation and increased enrollment combined:
3 A) Changes in Real Operational Support Costs Per FTE Student – By Function (Top 25)
3-A-Changes-2024
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As a result of those cost increases – far exceeding the combined impact of inflation and increased enrollment – the Operational Support functions now consume higher shares of Total GO Expenditure, not the lower shares that would have resulted if these costs had been properly contained.
2024 Shares of Total GO Expenditure (Top 25):
- Computing & General – 4.3% (3.6% in 2001, 3.5% in 2010)
- Central Administration – 13.5% (11.0% in 2001, 11.9% in 2010)
- Physical Plant – 9.6% (10.9% in 2001, 10.4% in 2010)
- Operational Support (Total) – 27.4% (25.6% in 2001, 25.8% in 2010)
These numbers provide disturbing insight into the standards of financial control at our leading universities. It’s inevitable that overspending in the support areas during a period of rising enrollment will directly trigger needless increases in student fees and declining standards (including increased class sizes) in the academic program.
Even after the reductions in provincial support, which started in around 2010 and should have forced the universities to address this overspending, they continued to increase their Support costs at a rate far exceeding inflation and enrollment combined.
The profligacy also represents a failure to address the crucial “Fixed versus Variable Cost” challenge that dictates whether the university is able to withstand fiscal adversity, should it arise. It has now arrived – in the form of looming declines in the lucrative income provided by international student enrollment, and most universities are deeply unprepared to ride-out the fiscal shock.
The cost escalation for Central Admin (easily the most expensive of the three components) is particularly egregious. The inflation-adjusted spending increase of 143% since 2001 is more than double the 59% enrollment increase. It now consumes $126 million of funding at the average Top 25 university.
The rising cost of Central Admin has been a focus of campus frustration for years. Students view it as a key driver of rising fees, and faculty see Central Admin costs – and staffing levels – increasing while they are forced to handle quality-damaging cutbacks, larger class sizes, 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 dominated the campus landscape over the past twenty-five years – and at the associated cost. The numbers add legitimacy to the campus perception that Central Admin has an unpleasant habit of rendering itself immune to the adversity it imposes on students, faculty and other sectors of campus.
Senior administrators can be highly 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, and somebody has to ask them.
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 evident in the universities’ own numbers.
It’s certainly a more challenging environment to manage, but that’s not a one-way street. New technologies have enabled universities to automate many administrative 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 the Central Administration function 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 arguably the most disturbing picture on this site.
Much-increased Operational Support expenditure levels is an endemic issue, and the problematic trends are showing no signs of relenting. It’s a deeply debilitating and threatening weakness.
Efficiency Ranking
The underlying methodology for the Efficiency Ranking can be seen HERE.
3 B) OPERATIONAL SUPPORT COSTS: 2024 EFFICIENCY RANKINGS
2 C) 2024Download this table (Opens in new tab)
Key Efficiency Indicator and Relative Cost Impact
The underlying methodology for the Key Efficiency Indicator and Relative Cost Impact calculation can be seen HERE.
These measures are provided for the Top 50, with 2020 as the base year, and for the Top 25, with 2010 as the base year. The Top 25 table shows the major dollar consequences of the efficiency decline in that timeframe.
3 C) KEY EFFICIENCY INDICATOR AND RCI: 2024 vs 2020 – and – vs LATEST GROUP AVERAGE (TOP 50) – Opens in new tab
3 D) KEY EFFICIENCY INDICATOR AND RCI: 2024 vs 2010 – and – vs LATEST GROUP AVERAGE (TOP 25) – Opens in new tab