The University of Tulsa spends its money in a reasonable manner, the school’s chief financial officer said last week after a faculty member’s widely distributed analysis claimed otherwise.
The professor, Matt Hendricks — whose research area is K-12 finances — said his calculations show TU spends a smaller share of its overall budget on instruction and more on academic support and auxiliary enterprises than most peer institutions.
Instruction primarily includes faculty salaries and benefits. Auxiliary enterprises include housing, food service and intercollegiate athletics.
Academic support includes academic administration — typically the provost’s office — and nonteaching support staff such as counselors. Academic support also includes museums and other academically related facilities.
The president’s office and other administrators are under another category, called institutional support. TU’s spending in this category is actually at the low end of the scale.
TU’s chief financial officer, Executive Vice President Kevan Buck, said Hendricks’ analysis is based on old data and skewed by factors such as Gilcrease Museum, which weighs in at more than 25% of TU’s academic support budget.
Taking Gilcrease’s $8 million budget out of the equation lowers the share of academic support spending, but it wouldn’t increase the actual dollars allocated anywhere else because the $8 million would stay with the museum.
(Buck said Gilcrease is currently self-sufficient but was previously subsidized by the university for several years. A policy statement last spring said TU will no longer “backstop” museum operations.)
“No matter what else is said, every year, year in, year out, we spend much more on instruction than we do any other category,” said Buck.
Hendricks agrees per-pupil spending is about average for schools like TU but says it could be higher.
“I try to identify where TU should be given its innate characteristics,” Hendricks said. “(Instruction) should be at about 33%. Instead we’re at about 27½ or so.”
Hendricks also contends TU’s per-student administrative costs are among the highest in the country.
Underlying the dispute is anger and suspicion over an academic reorganization that critics say was formulated without sufficient faculty input.
The administration says the reorganization is necessary given recent financial reversals and market place realities.
Skeptics say the university is scrimping on academic quality — i.e., faculty — while overspending on administration and things like buildings and athletics.
In particular, they have zeroed in on an expansion of the provost’s office, which is accounted for under academic support, and whose chief occupant, Janet Levit, has become a major target of the reorganization’s opponents.
Buck acknowledged the provost’s office has added personnel in the past few years but said those additions are related to efforts to improve the school’s graduation and retention rates.
“We invested in the provost’s office, without question,” said Buck. “Frankly, we needed it. We needed more people in it to deal with the issues we were dealing with at the time and that we’re currently dealing with.”
Those “issues,” Buck said, surfaced largely because of changes in the methodology for the U.S. News and World Reports college rankings.
Those changes highlighted low graduation and retention rates based on expectations given entering students’ academic records, and low graduation and retention of Pell Grant recipients.
The later criteria is new and was added to the formula as a measure of “upward mobility” — that is, the extent to which the university helps students overcome financial constraints.
Buck said those two elements have been factors in TU’s slide from No. 75 in the ratings in the early 2010s to No. 121 in the 2020 edition, including a drop of 15 spots in just one year.
Buck pointed out TU’s highest ranking for an individual criteria — No. 36, up three spots from 2019 — was faculty support.
While such rankings are widely disparaged, they are nevertheless important to universities, especially private schools such as TU that must convince families they are worth the higher tuition.
So TU decided to spend more on academic support in the form of academic counselors and “financial coaches” who begin working with students before they even arrive on campus, as well as on other student support services.
Buck said the school’s largest auxiliary expense is for student housing and food service. The university owes a total of about $120 million on campus buildings and also has a significant number of new buildings that are paid off but show up as expenses because of depreciation.
Buck acknowledged a significant spike in athletics spending several years ago, but said the department has since taken a $2 million budget cut.
“The problem is not on the expense side,” said Buck. “It’s on the revenue side.”
And revenue from student tuition is declining — about $6 million a year from 2014 — even while enrollment has remained stable.
A big reason for that, Buck said, is the virtual disappearance of international students. TU’s international enrollment has declined by more than 80% over the past six years.
That’s important because, unlike domestic students, internationals usually paid full rates.
“In 2014, one international student equaled three domestic students in terms of revenue,” Buck said.
Hendricks and others argue that the university is putting money in the wrong place, that its priority should be hiring more and better faculty.
They also complain that communication and lack of access to the university’s budget details contribute to the tension with faculty. More generalized financial statements are available online through 2018.
Hendricks built his analysis on a data set that ends in 2015, and was able to extrapolate it out to 2017.
Buck said the university was at its financial nadir in 2015, hit by a succession of calamities that caused it to lay off more than 50 staff members and suspend contributions to employee pension funds. It also had to write off $14.5 million in pledged contributions that did not materialize.
Buck said TU is currently spending more than 30% of its budget on instruction. He didn’t dispute Hendricks’ data, but did question the significance.
By one measure of money spent on instruction employed by Hendricks, TU ranks ahead of Dartmouth, Princeton and the Massachusetts Institute of Technology.
On a scale of “academic efficiency” devised by Hendricks, TU is ahead of Stanford, Tufts and Harvard.
“That’s company I don’t mind keeping,” Buck said.
Hendricks, who has presented his findings both on campus and at downtown Tulsa’s Central Library, said he’s continuing to refine his model to allow for differences among institutions. And each time he does, he says, TU comes out near the bottom.
“Ultimately, I think what we have is the administration believes the best way to improve student outcomes at TU is to grow the administration and shrink the faculty, essentially, when research shows just the opposite improves student outcomes,” he said.
TU, in fact, has said it does not intend to eliminate faculty slots. And, instructional spending is one of the few areas in which the university has increased spending in the past two years.
The concern, however, is that recruiting and retaining top-notch professors in areas most affected by the reorganization will become more difficult.
“The thing that really worries me is that once these numbers are out there and people realize where their donations are going and where their tuition money is going it will really turn them off to future donations or even sending their kids to TU,” said Hendricks.