Ohio University exceeds state’s expectations for savings in upcoming Affordability and Efficiency report

Ohio University has implemented a series of cost reductions, new revenue generation, and policy and process improvements that will create an estimated $220 million in savings or avoided costs, reductions in expense, and growth in revenues over a five-year period that started in Fiscal Year 2017, according to estimates being prepared for submission to the Ohio Department of Higher Education.

Each public university in Ohio is required to annually report its affordability and efficiency efforts and projections to the Ohio Department of Higher Education, which in turn is required to create a statewide report by Dec. 31 each year. The report is based on the recommendation of former Gov. John Kasich’s Task Force on Affordability and Efficiency in Higher Education.

The largest projected savings are from the multi-year benefit of: organizational restructuring ($75.8 million), innovative and collaborative procurement activities ($49 million), management of health care costs ($25.9 million), and the review of University assets ($24 million).

“Ohio University has worked hard to tighten its belt by reducing expenses where possible, reviewing our assets, and making strategic investments that combine to improve the University’s financial picture,” Senior Vice President for Finance and Administration Deb Shaffer said. “While the formal review was mandated by the state, most of these initiatives were already underway within the University.”

To achieve the savings, cost reductions and new revenue, Ohio University engaged in a number of activities, including:

• OHIO collaborated with the Inter-University Council of Ohio and the rest of the state’s public universities to establish preferred vendor contracts to secure volume-purchase savings statewide. Ohio University was recently the lead institution on a travel RFP as part of this initiative.
• OHIO assessed organizational structures to gain efficiencies and reduce costs, including targeted, permanent, administrative and academic budget reductions.
• The University launched initiatives to negotiate textbook costs and develop digital capabilities to cut students’ material costs. Inclusive Access, a low-cost course material initiative with current projected savings to students of $6.4M over the five-year period, has the potential for exponential growth in savings for students with more wide-spread adoption. OHIO’s Open Educational Resources partnership with TopHat has saved students an estimated $1 million and has potential for significant future growth.
• OHIO created a projected $9M in net revenue generation over the five-year period through new professional and online programs.
• The University contained and drove down escalating costs of health care by implementing recommendations from the Benefits Advisory Committee, reducing the rate of increase in University costs to below the healthcare industry inflation since FY16.
• The University conducted operations reviews, including: lean process improvement studies; the coordination of maintenance operations with the City of Athens to achieve volume savings.
• OHIO’s real estate office has evaluated development possibilities in several areas, including the strategic sale of land. The University also received $18.4 million as part of an FCC Spectrum Auction for WOUB.
• The University’s evaluation of opportunities for partnerships and sponsorships at all of OHIO’s locations across the state resulting in the creation of the Corporate Engagement Task Force, a new partnership in the Russ Research Center in Beavercreek, and real estate and program partnerships in Dublin.
• OHIO sought and refined sustainable methods to cost-effectively procure and use energy.
• OHIO also developed plans to redeploy faculty and share course delivery across OHIO’s regional campuses.

All savings and projected savings are calculated with a focus on maintaining OHIO’s high quality educational experience for all students, while keeping the cost of college affordable for students and their families.