University of Minnesota administrative costs: Does this seem like sleight of hand?

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Restoring trust is the first step in convincing state legislators to invest in the University of Minnesota ("U leader faces tough tasks in a short time," Aug. 23). This begins with providing accurate information to the public.

The letter from the university senior vice president published on July 26 omits critical information necessary to understand the impact of the new definition of "administrative costs." The letter fails to inform the public that the new definition is far more limited in scope than the internal definition used for the past decade.

For fiscal years 2012 through 2021, the university administration prepared and published the Administrative Cost Benchmarking Report. The report includes an expense summary that shows the dollar amounts for each line in each expense category. The university administration defined "administrative costs" as the combined costs for the leadership and oversight category and for the mission support and facilities category.

The newly defined "administrative costs" are now included in the new category of "administration." The new definition in effect limits the expenses to those included in the old leadership and oversight category plus a few (unspecified) expenses in the old mission support and facilities category. With this new definition the administration calculates the costs of administration for fiscal year 2021 to be $433.4 million, or 11% of total expenditures.

Now consider the calculation for the same fiscal year of 2021 under the Administrative Cost Benchmarking Report. The amount for the leadership and oversight category is $310 million. The amount for the "Audit/Finance/HR/Info Tech/Legal" item in the mission support and facilities category is $205 million. So the total of $515 million for the leadership and oversight category plus just one item from the mission support and facilities category is greater — much greater — than the total of $433.4 million for "administration" under the "new analysis" of the university administration.

The total amount of the costs of administration for fiscal year 2021 is almost $1 billion (almost 27% of the total university expenses of $3.7 billion). This calculation excludes all the expenses in the mission category (instruction, research and public service). It also excludes the expenses in the mission support and facilities category for student personnel, campus operations, the costs of facilities (repairs, utilities, etc.), leases and debt service. It includes the remaining expenses in the mission support and facilities category and all the expenses in the leadership and oversight category. The aim is to include only those expenses that should be classified as administrative costs.

Michael W. McNabb, of Lakeville, is an attorney and a University of Minnesota alumnus.