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Ohio State University Could Leverage Efficiencies and Process Improvements to Save $6.4 Million, Performance Audit Finds
Columbus – By optimizing use of printers and copiers; adopting consistent, efficient hiring and financial transactions processes, and moving computer servers to cost-effective data centers, The Ohio State University could save more than $6.4 million annually and better support its educational goals, according to a performance audit released today by Auditor of State Dave Yost.
If implemented, these recommendations would provide the university with a return on investment of $18.39 for each dollar spent on the audit.
While the scope of the performance audit was limited, considering the vast size of the university and its nearly $7 billion annual budget, it indicates that the data-driven analysis employed by the Auditor of State (AOS) could be applied throughout the campus to achieve other savings.
“The university’s governance structure provides a high level of autonomy, which serves the educational mission,” said Auditor Yost. “But such a system needs periodic review. Our recommendations can help the university unify and streamline processes and increase efficiency, freeing money for the core mission to educate the next generation of Ohio leaders.”
University officials volunteered OSU to be the first public institution of higher learning to receive a performance audit under a new provision in Ohio Revised Code § 117.46. That statute requires the Auditor of State to conduct performance audits of at least four state agencies each budget biennium. The new provision, created by House Bill 384 and sponsored by Reps. Tim Schaffer and Mike Duffey, allows the Auditor’s office to include a public higher-education institution as one of the four required performance audits by the Ohio Performance Team.
“We welcome this report, which supports Ohio State’s focus on operational excellence and resource stewardship,” said Michael Papadakis, Ohio State’s interim senior vice president for business and finance and chief financial officer. “In recent years, we have provided an additional $100 million in financial aid for Ohio students, using funds generated through efficiencies and innovative funding. This report will contribute to our ongoing efficiency work.”
Based on discussions with university leadership, the Auditor’s office focused the performance audit on the university’s use of computer servers, printers and copiers, and on the multiple systems used to hire and conduct background checks on employees. Auditor staff also agreed to analyze processes supporting the use of purchasing cards and reimbursements for travel expenses.
Auditors recommended that the university operate fewer specially equipped rooms for computer servers and move them to a more secure and cost-effective data center, such as the State of Ohio Computer Center. This could save an estimated $2,382,700 a year.
By eliminating excess copiers and printers and ensuring that all copiers and printers operate within the system maintained by the university’s printing contractor, auditors projected that OSU could save $684,700 a year.
The auditors made several recommendations associated with the new university-wide IT system that Ohio State is implementing to manage human resources, finance and student information.
They estimated that by eliminating the separate hiring systems found throughout the university’s divisions after the new system is launched, OSU could save $1,204,400 annually. By streamlining the system for processing purchasing-card transactions and travel reimbursements with the unified system, the university could save $2,076,300.
In addition, auditors found that OSU could revise the current background check administrative fee to recover the direct cost of the services, freeing as much as $90,600 for other purposes.
“This single, limited performance audit identified the potential for significant savings,” Yost said. “Applying the same techniques of analysis to scores of other university operations could yield even more. Every dollar saved makes the university more affordable for students and can be used to enrich their educational experience.”
In fact, prior to the audit, the University had taken such steps of its own, including several initiatives noted by AOS staff, including:
- The 2020 Vision, announced by OSU President Michael V. Drake in 2015, which has expanded student financial aid by $100 million through efficiencies and new resource generation. The university has achieved the $200 million new resource goal and is on track to surpass the $200 million efficiency goal by the 2020 deadline.
- The Operational Excellence at OSU program launched in 2012, which has trained and mentored more than 900 people, realized $41.2 million in saved and avoided costs, and eliminated more than 225,000 hours of work.
- Two projects aimed at reducing fleet size and associated costs. A project in the Office of Administration and Planning aimed to reduce fleet size by 53 vehicles, or 16 percent, and is projected to reduce annual operating costs by $740,000. The College of Food, Agricultural, and Environmental Sciences reduced its fleet by 22 vehicles, or 7.7 percent.
A full copy of this report is available online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 6,000 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.