U of I says it has saved $26 million

A University of Illinois panel looking for ways to save money in the school’s administration is nearly halfway toward its goal of saving $60 million over three years, according to a report released Tuesday to The Associated Press.

The figures to be presented to the Board of Trustees on Wednesday detail $26 million in recurring savings stemming from changes in procurement, information technology and off-campus leasing, among other areas.

The savings program was launched in late 2009 as the university’s three campuses and hospitals struggle with less money and slow payments from the state, including $313 million still owed from the fiscal year that ended on June 30, officials said.

The goal has been to make the university’s administrative functions more efficient and less expensive so the money can be reinvested in academics, said Avijit Ghosh, special assistant to university President Michael Hogan for strategic initiatives.

“It’s not to say the university hasn’t been mindful of administrative costs, but now there’s a greater sense of urgency,” said Ghosh, who says he’s coordinating many of the cost-saving efforts.

More than half of the $26 million comes from centralizing how the university buys supplies, including copy paper to computers. Instead of colleges and departments ordering independently and submitting receipts for reimbursement, they can order from a central procurement portal run by the university that automatically subtracts the cost from their account. The portal system allows the university to buy supplies in bulk.

“Like our own little amazon.com,” Ghosh said.

Changes in information technology systems across the university’s hospitals and three campuses — in Chicago, Champaign and Springfield — make up the second-largest chunk of the savings, at $6.5 million. The IT departments have consolidated everything from the data centers that keep the school’s computers running to its email system, said Michael Hites, executive chief information officer.

The university has avoided layoffs as it merges functions and departments by incrementally reducing staff through attrition, officials said.

Another $1.5 million in savings came from a review of off-site leases that included bringing some offices on campus, consolidation and renegotiating leases, according to the report. And $3.2 million came from so-called shared service centers that have merged human resources and other administrative services that used to be done by colleges, academic departments and administrative units individually. The last $2.1 million came in general administrative costs.