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Priorities for Excellence: The Penn State Strategic Plan 2009-10 through 2013-14

Goal 7: Control Costs and Generate Additional Efficiencies
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Goal 7: Control Costs and Generate Additional Efficiencies

Penn State is a large, complex organization that is truly unique in higher education. As “one university, geographically dispersed,” it operates as a coherent whole with twenty-four individual campuses and a multitude of programs. By almost any measure, Penn State is one of the most efficient enterprises in higher education. The University continues to operate with fewer dollars per student than its peers in the Big Ten (within which Penn State’s appropriation per student consistently ranks last) and in Pennsylvania. Penn State’s 2007-08 income base per student of $18,010 compares with $19,620 for Temple and $20,370 for Pittsburgh, and our facilities and administrative cost rates (commonly referred to as the research overhead rate) of 47.5 percent compares to 51.5 percent for the University of Pittsburgh and 50.0 percent for Temple University. Penn State has achieved such efficiency by managing its resources carefully through reallocation of budgets and cost containment measures. From 1992-93 through 2008-09, Penn State recycled $173 million through internal budget reductions, reallocations, and cost savings initiatives. Even through years of budget recycling, Penn State has been able to build academic excellence, but resources that have been limited in the past may become even scarcer, and recycling decisions may now be impacting basic service levels and necessary capabilities.

The University remains strongly committed to ongoing cost containment efforts and one of the most effective continuous quality improvement programs of any university in the country. To maintain excellence in a time of decreasing resources, Penn State will require innovative and flexible programs and policies, careful review of resources and processes, and investment in our workforce.