II. Summary of Findings

1. Gross Cost Saving

Under the assumptions detailed below the maximum University budget impact resulting from the elimination of the Graduate School and distributing the administrative functions to other units total is a $245,628 gross reduction in University budget.

2. Net Cost Impact

To arrive at the net impact on University budget we must adjust the gross reduction by the cost of assigning the functions currently performed by the Graduate School to other units. We estimate this cost shifting using four alternative methods detailed below. The results of the analyses are as follows:

Method 1: Cost Allocation. The net impact on University budget is increased cost by $70,323.
      

Method 2: Functions Analysis. The net impact on University budget is increased cost by $389,061.
      

Method 3: Comparative Data. The net impact on University budget is increased cost by $260,034.
      

Method 4: Extrapolation. The net impact on University budget is increased cost by $587,896.

It should not be surprising that the cost of decentralized administration of graduate programs exceed the cost of a centralized office. A centralized office allows for economies of scale. It is because of this that the vast majority of universities in the U.S. do have centralized administration, and those that have decentralized administration have  graduate programs in each discipline large enough to realize the benefits of the economies of scale.  Some universities that moved from centralized to decentralized administrative structures reverted later to the centralized model according to the paper by Beere cited above.

3. Other Costs

In addition to these net financial costs there are non-monetary costs resulting from the reduction in the quality of service to the graduate students, and these should be considered in making decisions regarding the administrative structure. Centralization of the functions allows for division of labor and specialization among staff resulting in each member of the staff developing the knowledge and expertise that would not be possible if a part-time staff person in each department or college has to handle all of the different functions³.

Furthermore, consistency in applying the standards and uniformity in the treatment of students are less likely with the multiplicity of administrative loci, as each unit’s interpretation of the standards and processes will likely be different from others. The lack of consistency and uniformity in applying the standards increase the likelihood of grievances and legal challenges to administrative decisions. Experience shows that adjudicating grievances and litigation can be costly to the university. While we do not have data at this time, it is possible to collect data on the frequency of adjudicating grievances per 1,000 graduate students in centralized and decentralized systems.

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