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ASU responds to Goldwater Institute report

August 17, 2010

The Goldwater Institute report titled “Administrative Bloat at American Universities: The Real Reason for High Costs in Higher Education” by Jay Greene is seriously flawed at all levels, from the source of its data and the methodology that was used to the conclusions that it claims to have reached.

The standard English definition for administration refers to the management of an institution or organization. The federal database Greene uses to create his analysis (called the Integrated Postsecondary Education Data System, or IPEDS) clearly separates the two employee categories of Executive/administrative/managerial and Other professional (support/service). Greene attempts to mislead the public into believing that the university’s administration is “bloated” by combining these two categories and calling them administrators when that is not the case. “Other professional” includes staff whose primary responsibility is to support our students’ academic experience: academic advisors, financial aid counselors, career counselors, reference librarians, laboratory staff and literally hundreds of people who have nothing to do with the management of the institution. The effect is to inflate the number of staff categorized as administrators and distort the true picture.

The second flaw in the report is that by using a subset of the federal data, Greene was able to conveniently exclude technical, secretarial and service employees from consideration. The selected starting year was before the advent of the worldwide web and the widespread use of personal computers in higher education. The work world was a different place at that time, with secretaries providing support to faculty and students by handling routine typing and other general office work. Large numbers of positions in this category were eliminated as these tasks were absorbed by all staff members as part of the normal conduct of business. Excluding these positions from his dataset allowed Greene to conveniently ignore the fact that many of the positions that were added in institutional support were directly offset by reductions in clerical and other positions.

The third flaw in the report is that the author selectively chose his starting and ending points to magnify the increase in this category, which is more appropriately called institutional support. ASU’s institutional support spending in 1993 was significantly lower than in either the preceding or following years. Conversely, 2007 institutional support spending was significantly higher than the years preceding or following. The combined effect is to manipulate the data in order to show a greater increase than would have been possible with the selection of any other combination of starting and ending years in the last 20 years.

The fourth flaw in the report is that Greene selected a single data source, the federal IPEDS database. Although it is the only publicly available database, scrutiny of the data immediately shows inconsistency between universities and the way in which they account for different classifications of expenditures.  A researcher whose intent is to conduct a thorough and accurate analysis would have requested additional data and verified the accuracy of his information. At no point did Greene contact ASU to validate or further investigate the information contained in this database. As any stock or bond investor knows, a researcher who writes an opinion on the financial condition of an institution or corporation must use due diligence in the conduct and publication of his research. As any academic knows, a researcher who investigates and publishes on any subject is similarly obligated to use due diligence to verify the accuracy of his work and the validity of his findings. Greene met neither the standards of the financial markets nor the standards of his fellow academics.

The fifth flaw in the report is that Greene completely ignored output in his assessment. The university has two principal products, educated graduates and cutting-edge research. To assess only a subset of the inputs of a business without regard to the volume and quality of the products and services it produces is meaningless.

ASU is, in fact, one of the most efficient public research universities in the nation. It produces graduates at a cost that is 14 percent less than the average spending per degree at all public research universities and 30 percent less than that of its peers. Its sponsored research expenditures, which are a direct input to the state’s gross domestic product, have doubled in the last five years to more than $310 million.

The final flaw relates to the fundamental basis of comparison. As noted above, the world is a different place than it was in 1993, and today’s employers have different expectations when hiring new graduates. Many are looking for work experience that shows students can apply what they have learned in the classroom and work together in teams. International and/or service learning experience is oftentimes desired. Internships, community service, and study abroad programs provide this experience.

Many of these co-curricular learning activities – and these are just a few – do not fall under the typical instructional model, which assumes learning only takes place through an instructor standing in front of a classroom; yet they are vital to preparing our students for the global workplace that awaits them. As students receive more learning content and assistance on the computer, people providing computer support of the classroom learning system are counted as administrators by Greene. As ASU expands financial aid by hundreds of millions of dollars, the staff serving students’ financial aid needs are counted as administrators by Greene. As students get more services such as study abroad, internships, career placement and learning assistance, the staff providing the services are counted as administrators by Greene.

ASU is a free-market institution, competing for students, faculty, investment and research grants with hundreds of other institutions. As such, it is responsive to changes in the marketplace that impact its ability to deliver on its mission of service to the people of Arizona. If the university froze in time, continuing to operate as it did in 1993, it would be irrelevant and ineffective, like any other institution or corporation that refuses to grow and evolve. Instead, it has adapted and thrived, becoming one of the preeminent research universities in the nation, contributing more than $4.4 billion each year to the Arizona economy along with tens of thousands of jobs and more than 15,000 new graduates each year. While we thrive on challenge and value feedback and criticism, such criticism should be based on truth, not the disingenuous misinformation presented in this report.