Cost-containment committee to review and approve UM spending


From new paper clips to new hires to new buildings, the University of Miami has established aggressive cost-reduction policies as a way to deal with the world financial crisis.

“In this one, cash is king. We have asked everyone to eliminate all unnecessary spending – from snacks, to paper, to travel. It is the little things that add up to big dollars,” President Donna E. Shalala said in a e-mail to the university community on Jan. 16.

She also said in another e-mail, “Overreacting is an important strategy in a crisis. My mindset is that we always have to do more than necessary during any kind of financial crisis.”

Shalala announced the creation of a senior management committee to review all requests for new funding that had not been already accounted for in the new cost-containment policy. The committee is composed of Provost Thomas LeBlanc, Miller School of Medicine Dean Pascal Goldschmidt, and Senior Vice President of Business and Finance Joe Natoli.

“We’re taking a hard look at how we’re spending our money today but in particular we want to set up controls on decisions made to spend additional dollars in the future,” said Natoli in an interview with The Miami Hurricane.

The committee set a low threshold of $2,500 for spending requests. According to LeBlanc, this number was based on previous university project funding, the endowment and the budget for the current fiscal year.

The committee meets every two weeks – the last time was Thursday – and has already reviewed dozens of requests from all segments of the university, which include hirings, capital projects and salary increases.

Each of the three men has a subcommittee that reviews all spending requests in their area of jurisdiction. The subcommittees can approve some requests on their own. For large items, they pass it along to their boss who reviews it and decides whether to bring it to the full management committee.

Natoli said that requests for new personnel are dealt with on a case-by-case basis, where the board decides whether filling the position is critical to maintaining the quality of the institution. In many cases, vacant positions are encouraged to be filled by absorbing the work among other people in the department.

In the board’s first meeting, for example, a request was approved to hire 85 new nurses to work at University of Miami Hospital because they were needed for patient care. Natoli said they decided direct hirings would be more economical than contracting out the work.

Capital projects and renovations have also been delayed with some exceptions. The baseball stadium expansion and the construction of the new alumni center have been allowed to continue as they were well underway before the new policies were put in place.

“We have delayed most capital projects that didn’t already have a shovel in the ground,” Natoli said.

LeBlanc acknowledged that some of the building delays, such as the new University Center, would directly affect students, but he said that the committee hopes to get those projects back on track as soon as possible.

The committee is expected to remain active until May 31, the end of the current fiscal year.