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The Honolulu Advertiser
Posted on: Thursday, February 7, 2002

UH fires consultant over report

By Beverly Creamer
Advertiser Education Writer

Disappointed with the financial report presented by the New York consulting arm of PricewaterhouseCoopers, the University of Hawai'i has severed its relationship with the accounting firm and undertaken an in-house overhaul of its complex and archaic finances.

It's one more indication that UH President Evan Dobelle won't take quick and easy answers in sorting out a system that defies both. And it's clear that even a big East Coast firm will come in for tough scrutiny if it doesn't produce.

Calling the PricewaterhouseCoopers suggestions "cookie-cutter solutions," the university's chief financial officer, J.R.W. "Wick" Sloane, said they included such ideas as "firing a bunch of secretaries."

Greg Lozier, lead man on the project for PricewaterhouseCoopers in New York, did not return phone calls from The Advertiser.

"The main problem is that the final report was late," said Sloane. "It was supposed to be ready for a presentation to the regents in January, and we had to pull that off the agenda because it wasn't ready.

"Chapters came in bits and pieces, and we ran out of time to keep working with them. It was a day late and a dollar short, and it's time to get on with it ourselves."

The relationship began last summer, not as an audit but a consulting project, or a "tough investigation" to free up money for faculty salaries, said Sloane. But after Sept. 11, the objective changed to dealing with projected budget cuts.

The report offered several other suggestions, none of them original, though some had merit, said Sloane. They included restructuring some academic programs, redefining the university's relationship to the community colleges, and consolidating similar systems.

Administrators have been looking at those areas, he said.

In terms of consolidating, "We need to find the money to do that, and we're looking at that," Sloane said.

With PricewaterhouseCoopers out of the picture, Sloane has appointed a task force headed by Eugene Imai, senior vice president for administration, to come up with better ideas — in three weeks.

The group is holding daily meetings and Sloane said, "I think they're going to come up with good stuff."

The university has asked the Legislature for the opportunity to complete its internal management review and strategic planning before detailing budget cuts. A hiring freeze is in place and analysts are looking for ways to make further administrative savings. Cuts of 5 percent — the Legislature has asked for impact scenarios for cuts ranging from 3 to 5 percent — would amount to more than $14 million, which would likely eliminate classes, end programs and reduce student access to higher education.

Already Hawai'i is at the bottom nationally when it comes to receiving public money for higher education, said Sloane. According to a recent study by the Lumina Foundation for Education, over the last 10 years the average increase in state support nationwide has been 59.1 percent.

In Hawai'i the increase has been 2.9 percent.

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.