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UT Chancellor McRaven faces unfamiliar scrutiny in last year of his contract

University of Texas System Chancellor Bill McRaven is facing new questions from his board of regents about spending and staffing levels, which come as he nears the end of his three-year contract.

UT System Chancellor William McRaven at a Texas Tribune event on Feb. 5, 2015.

Retired Navy Admiral Bill McRaven had a grand vision when he took over as chancellor of the University of Texas System in 2015. 

The 14 universities and medical schools that he oversaw would improve "the human condition in every town, every city, for every man, woman and child” in Texas, he said. And the system would do so by completing nine “Quantum Leaps,” the list of which he unveiled in an enthusiastic presentation to the system’s board of regents less than a year into his tenure.

The board seemed to love the ideas and responded by setting aside $60 million to achieve those goals.

But now, less than two years after it was unveiled, the system's governing board is questioning that vision. They are asking whether the system administration under McRaven is overstaffed, overspending and overreaching. In the coming months, the UT System Board of Regents plans to re-evaluate the system's mission and consider some changes, its members have indicated. 

Those discussions will come at an important moment in McRaven's tenure as chancellor. The man known nationwide as the architect of the Navy SEAL raid that killed Osama bin Laden will see his $1.2 million-per-year contract expire around the turn of the year. While the board evaluates the system's priorities, McRaven's future will have to come up for discussion, too.

McRaven declined an interview for this story. But publicly, he has kept a confident tone. He has admitted some mistakes but has still pushed an ambitious agenda. Last week, he announced that system offices have eliminated 115 jobs in the past six months, a sign he may be working to address the board’s frustration.

Some regents, it seems, want more.

"There is a very expensive and top-down architecture" at the system, Regent Janiece Longoria said at a board meeting last week. "I disagree with that [vision] of the system."

New regents bring new questions

Two new regents — Longoria and former Republican state Sen. Kevin Eltife — have led the charge to look at growth at the system's administrative offices.

They have questioned why staffing levels are significantly higher now than in past years, even with the recent cuts. Meanwhile, the budget for the system's administrative offices has more than doubled from $57 million in the 2015 fiscal year to $143 million this year. Several regents have said they'd rather see those resources passed on to the individual schools, not system administrative offices, especially during times of state funding cuts.

Some of those increased expenses come from efforts to consolidate jobs that had previously been done at individual campuses. For instance, audit costs at the system level have gone up millions per year since 2014 because the system moved campus auditors under the system's umbrella. (Regents voted last week to undo that consolidation and move the auditors back to the campuses.)

But a lot of the growth has come from new initiatives. Since 2013, the system, with board approval, has spent tens of millions of dollars on a competency-based learning initiative and a program called the Institute for Transformational Learning, both of which UT System leaders say are devoted to finding new ways to deliver higher education. 

Those projects had the support of regents when they were created but now are being scrutinized. At recent meetings, the board has made it clear that it plans to rein in some of the initiatives that McRaven has championed. 

In April, regents convened a conference call to approve some seemingly mundane measures. One was a $3.2 million budget change order for the Institute for Transformational Learning, which is working to develop online learning software. System officials said the change order was needed to pay a third-party company for additional software development services.

The project had hit some road bumps, McRaven said, but was on track to do "something very important in terms of how we are going to deliver educational content."

Normally, such an item would be approved without much discussion. But Eltife and Longoria had concerns. Years had passed since the project began, Longoria said, and tens of millions of dollars had been spent. The system could have saved time and money just paying for some software off the shelf, she said.

"I don’t believe that we have the luxury of being able to spend this kind of money on a future learning environment when our current learning environment is taking such a hit," she said.

Later, she added, "I think we have been very inefficient in the way we have approached it."

When it came time to approve the change order, none of the regents spoke up to make a motion. The item appeared to be about to fail. McRaven stared silently at the table in front of him and shook his head.

Then, his staff told the regents that years of work and millions of dollars could be lost if the change order weren’t approved. The board reluctantly signed off — but only on the condition that there’d be a more thorough review of the Institute for Transformational Learning’s spending.

More dissatisfaction was evident at the next meeting. During a broad discussion about budget priorities, several regents — new and old — lamented the growth in the system’s staffing and spending. Then, they committed to re-evaluating priorities in the coming months. The implication, it seemed, was that several regents wanted to go through the system's administrative offices budget with a fine-toothed comb.

"We will have a robust discussion about the function and mission and direction of the system in June," Board Chairman Paul Foster said.

How that will affect McRaven’s “Quantum Leaps” is unclear. Those include initiatives to turn the system into a leading force in national security research and a project "akin to the Manhattan Project to understand, prevent, treat and cure the diseases of the brain.”

In an e-mail Wednesday, system spokeswoman Jenny LaCoste-Caputo said that McRaven “is looking forward to a broad, candid and open discussion this summer” about system priorities.

“This will include [a discussion about] activities occurring under the Quantum Leaps initiative — how they might be prioritized now that some are in full implementation, which ones should be deferred while we focus more immediate attention on others, which ones might be best led by a UT institution and which might be considered completed and closed out,” she said.

LaCoste-Caputo added that McRaven believes the system should be “nimble and flexible, ready to adjust to current conditions.”

“We understand that current conditions will always influence priorities and trajectory and, according to Chancellor McRaven, those types of factors are precisely why we must not be rigid in executing a plan — we must be ever evolving,” she said.

Quantum Leaps

One of the main things driving regents' worries is politics. University leaders across the state say this has been a rough year for higher education in the Capitol. Few have felt that more than McRaven. 

The most high profile of the “Quantum Leaps” he advocated for at UT was a plan to expand the system's presence in Houston by purchasing more than 300 acres for a future collaborative research campus in the city. 

The blowback was immediate. Houston-area legislators believed the plans would encroach on the hometown University of Houston. And lawmakers across the state were incensed that McRaven hadn't consulted with them before he announced the plan.

Nonetheless, McRaven moved forward, spending $215 million on the land. That led to some tense hearings in the Capitol, during which lawmakers also chastised UT System leaders for the cost of their new downtown Austin headquarters and more than $1 million that had been devoted to marketing the system.

 “It looks to me like an entity that has a lot more money than they know what to do with,” Senate Higher Education Chairman Kel Seliger, R-Amarillo, told McRaven in January.

In March, McRaven killed the Houston project. Some people worried, however, that the damage was already done and the system may have lost some credibility to argue against major budget cuts for its universities.

Meanwhile, some powerful alumni and system leaders privately questioned McRaven's political strength. Unlike many other chancellors in the state, the career Navy man entered the job without strong relationships with current government leaders. And he isn't known to relish or thrive at the glad-handing that is often required of the leader of a Texas university system.  

"I was in the Legislature for 12 years, and from my standpoint this is one of the low points of the relationship between the UT System and the Legislature," Eltife said. 

That's not to say that McRaven is unpopular. He maintains a strong relationship with Republican House Speaker Joe Straus. And even his critics express a deep admiration for his leadership abilities, especially given his past.

House Higher Education Committee Chairman J.M. Lozano, a Republican from Kingsville, said he thought it "took a lot of character" for McRaven to reverse course and admit a mistake with the Houston plan. And Lozano said McRaven has proven willing to mingle with lawmakers and students alike, showing a humbleness that tears down the image of university leaders isolated in an ivory tower. 

"He has been a huge blessing for higher education in general," Lozano said. 

But with time winding down on his contract, it's unclear how McRaven sees his future. A lot could depend on the direction the regents choose to take the system — and whether McRaven is on board. 

"When this board coalesces around a mission statement and the budget, the issue for me will be how he carries that out," Eltife said when asked to assess McRaven's performance. "If we give the direction that we want to downsize the system, it will be his job to carry that out."

So far, McRaven isn’t talking much about new directions. During a speech to a UT System donor group called the Chancellor's Council last month, McRaven declared the state of the system "incredibly strong." And he remained committed to his most of his "Quantum Leaps," minus the failed Houston project.

"To be a great system, we must — we absolutely must — take on the difficult challenges of the day," he said.

Read related Tribune coverage:

  • State budget negotiators turned their focus to higher education funding Wednesday as they neared a deal on the state's two-year spending plan. 
  • University leaders across the state are worried about a perfect storm of cuts this session.

Neena Satija contributed to this article.

Disclosure: Paul Foster, the University of Texas System, the University of Texas and the University of Houston have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors is available here.

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