Expecting cuts to its $332 million allocation from the state next year, the University of Connecticut is hiring a consultant to help it reduce costs.

“We think it’s very important we examine the expenses and income of the university… I am very optimistic that we will be able to save substantial dollars,” said Lawrence D. McHugh, chairman of UConn’s Board of Trustees.

He said he expects the consulting firm, McKinsey and Company, can find $50 million in savings within the university’s $1.03 billion operating budget.

UConn’s chief operating officer, Barry Feldman, said Tuesday he does not believe a complete review of the university’s expenses by an outside organization has ever been done. The review will cost the university $3.9 million.

UConn interim president Philip Austin: ‘This will not affect our academics’

“We need help understanding where some other savings and other revenue may be, because next year’s budget woes are coming very soon,” he said.

UConn has been spared from major cuts in recent years, largely because federal stimulus money the state received for education came with the requirement that it maintain current funding-levels for the university. But that protection expires come July, and the state is facing a $3.3 billion deficit.

If state lawmakers do decide to reduce funding, the university’s likely alternatives are to raise tuition and fees again or make major cuts.

“Things aren’t looking good,” said UConn’s interim president Philip Austin. He said McKinsey and Company will scrutinize almost all of UConn’s expenses without sacrificing the academic programs offered.

“This will not effect our academics,” he said. “If you want to have the trust of the legislature you have to show that you are spending the money well.”

Michael Kirk, a UConn spokesman, said two-thirds of the university’s budget will be reviewed – including spending on information technology, facility operations, administration and athletics.

UConn officials said the firms recommendations will given in time to be considered before the budget for the next fiscal year, which begins July 1, is adopted.

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