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Regents not doing enough to control college tuition increases, audit says

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Graduates attend the University of Utah's commencement ceremony at the Jon M. Huntsman Center on Thursday, May 3, 2018, in Salt Lake City.

FILE - Graduates attend The University of Utah’s commencement ceremony at the Jon M. Huntsman Center on Thursday, May 3, 2018, in Salt Lake City. The Utah State Board of Regents is not adequately controlling tuition increases at the state’s eight public colleges and universities, according to a legislative audit made public on Monday.

Jacob Wiegand, Deseret News

SALT LAKE CITY — The Utah State Board of Regents is not adequately controlling tuition increases at the state's eight public colleges and universities, according to a legislative audit made public on Monday.

The performance audit conducted by the Office of the Utah Legislative Auditor General says tuition has increased by nearly $132 million over the past five years.

"While those increases may have been justified … the (higher education) commissioner's staff could not produce any independent validation of the institutions' tuition requests," the audit states.

Moreover, the regents approved the increases with little documented discussion, describing it as a "superficial review" of proposed increases.

"The process for developing tuition increases, as overseen by the commissioner's office, provides little opportunity for the board of regents to provide input," the audit states.

Later in the day, auditors presented the audit to the Utah Legislature's Audit Subcommittee, which is made up of legislative leadership.

House Majority Leader Brad Wilson, R-Kaysville, expressed frustration over the audit's findings, remarking "I have seen a lot of audits in the time I've been here and this is one of the worst."

Of particular concern was a lack of transparency on the part of Council of Presidents, made up of the regent-appointed presidents of the state's public colleges and universities, which meets to develop tuition recommendations ultimately approved by the board of regents.

"Tuition increases over the past five years are almost three times what have been supported by only the legislative compensation match," the audit states.

Legislative appropriations generally cover 75 percent of the compensation increases extended to employees at state colleges and universities, leaving the system of higher education to fund the remaining 25 percent, primarily through tuition increases.

In 2015, 2016 and 2017, "the board of regents' first-tier tuition percentage increases were more than double what the appropriation match would have entailed," the audit states.

"Where is that money going?" Wilson asked.

Throughout the audit process, auditors were repeatedly told Utah has some of the lowest tuition nationwide, the audit states.

"Comparatively low tuition does not absolve the board of regents of its oversight responsibilities," the audit states.

A written response by Utah Commissioner of Higher Education David Buhler and Utah State Board of Regents Chairman Harris Simmons notes the board and the commissioner's office are concerned about rising costs of tuition and maintaining affordable access to higher education for Utah residents, which is part of the regents' strategic plan.

"We recognize that although Utah tuition rates consistently rank among the lowest in the nation when compared with other states, we still have work to do to ensure that we keep tuition affordable for our students long into the future," the letter says.

Appearing before the Audit Subcommittee, Simmons said the board will implement each of the auditors' recommendations, the vast majority within a matter of months. Legislative leaders said it is crucial that the auditor report directly to the board of regents.

The audit explains the process about how proposed tuition increases develop, with the regents granting final approval of both Tier 1 and Tier II increases. Second-tier tuition rate increases are for specific institutional needs and also require regent approval, although the audit found "second-tier tuition increases are not analyzed by staff" and these increases have totaled more than $30 million over the past five years.

As the process goes, the Utah Legislature appropriates funding to the higher education system. Next, the commissioner's office develops baseline recommendations, which are discussed by the Council of Presidents, the leaders of each of the colleges in the state system. The council and commissioner jointly develop the tuition recommendations that are forwarded to the regents.

"Board of regents do not participate in, or even attend, (Council of Presidents) meetings. In our opinion, the board should consider whether it will permit the commissioners to negotiate tuition increases with institution presidents without regent involvement," the audit states.

It also notes that no minutes of the council's meetings are kept.

In their written response, Simmons and Buhler said regent policy will be changed to require minutes of the Council of Presidents meetings be kept.

Moreover, commission staff will perform "periodic random testing of institutions' tuition request data," the letter states.

Their letter also notes ongoing work by the Kem C. Gardner Institute, which the regents authorized in May to conduct an external review of tuition and student aid policies.

"The board is actively engaged in re-evaluating its current tuition policies to ensure they reflect best practices in promoting student affordability and use of tuition revenues," the letter states.

The auditors "found a pattern of trust between the board of regents, the commissioner, and the institutions that, while important, appears to have led to tuition increases receiving minimal independent scrutiny. … We could find little evidence to support any rigorous analysis was happening at either the commissioner's or at the board of regents' level."

Wilson also took issue with the system failing to establish institutional targets identified in SB238, passed in 2017. It calls on the regents to "establish measurable goals and metrics and delineate the expected contributions of individual institutions of higher education toward these goals."

In the system's written response, Buhler and Simmons wrote there is ongoing work by the board of regents on developing system metrics with an expected January 2019 implementation date.

"The challenge with this is, what we're hearing is 'Trust us on this. We're going to keep working on this.' We've been hearing this for a long time," said Wilson, who carried SB238 in the Utah House of Representatives.

The committee voted to refer the audit to four legislative committees, including the Higher Education Appropriations Subcommittee and the Executive Appropriations Committee as appropriation requests are considered during the next legislative session.

"We're going to be asked to fund, I'm sure, a significant amount of new money for higher ed this year, whether it's in salaries, or new programs or new buildings. Right now, I'm not sure I'd be comfortable recommending any of those additional appropriations," Wilson said.