I had heard the stories from other state auditors about the resistance of universities to their recommendations. They’re fittingly called “ivory towers” and they aren’t conciliatory. Nonetheless, in Oregon they depend upon a large-but-declining supplement from the state budget to operate and maintain their often-claimed standing among the top universities in the country.
I had a good working relationship with the university auditors. They operated out of a central chancellor’s office which oversaw the seven campuses. The audits they conducted were largely compliance-related. My view was that every state agency should also be subject to review to see what they accomplished with state dollars. In addition, the costs of our audit office were apportioned out across all state agencies. Although universities were getting their annual financial statement audited by us, they’d never received the benefits of a performance audit.
During my time we produced two university audits, one examining faculty workload, and the other looking for ways to control the cost to students while improving student outcomes. I went to a couple of entrance conferences to explain our audit stages and processes. Of course, we always asked what they would be interested in having us look at. One suggestion stands out in my mind.
One president said they had just completed a major overhaul of their livestock program and thought it would be useful for us to review their new activities. I had a standard joke in auditor training that when a manager suggested an audit topic “out in the north forty acres” that it generally meant they were diverting you away from their core responsibilities. This president’s idea of sending us out to work in the stables sounded diversionary (and Herculean). I told the president that we would take it under consideration. It was obvious that he perceived us as compliance auditors like the university system auditors, so I knew that our performance work might be surprising to them.
We had our own surprises. The universities were a different culture than other state agencies. The larger universities lacked any lines of accountability from the president to faculty. In practice, presidents had little authority over faculty, which directed efforts at a variety of indeterminate activities. In addition to teaching and consulting with students, some faculty time was taken up by research. This was for the purposes of staying current on teaching topics, getting articles published or obtaining funded research. Faculty was also expected to spend time on “service,” which could be work in the community or serving on a faculty committee. Beyond the number of papers published, there were no workload and outcome measures we could imagine for these activities. As state funding diminished over the years, student tuition increased. This, to my mind, should have put teaching as the high priority.
The smaller teaching universities had a unionized faculty with established minimum course loads for each faculty member. However, course workloads for faculty members in the larger universities were not established or consistently tracked. We were told that the department chairs monitored workload, though for one university the chairs were assigned on a rotating basis among the department faculty, providing a disincentive to upset the applecart of collegiality.
Resistance to change was embedded in the institution and its culture. Many decisions required buy-in from a faculty senate, and then only after considerable debate and deliberation.
During our work we heard some faculty ask about our level of education, as if our questioning the work of PhDs was imprudent. We recommended that they set workload expectations and begin tracking workload activities; that they incorporate workload considerations in faculty performance evaluations; and that they address courses that were in low demand or forced to turn students away because of high demand. We received a courteous promise to consider these recommendations.
Our second audit was entitled “Oregon University System: Opportunities to Control Costs, Improve Student Outcomes, and Clarify Governance Structure.” The scoping during the faculty workload audit had given us many potential audit topics and we covered most of them under the “cost of a degree” idea. We reported on the long-term decline in state funding that required the tuition increases. We were concerned about thecost of a college degree, but just as importantly, the cost burden for students who dropped out—or to use the universities’ euphemism, “stop out”—with no degree and, likely, unavoidable debt.
We expressed concerns about the dependence on tuition revenues to pay new construction debt, and noted a flattening of enrollment that dovetailed with the ending recession as prospective students chose workforce opportunities over more education. We questioned the universities’ claims about their high rankings as research universities. We also pointed out the universities’ lack of accountability within the state structure.
We got more engagement on this audit and they added over one hundred footnotes in the review draft to discuss. A half-dozen representatives of the universities participated in that call-in discussion and there were occasional bursts of fervent disagreement. Their response clearly indicated where they accepted—or, more often, disagreed with—our recommendations. Perhaps the audit reshaped their approach to some aspects of college costs, though I wondered aloud to the audit team how universities could ignore the lessons about sound management taught in their own public administration programs.
Soon after though, their big accomplishment was to break off from the state and its administrative requirements, which they claimed would reduce their costs. They dissolved the central chancellor’s office and each university began operating independently. The strictures of accountability were gone, except they still needed an audit of their financial statements. They agreed to pay the state audit office for the annual financial audit but we needed to negotiate the cost of any other audits—meaning performance audits—in advance of the biennial budget process. When I asked what our relationship was like to them, I was told to treat them like a local government. A local government has its own accountability mechanisms, starting with elected leadership accountable to the public, which a university lacks. I did not try to negotiate for any audits with each of the universities in my last budget because it required a forecast of some general topic two to three years in the future. I expect that long-term this will be a challenge for future auditors.
I also expect that auditors will be called upon in the future to address universities facing financial difficulties. Because many smaller universities serve as economic drivers across the state, their alumni and legislators will defend their heavily subsidized existence. Debt caused by classrooms and housing will grow as enrollment declines. The alternative of online education will undermine universities across the country. After all, what student would choose to pay tuition for a local, unknown professor over a highly respected one when they are both available on a computer screen?
I valued the rich educational and cultural environment I experienced at university, and that will be difficult to preserve, especially as states have cut back on the heavily subsidized costs of colleges in the 1960s. Universities will be forced to rethink their education model, and what to do with their campuses. Whether their weak-leader organizations are prepared to meet those challenges is another question.
