October 10, 2008

Higher-Education Groups Want to Watch Over IRS's Questionnaire for Colleges

Washington — Two higher-education associations plan to keep close tabs on a questionnaire that the Internal Revenue Service is sending to about 400 four-year colleges across the country.

According to a joint letter dated October 3 from the two groups — the National Association of College and University Business Officers and the Association of Governing Boards of Universities and Colleges — the IRS questionnaire is “ostensibly” an effort to learn more about how colleges and their foundations operate, and whether they are complying with laws covering tax-exempt organizations.

But, the two groups say, the effort is more likely to herald “a significant shift in the way colleges and universities are regulated and governed” and is “substantially more than a data-collecting exercise by the government.” The IRS’s goal, the letter says, is nothing less than a bid to “further regulate higher-education institutions,” including new rules, additional audits, and a new schedule for the Form 990, like that requested recently by Sen. Charles E. Grassley of Iowa.

Based on those suspicions of what the IRS is up to, the two associations are urging each college that receives a copy of the questionnaire to share its responses, in confidence. The two groups have engaged the accounting firm of Ernst & Young to analyze the responses. Based on that analysis, the groups will decide whether to issue a public summary and report of the aggregated responses.

Senator Grassley said today that if the colleges were sharing their responses with the higher-education groups, he’d like to see copies of the completed questionnaires as well. In a written statement, he said that independent groups, particularly those outside academe, “should have the ability to review the data and make their own conclusions,” and not just accept the findings of a “higher education group-funded study.”

Seven other higher-education organizations have endorsed the effort by Nacubo and the AGB: the American Association of Community Colleges, the American Association of State Colleges and Universities, the American Association of Universities, the American Council on Education, the National Association of Independent Colleges and Universities, the National Association of State Universities and Land-Grant Colleges, and the National Collegiate Athletic Association. —Andrew Mytelka

Comments

1. Higher education is one institution in the US that is still respected worldwide. In this respect, the Bush record is mixed; however, the IRS may be directed to finish the job that Spellings began.

   — David Ayers    Oct 10, 04:06 PM    #

2. NACUBO and the others would be better advised to work on ways to illuminate higher education finance for the public, rather than oppose efforts to use sunshine to disinfect shady practices. Foundations are too often used to do what institutions themselves cannot do legally, or at least publicly. Financial aid offices are notorious for keeping their information “proprietary.” It’s too bad that institutions don’t police themselves so these fishing expeditions by the IRS and Senator Grassley wouldn’t be necessary.

   — Public Administrator    Oct 10, 05:04 PM    #

3. Well now we know that it is a fishing expedition by the IRS and Senator Grassley, per Public Administrator

   — Ross    Oct 10, 06:32 PM    #

4. As an employee of an elite and rich private institution where the President and Finance Officer, in order to pay for increased costs such as a 4 million renovation of the President’s house and an unspecified salary to the “spouse of the president” for no responsibilities, subverted all restricted funds that came in towards general budget relief in the college rather than use the funds as specified by donors, I believe that more such scrutiny is essential. The finance officer in question is a member of the organizations above and will no doubt be shielded from scrutiny by his peers! The college also regularly sets its tuition increase with the goal of staying in the median of the tuition set by its peers; last year, after deciding on a 6.5% increase, on hearing about the government’s watchdog list for those who raised tuition by 6% or more, the president and finance officer promptly dropped the college increase to 5.9% in order to avoid scrutiny. Such practices will stop only through closer attention to presidents and practices at small private colleges and universities which frequently escape attention and play by their own rules.

   — Greyer    Oct 11, 07:50 AM    #

5. I would think that The Academy, which tends to the left and wants government to delve into nearly every nook and cranny of other folks’ lives, would welcome this oversight by the IRS.

   — Robert    Oct 11, 12:06 PM    #

6. As my old granny would say, “If you’ve done nothing wrong, you’ve got nothing to hide.”

   — Georgia    Oct 13, 06:54 AM    #

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