Higher Education Needs an Audit

column | Higher Education

Higher Education Needs an Audit

By Michael B. Horn (Columnist)     Mar 28, 2019

Higher Education Needs an Audit

In the fallout from the college admissions scandal, one striking element has been the absence of checks and balances in the system.

As Jon Reider, a former Stanford admissions officer from 1985–2000, said on the To The Point podcast, “There is a surprising amount of trust in the whole admissions world.”

Surprising indeed. Reider said that while he was an admissions officer, they would catch someone fabricating significant details about themselves in an effort to gain acceptance once every two years or so.

But as Jeff Selingo wrote in The Atlantic, “Admissions counselors are not hired to be detectives.” At some elite colleges, applications are reviewed in eight minutes or less. The chances of catching larger problems are scant.

Although one might trust that coaches would not push to accept students who did not play the sport they coached—thereby losing talent on their team and, theoretically, hurting their team’s chances to win—that’s evidently a false assumption (including the bit about hurting a team’s chances to win, as shown by Yale’s women’s soccer team making the NCAA tournament).

Given the stakes riding on admissions decisions for elite universities—with the sorting and signaling function they play in society more broadly—you would think that elite colleges would use internal auditors to ensure that there are controls in place to, as Ryan Craig wrote, “maintain and enhance the trust.”

You would be wrong. In the aftermath of Operation Varsity Blues, it’s time for institutions to implement an audit process so that admissions officers don’t have to be superhuman and make up for the vulnerabilities in the system.

Yes, audits can be clunky. Nor does their presence mean everything will be caught. But by checking whether there are strong internal controls in place, and even going the extra step to spot check the veracity of details on a representative sample of admitted applicants each year, they can be very useful in catching larger systematic problems.

These problems aren’t just evident in the admissions process in higher education. They also exist in the reporting that colleges and universities do for rankings like U.S. News & World Report. Last year, several institutions, headlined by Temple University’s Fox School of Business, were caught submitting incorrect data to U.S. News & World Report. In the case of Temple, it was clear that the school had submitted false data over several years in an effort to game the rankings.

This potential for bad actors to take advantage of trust in a system is one reason why if and when higher education institutions begin reporting outcomes more consistently, they should consider doing so with an external audit process that mirrors much of the controls that the Sarbanes-Oxley Act put in place for publicly-traded companies.

Given the numerous ways that people use this information—from students to regulators to rankings publications—there is too much incentive for manipulation to not have auditors check a school’s reported outcomes.

Of course, if Congress passes the proposed College Transparency Act that would allow the federal government to connect higher education enrollment records with earnings data, then institutions would not be on the hook for reporting certain outcomes. On the one hand that would reduce the need for auditors.

But many colleges protest that their value to students and society isn’t just measured by earnings. As a result, if the College Transparency Act—or something similar—becomes law, colleges might have an even stronger incentive to report out on more holistic outcomes—things around learning, student happiness and engagement, and the like—if colleges deem them as valuable parts of the overall outcomes they produce for students.

Considering that families were able to pay to fake their children’s standardized test scores, an audit would become even more important in the context of reporting learning outcomes within colleges where there are even more opportunities to fabricate the results on everything from projects and papers to portfolios and tests.

Already today colleges that accept federal research grants often comply with audits to ensure proper usage of those funds. In the wake of the college admissions scandal, those same colleges ought to voluntarily start using audits for far more of the critical parts of their operation that rely on trust.

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