WILLIAM G. HOLLAND
Legislative Audit Commission Resolution 108
LAC Resolution Number 108 directed the Auditor General to conduct a management audit of tuition and fee waivers granted to students attending the States public universities.
Tuition revenue in fiscal year 1996 for the States nine universities was $507 million, of which $117 million (23 percent) was waived. The total number of waivers was 40,752. In addition, universities waived almost $5 million in fees.
Although State universities waived more than one-fifth of total tuition revenue during fiscal year 1996, no formal study of the impact of tuition waivers on tuition costs has been made. Responses to our survey of public universities and IBHE differed on the effect that reducing or eliminating tuition waivers could have on tuition rates for paying students.
The audit makes ten recommendations to improve the awarding, management, and reporting of waivers.
State universities granted 40,752 waivers worth $117 million in fiscal year 1996
Graduate waivers were $94 million while graduate tuition revenue was $71 million
Few selection criteria for awarding waivers existed
records were incomplete
The nine State universities waived over one-fifth (23 percent) of all tuition charges in fiscal year 1996 (see Digest Exhibit 1). Total tuition charges were approximately $507 million, of which $117 million was waived resulting in $390 million in tuition revenue. The total number of waivers granted in fiscal year 1996 was 40,752. In addition, universities waived almost $5 million in fees.
State universities internal and external accounting for the dollar amount and number of tuition and fee waivers was inconsistent and contained errors. Figures reported by universities to the Illinois Board of Higher Education (IBHE) in its waiver report form differed from those reported for the audit. In addition, universities had difficulty providing us with documentation to support their waiver data. Among universities, criteria for categorizing waiver programs differed, cut-off dates for reporting waivers by fiscal year varied, and methods for determining the number of waivers were not uniform.
We recommended that IBHE establish consistent and uniform methods for universities to report tuition and fee waivers. We also recommended that universities keep accurate information on each waiver program. (See report pages 9-20.)
Of the $117 million in tuition waived, approximately $106 million (91 percent) was granted at the discretion of the individual universities ("institutional waivers") and $11 million (9 percent) was for programs established by law ("statutory waivers"), as shown in Digest Exhibit 2.
Digest Exhibit 3 shows the programs that waived the most tuition. (Report pages 9-11.)
Institutional waivers included graduate assistants, athletic, academic, faculty and civil service waivers. Undergraduate institutional waivers were generally limited to a percentage of undergraduate tuition, as established by IBHE policy.
State universities management of institutional waivers was decentralized and often delegated to individual academic departments without specific guidelines or criteria. One-fourth of the institutional waivers in our random sample lacked complete records of the award process (see Digest Exhibit 4). Missing documents included applications, selection criteria and decision records.
Some statutory waivers were not granted in accordance with applicable State law. For instance, universities exceeded the maximum number of ROTC waivers authorized by statute, some tuition waivers were granted to children of employees who had not been employed by the university for the minimum number of years specified by law, and some recipients of General Assembly waivers had addresses outside the awarding legislators district.
We recommended that universities comply with applicable statutes, as well as maintain complete selection records on each individual awarded a statutory tuition waiver. (Report pages 21-38.)
Overall, there were few Statewide requirements and controls over the types and amounts of tuition waivers that State universities could grant and over the administration of these programs. Consequently, many inconsistencies and variations in waiver programs were found.
We recommended that each university establish a comprehensive tuition and fee waiver policy and that the IBHE assist in coordinating the development of these policies to ensure consistency among State universities. We also offered a Matter for Consideration by the General Assembly that it may wish to establish a Statewide tuition and fee waiver policy to address such issues as waiver limits, record-keeping, management controls, and reporting requirements. (Report pages 61-79.)
From 1990 to 1996, the amount of tuition waived by State universities increased 27 percent for undergraduates and 74 percent for graduate students. Tuition charges increased at a higher rate (42 percent for undergraduates and 35 percent for graduate students) than the Higher Education Price Index (which increased 23 percent).
Although State universities waived more than one-fifth of total tuition revenue during fiscal year 1996, no formal study of the impact of tuition waivers on tuition costs has been made. We surveyed IBHE and the States universities to determine the impact of tuition waivers on tuition rates for paying students. Several universities indicated that tuition waivers have little or no effect on tuition rates, although the IBHE and one university stated that tuition rates could be lowered if tuition waivers were eliminated and other factors, such as attendance, remained unchanged.
The audit offered a Matter for Consideration by the General Assembly that it may wish to consider requiring public universities to report annually on the need and purpose of each waiver program, eligibility and selection criteria, cost and any benefits resulting from the program. (Report pages 51-59.)
The audit report includes ten recommendations to State universities, the IBHE, the State Board of Education, and the Department of Children and Family Services to improve the awarding, management and reporting of tuition waivers. The universities and agencies generally concurred with the recommendations. Their responses are excerpted in the report and reproduced in their entirety in Appendix K.
This report is accompanied by a Supplement which contains more detailed information pertaining to each individual State university.