‘Red flags’ in higher education finances
The US tax authorities, the Internal Revenue Service (IRS), recently conducted a survey of higher education institutions in order to ascertain how well their finances are being managed. The conclusion was, on the whole, positive, and the IRS found that the institutions were prudent and responsible with the resources at their disposal. But the report does identify some ‘red flags’: chiefly these were concerned with the remuneration of management officials and some top academics, as well as the benefits made available to athletics coaches; but another concern was related to ‘risky investments’ in some colleges.
The institutions surveyed also delivered the data to Ernest & Young in order to get their own assessment of the information, and the resulting report was published last week. One of the findings was, at least to an Irish reader, remarkable: that the average salary of an athletics coach was over twice that of a college president. Although I believe sports to be a very important part of what a university should promote, I cannot help feeling that in some American institutions this has got out of all proportion.
From the perspective of the institutions surveyed, the results in general are encouraging. The report is positive about the administration of finances and the existence of policies that help to secure good practice, including policies on conflicts of interest. But with the climate we now have, the question of whether salaries are proportionate to the role being carried out and appropriate in terms of comparability will need to be addressed.
Here in Ireland salaries are much more tightly regulated, but a more general assessment of financial management may come out of the ‘forensic audit’ that the Minister for Education has entrusted to the Comptroller and Auditor General. Although I have been wary of the context in which this audit was requested, it may be that it will help to build confidence in the ability of the Irish universities and colleges to manage their financial affairs, and such confidence is vital if the institutions are to be encouraged to be innovative and reform-minded. The US survey by the IRS may provide some useful comparative material.Explore posts in the same categories: higher education, university comment below, or link to this permanent URL from your own site.