Governance Spat Threatens Accreditor

One of the country's six regional accrediting agencies risks losing its federal recognition if it is unable to alter its structure so that it is fully independent, financially and operationally, from its parent organization, the U.S. Education Department has warned.

July 1, 2010

One of the country's six regional accrediting agencies risks losing its federal recognition if it is unable to alter its structure so that it is fully independent, financially and operationally, from its parent organization, the U.S. Education Department has warned.

Responding to a complaint filed by the Middle States Commission on Higher Education (against the Middle States Association of Colleges and Schools) this spring, the head of the Education Department's accreditation division told commission officials in a letter last week that Middle States was out of compliance with several federal requirements governing the "separate and independent" nature of accreditors, notably related to its budgeting and hiring.

The agency could lose its federal recognition -- and with it the ability of the association's institutional members to qualify to award federal financial aid -- if it does not institute "permanent change" that allows it to "come into full compliance" with federal rules by December 15, the department's letter said.

At a meeting late last week, the members of the higher education commission voted unanimously to “take any and all necessary steps, individually and/or in conjunction with the Middle States Association, that will result in the CHE coming into full compliance with specified criteria for recognition.” Commission officials say that -- with support from the American Council on Education -- they have hired a lawyer to handle negotiations with officials of the association, who thus far have consistently insisted that their policies would not in any way threaten the federal recognition of the higher education commission or its parallel entities for elementary and secondary schools.

"We think that the letter from the U.S. Department of Education is a game changer, in terms of making it clear that things need to be done," said Michael F. Middaugh, associate provost for institutional effectiveness at the University of Delaware and chair of the Middle States Commission on Higher Education. "At this point, we need to come into compliance with the federal regulations, and anything that jeopardizes that compliance interferes with the integrity of the accreditation process."

The rub -- and the crux of the problem -- is that the Middle States higher education commission can't come into compliance on its own, without the concurrence of the Middle States Association. That's because the association, under Pennsylvania law, is the incorporated parent organization, with three sub-units: the commissions on elementary, secondary, and higher education.

In 1993, after changes in the Higher Education Act required higher education accreditors to show that they were "separate and independent" from any related agencies, the Middle States Association changed its bylaws to grant its three commissions the authority to set their own budgets, collect and spend funds, and hire employees. But beginning two years ago, association officials -- interpreting those bylaws differently -- began requiring the commission to seek approval from the association's board for its annual budget, centralizing the collection of annual dues from all of the commissions' members (so that the association rather than the individual commissions collected the revenues), and restricting the commission's ability to make decisions about hiring and other spending.

Some of the restrictions the association has placed on the commission's ability to hire and spend money are starting to have an impact on the actual accreditation process, according to observers at Middle States. Some staff positions have gone unfilled, and funds that the commission would normally be spending on training volunteers for accrediting visits have been held back.

With those and other concerns in mind, Middle States commission leaders took the unusual step of essentially turning themselves in to the Education Department, asserting that the association's actions were threatening the commission's ability to meet the federal government's "separate and independent" requirements.

In its letter last week, department officials concurred, saying that the current structure violated requirements that an accrediting agency's dues be paid separately from those for any other related group; that an agency "develops and determines its own budget, with no review by or consultation with any other entity or organization"; and that the agency pays "fair market value" for its share of any joint benefit or service (in this case, the office headquarters that the groups share).

Commission officials hope that the Education Department's conclusion that the current structure could threaten the Middle States commission's federal recognition will be enough to prod the association to act where it has not before. They said they were reluctant to speculate about what kinds of "permanent" changes might satisfy the Education Department. One possible solution, for instance -- having each of the commissions become separately incorporated -- might be untenable for the association, since only the higher education commission takes in more revenue than it spends each year.

A lawyer for the association, Donald W. Kramer, declined to discuss the situation except to say the following: "The association is dealing with it internally, and we’re certainly communicating with the commission."


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