The list of nonprofit colleges and universities that have admitted to distributing false information is not long, but it continues to grow and includes some prominent institutions of higher learning. Before the problem gets worse – and outside entities step in to try to fix the problem – colleges should consider auditing the information they share with the public about their academic performance.
At a time when public policy is seeking to create a more accurate picture of the costs and benefits of attending one institution over another, we also should strive to improve the confidence we have in the self-reported information on key measures of academic success, such as student recruiting, admissions, class profiles, program completion rates and alumni career success, participation or support.
These indicators can be important components of college choice by students and their parents. But they are also extremely important indicators for organizations that rely upon such statistics to rank, accredit, judge credit worthiness, and provide financial support. The data produced by universities are used internally to evaluate campuses, programs and strategic plans, and can be an important determinant of the compensation paid to administrators. In most instances of inaccurate reporting revealed to the public, the typical institutional response has been to change administrators and to promise that new internal controls will correct the problem.
While bragging and advertising hyperbole always exist in competitive situations, numerical claims are verifiable. It is this logic that explains why colleges and universities are required to provide annual audits of their financial condition. The key to a proper financial audit is that it is conducted by a credible, outside and independent authority that has access to the records. No one would suggest that self-audited financial records are credible.
It is for this reason, I suggest, that colleges and universities should take the initiative, before their credibility is tarnished further, to retain outside authorities to audit their academic performance, alongside their financial performance. The institution that can place the imprimatur of a respected outside auditor on its website and publications, in my opinion, can obtain greater credibility for its claims -- and a competitive advantage.
There are several types of organizations that can perform such audits. Accounting firms have adapted their auditing methodologies to verify several different types of claims. One also could see accrediting organizations, test providers, and professional associations moving into this area. A newly created nonprofit group might be created to offer this service.
The natural tendency of all industries is to delay self-examination unless governmental regulations force behavior. An opportunity, however, still exists for self-regulation, even though the federal government seems to be increasing the amount of information it is requiring on the academic and post-academic experiences of students. Some schools in the U.K., for instance, are required by law to perform annual academic audits along with a financial audit. American universities and colleges can still get ahead of the curve.
A regular academic audit is necessary not because colleges and universities are run by administrators who are less trustworthy than the rest of society. Rather these individuals are as trustworthy -- and as vulnerable to competitive pressures -- as the rest of us. All the participants in the education industry would benefit if academic performance information was verified in a transparent way.
Will this increase operating costs for colleges? Of course it will. But against the benefits created for all the consumers of educational data, an educational audit is a worthwhile expense.
And keep in mind that there will be added costs whether colleges do this voluntarily or are required to do it pursuant to regulation. And the costs of a scandal related to false submission of data may be incalculable.
Myron Roomkin is dean emeritus of the Weatherhead School of Business at Case Western Reserve University.