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College fees soar; flaws found in system

Fees at state colleges and universities jumped 142 percent from 2006 to 2010 while tuition increased 69 percent, according to a new state audit.

In addition to the dramatic rise, the audit found a wide variety of problems with administration of fees, ranging from lack of clear and complete information for parents and students to possibly inappropriate use of fees in a few instances at a few campuses.

“Existing controls governing the fee structure should be improved,” the auditors concluded, adding that improvement also is needed in “the transparency and consistency of Colorado’s current public higher education fee structure.”

Montage of Colorado colleges
From left, the campuses of Colorado State University in Fort Collins, the University of Colorado-Boulder and the Auraria Higher Education Center.

Department of Higher Education officials told the Legislative Audit Committee, which spent more than 90 minutes reviewing the audit Tuesday, that they accept the auditors’ findings and plan to have fixes in place by September 2011.

In 2009-10, students paid $216 million in fees. Total tuition and fees rose 76 percent in that time period. In 2006, fees were 9 percent of total tuition and fees, rising to 13 percent in the 2009-10 school year. Statewide enrollment increased 14 percent during the period while state tax support of colleges slid 42 percent.

Major findings and recommendations of the audit include:

• Lack of complete information about fees for parents and students: Auditors cited gaps and problems on both the DHE’s website and on institutional web pages. “The reality is … you can find that information. Not enough people know where to look for it,” said DHE director Rico Munn. “We need to lay it out in a much clearer way.” Munn noted that a new federal law requires colleges to have online cost calculators by next year.

• Inconsistency in student approval of fees. State law requires student body votes for certain kinds of fees, but there seem to be varying interpretations of which fees require such votes.

• Some fees may be higher than necessary. In some cases, auditors found that fund balances for certain fee-supported programs that were larger than the annual expenses of the programs.

Fee highlights & lowlights

  • Adams State has the highest undergrad mandatory fees ($1,742), the largest five-year increase (100 percent) and the highest percentage of fees as a part of total fees and tuition (39 percent).
  • The lowest fees are at some community colleges ($150), and at some of those colleges fees are only 5 percent of total tuition and fees.
  • Mesa State fees have declined 2 percent in the last five years.
  • Fee increases over the last five years were 60 percent at CU-Boulder, 27 percent at CSU-Fort Collins, 79 percent at UNC and 42 percent at Metro.

• Questionable uses of fees. Auditors reviewed 217 expenses from fee accounts at six campuses. Of those 30 didn’t match allowable uses, and nine were considered “questionable” uses. The major problem seemed to be that fee revenue was mixed with other kinds of income, making it impossible to track which dollars were used for which expenses. Among spending noted by the auditors were payment of staff country club fees and purchase of a Nuggets playoff ticket. (The colleges weren’t identified.)

• Incomplete review of fee policies by DHE. While state law and the constitution give college trustees wide financial latitude, colleges are supposed to follow overall fee policies approved by the Colorado Commission on Higher Education. The auditors found gaps in department review of campus policies. The auditors also noted a lack of independent reviews of fee spending at some campuses.

• Lack of a clear distinction between tuition and fees. The auditors said there sometimes is no clear difference between the spending of tuition revenue and fees, and that there needs to be clearer definition of fees and a third category, what are called “charges for service.” Those generally include such things as application fees and charges for adding or dropping courses.

The state higher education system has been under increasing financial pressure in recent years, primarily because state tax support has declined steadily, forcing boards of trustees to rely more heavily on tuition, fees and outside funding.

“Student fees at one point were a relatively nominal part” of college costs, Munn told the committee. “As state support has decreased student fees have become a more significant part of that mixture.”

Deputy State Auditor Cindi Stetson said, “The fee structure in higher education is highly complex.”

The audit reinforced that, saying, “the array of student fees … is complex and … can be assessed for virtually any purpose.” Fees are imposed for student government and programs, campus construction projects, student centers and health clinics, insurance, athletics and recreation, and administrative services. In addition, there is a wide range of fees for specific courses.

As state funding for campus construction projects has dried up in recent years, some institutions have raised fees to pay for new buildings.

Auditors did a detailed examination of 215 fees at six of the state’s 25 institutions, including the Colorado School of Mines, Colorado State University-Fort Collins, Mesa State College, Metropolitan State College, Northeastern Junior College and Pikes Peak Community College. They also used DHE reports to provide a statewide picture of fees.

At the six institutions reviewed, the number of campus-wide mandatory fees ranged from five to 23.

The audit recommended that the CCHE and college boards work together to reform the fee structure, “with the overall goal of developing a more rational fee system,” in the words of Stetson.

In anticipation of the audit, the commission on Aug. 5 created a committee of students and college financial officers to study campus fees.

While audit committee members generally went easy on DHE executives, there was an undercurrent of disagreement about how standardized an improved fee system should be, including the definition of “student benefit.”

Mark Cavanaugh, DHE chief financial official, agreed that “we could use some additional help here” but warned against hamstringing individual institutions.

Committee member Rep. Frank McNulty, R-Highlands Ranch, said there “needs to be a set definition, a known definition, something hard and fast.” He added, “There likely will be a recommendation [for legislation] at some point out of this committee.”

The higher ed lobbyists attending the meeting undoubtedly took note.

The audit also found minor problems with procurement – primarily a few instances of late reporting of purchasing card spending – at CSU-Fort Collins, Mesa and Metro.

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