Auditor General Eugene DePasquale

Auditor General Eugene DePasquale

HARRISBURG Penn State University has shown some progress since the Jerry Sandusky scandal, but the state-related institution needs to make improvements on campus security, prioritize Pennsylvania students, and be subject to open records laws, Pennsylvania Auditor General Eugene DePasquale said in announcing the results of his recent audit of the school.

Penn State has made a modicum of progress in restoring the reputation of the commonwealths flagship state university, DePasquale said, noting the 2011 arrest and subsequent conviction of former coach Jerry Sandusky. Penn State must first and foremost do more to improve campus security, particularly for children who participate in programs and events on its campuses.

Penn State also must do whatever is necessary to control tuition, which increased 535 percent in 30 years making the school increasingly unaffordable for middle-income Pennsylvanians and improve the universitys transparency and accountability to taxpayers.

DePasquale emphasized the audit did not include a review of grants to the former Second Mile charity, nor did it include the Freeh Report, an investigative document commissioned by Penn State after the Sandusky scandal.

I want to be clear: This was an audit of Penn State, not of the Second Mile, the Freeh Report or the Sandusky scandal, DePasquale said. I will review the Second Mile grants in a future capital budget audit. As for the Freeh Report, I believe that the review should have been conducted by the U.S. Department of Education or another independent body, not by someone who was hired by the Penn State board of trustees.

The 115-page audit report, which covers January 2013 through March 2017, has nine findings and 23 recommendations.

The Penn State University audit report is available online at: http://www.PaAuditor.gov.

Missing background checks

One of the more distressing findings in this audit is that years after Jerry Sanduskys conviction for sexually assaulting young boys, Penn State fails to ensure the university conducts 100 percent of mandated background checks, DePasquale said. In the post-Sandusky era, it would be expected that Penn State would be hyper-vigilant about completing all required background checks. Apparently that is not the case.

DePasquale said for academic and sports-related camps held on Penn State campuses that were specifically for children, his auditors found a nearly 8 percent error rate. With this error rate, potentially 57 of the 732 camps held during 2016 had at least one person missing one or more of the legally required clearances.

For other employment background checks, campuswide, auditors found a slightly better error rate of nearly 4 percent. Still, this error rate could mean that potentially 962 of the 24,382 employees hired in 2016 did not have their required pre-employment background check completed.

It is shocking and intolerable for any university to miss this many background checks, but it is appalling that, so soon after the Sandusky scandal, Penn State has an error rate this high, DePasquale said.

As we so tragically learned from Sandusky, it takes only one child predator to cause what could be lifetime trauma to a child. Penn State officials must end their long-running string of excuses and immediately correct this serious deficiency.

Skyrocketing tuition

Over the past 30 years, Penn States in-state tuition at $19,347 for the 2016-17 academic year has increased by a whopping 535 percent, DePasquale said. With the exception of 2015-16, resident tuition increased every year on average about 6.4 percent.

By comparison, over the past three decades, the price of a gallon of milk increased 48 percent and a new car increased in cost 163 percent. In fact, not even the rising cost of health care could keep pace with Penn States tuition growth.

In a March 2016 U.S News and World Report article, Penn State ranked third on the list of the most-expensive public colleges for in-state students.

My team found that Penn State is the most expensive public research university compared to its Big Ten Conference peers, and tuition increases continue to exceed the Consumer Price Index, DePasquale said, noting the University of Nebraskas in-state tuition is $8,618 a year.

Unless Penn State does something now to rein in attendance costs, even fewer middle-income students will be able to attend Pennsylvanias acclaimed land grant university, he said.

Worse yet, Penn State appears to be part of a growing national trend among public research institutions that give preference to no-resident students as a means of increasing tuition revenue, DePasquale continued. At Penn State, and at many other public research institutions, nonresidents pay nearly twice as much as residents in tuition yet it costs nothing more to educate these students.

In essence then, a university can get a better bang for the buck by increasing the number of its nonresident students, he said. Rather than increasing nonresident enrollments, another alternative is to better control tuition cost drivers. If these expenses are adequately controlled, it should then slow the growth of tuition.

Over the past four years, Penn States operating expenses have increased by nearly 10 percent but revenues have grown by just 6.7 percent. Instruction costs increased by 17 percent. Academic support including libraries, museums, galleries, information technology, academic administration and audio-visual services increased by 19 percent.

Simply put, expenses are out of control, DePasquale said. Penn State must create a tuition task force that includes board members with a focus on identifying and lowering costs that are driving tuition into the stratosphere.

Decreasing in-state enrollment

High tuition costs are not the only accessibility challenges for potential in-state students. From 1990 through 2016, at Penn States University Park campus, the number of in-state students decreased by 12 percent, while nonresident and international students increased by 95 percent and 310 percent, respectively.

In 1990-91, at the University Park campus Pennsylvania residents comprised 76.5 percent of the campus population. By 2015-16, just 56.2 percent of the campus population was from Pennsylvania. Similarly, when looking at acceptance rates, in 11 of the past 16 years, including the last seven consecutive years, nonresident acceptance rates were higher than that of Pennsylvania residents.

Penn States expansion of nonresident enrollment threatens accessibility for Pennsylvania residents, DePasquale said. Clearly, because Penn State has not adequately planned for expenses that are outpacing revenues, there is a financial appeal to accepting nonresident students who will pay nearly $15,000 more and be more likely to live on campus.

DePasquale said while Penn State officials remain adamant that the university never intentionally favored nonresident students, and his team found no evidence to suggest otherwise, he cautioned that such practices are in place at other universities similar to Penn State.

After the California state auditor raised concerns earlier this year about the growing number of non-resident students in the University of California system, the board of regents approved its first-ever enrollment cap on nonresident undergraduates, DePasquale said.

A nonresident undergraduate student enrollment cap may well be necessary to help ensure Pennsylvania residents can get into Penn State, or any other state-related university for that matter, he said. These institutions are called state-related for a reason: Pennsylvania taxpayers help fund their operations. Therefore, Pennsylvania students should always be at the top of the acceptance list.

Improving Clery Act compliance

The Clery Act requires all post-secondary institutions that receive funding from federal financial aid programs to prepare an annual report on campus crime, including sexual violence, assaults, hate crimes, weapons offenses, and alcohol and drug abuse.

In November 2016, Penn State was hit with a $2.4 million fine, the largest-ever, after the U.S. Department of Education issued a scathing report identifying 11 Clery Act violations.

Subsequent to the Sandusky scandal and the U.S Department of Educations investigation, Penn State:

While Penn State is continuing to improve its Clery Act-related practices and policies, more improvement is needed, DePasquale said. Penn State must dedicate the appropriate resources to ensure a uniform incident data system is deployed university-wide, and it must establish an improved training program that meets the needs of all employees responsible for Clery Act compliance.

Lacking transparency, accountability

Auditors reviewed the extent to which Penn State implemented recommendations from a November 2012 Department of the Auditor Generals special report on governance reform after the child sexual abuse scandal.

While Penn State has undertaken significant reforms since the Sandusky scandal, it is disappointing that some of the recommendations for improvement have been ignored or contrary action was taken, DePasquale said.

Specifically, the General Assembly should cut the size of the board of trustees not only for Penn State, but for all state-related institutions of higher education, he said, noting that since that recommendation was made in the special report, the board grew from 32 to 36 members, plus two nonvoting members.

Higher-education experts recommend no more than 12 to 15 members on a college board.

Additionally, as a recipient of a significant amount of taxpayer dollars, it is high time for the General Assembly to make Penn State subject to all the provisions of both the commonwealths Right-to-Know Law and the Public Official and Employee Ethics Act, DePasquale said.

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