The Great Dysfunction as Product of the Academy

January, 2014

Washington -- As the Great Recession continues to be drawn out by the Great Dysfunction in the nation's legislative branch, news comes that a local university is actually teaching techniques that abet governmental breakdown and chronic political division. For around $50,000, one can even get a master's degree in the specialty.

The degree is offered by the "Graduate School of Political Management" at George Washington University.
Thanks to Joseph Morton of the Omaha World-Herald for bringing it to light in an article about how new fundraising techniques -- taught by a "fundraising professor" -- get around campaign finance laws.

A closer look at this educational program shows that GWU also offers "graduate certificates" in Campaign Strategy, PACs and Political Management, Public Relations, and Online Politics. The faculty is largely adjunct, made up of practitioners. Many do not have graduate degrees themselves, but doubtless they have experience in flacking, spinning, money laundering, truth twisting, trolling, and other mendacities that have led us into the Great Dysfunction.

A GWU webpage makes clear that Political Mangement is not a political science or public policy program. I should hope not! And therein lies the problem: loose or non-existent standards in both the academy and in contemporary politics. Unfortunately, they feed on each other. The academy should not condone, let alone teach and celebrate, behaviors that result in political gridlock and destruction of time-tested legislative norms.

When I was a graduate student in the academic discipline of political science, I received a master's in public policy and a doctorate in Politikwissenschaft from the University of Nebraska and FU Berlin, respectively. Both degrees required theses to demonstrate written scholarship. Coursework at NU included, for me, jurisprudence taught by Wallace Rudolph at the law school; inferential statistics taught at the math department; constitutional law taught by Jack Rogers, who was simultaneously the director of research for the state legislature; and prerequisites to meet requirements in foreign languages. At FU Berlin I was guided by the estimable Ekkehart Krippendorff. Both degrees were granted only after hours of oral defense of theses before established scholars.

Accordingly, I have a decent knowledge of and respect for the institutions and practices that hold societies together, and a disdain for abuse of them. Many people I've served with over the years, regardless of political party, shared the view that the art of governing well was the highest goal, not, as the GWU program implicitly extols, the Political Management arts of commanding the news cycle, controlling scandals, gerrymandering, or inventing "destination" fund raising.

Political Management has routed Good Government. GWU now recruits students with the promise that graduates of its Political Management program will be in high demand to staff Congress and its related organizations. Sadly, that's probably true. Tellingly, it's also a two way street: the Nebraska congressman who is featured in the OWH (and in an earlier New York Times article), Adrian Smith, is also a member of the GWU program's adjunct faculty. His re-election will signify and solidify the adoption of political management norms in his legislative district, and represent yet more erosion of the values that once guided the nation's highest legislative body.

One way out of the Great Dysfunction -- or at least not make it worse -- would be to restore standards in political science. Where is the GWU political science faculty voice? Has it been mollified with the GWU statement that the Political Management program is "not political science or public policy" so that GWU can reap nice revenues off of these cozy relationships? It certainly appears so.

More Transparency Needed in Higher Education Audits

January, 2014

Washington -- In the last post, I discussed the need for more transparency in colleges' enrollment management offices. In this post, I look at insufficient openness in higher education auditing.

One cause of this problem is confusion in the accounting profession about auditing standards. Some institutions are covered by one set of standards, others by another. Also at issue is what institutional elements are to be included, and to what extent. Public institutions, which have by far the largest enrollments and get the most tax support, are required to include their proprietary funds and foundations in their audits, but customarily this is done superficially. Institutions typically resist showing too much in audits.*

The upshot is that too many decisions in university management are guided by what the public is allowed to see in audits, and what not. An extraordinary illustration of this came to light a few years ago at Kansas State University. The KSU example also shows how inadequate audits can be when the auditors themselves do not have to worry about the public looking over their shoulders.

In Kansas, as in many states, the state auditor conducts audits of public higher education institutions that receive and spend tax dollars. These audits are public. Alumni, proprietary, and foundation entities associated with the institutions are typically summarized to comply minimally with professional auditing requirements, but not in the same detail. These entities are often audited by their own auditors; the audits are not made public, so there is no opportunity for the public to see the details of the transactions between the tax-supported and non-tax-supported entities.

Upon the retirement of the KSU president in 2009, the Kansas Board of Regents engaged the accounting firm of Grant Thornton to do a confidential audit of all the KSU accounts, not just the tax supported ones.

They found problems.

KSU, with the participation of its foundation, had entered into an agreement with a national lender to provide federally guaranteed loans to its students, then sell the loans to the lender under what was known as the "school as lender" program. The lender, in exchange for the business, paid the KSU foundation a large sum. But to the U.S. Department of Education, this arrangement (with Sallie Mae) looked like a kickback, a violation of the federal law against illegal inducements (a provision to protect the right of students to choose their own lenders). Congress quickly clarified the law to prohibit such agreements.

KSU had been counting on this source of money from the foundation and awarded scholarships from it. When the money was cut off, KSU found itself with a $2.4 million hole to fill. Rather than filling it directly with tax money, which would have shown up in a public audit, or transferring tax money to the foundation (illegal in Kansas), KSU officials moved a combination of proprietary revenue and tax money through other accounts where it would be less visible. Among the movements was a requirement that the athletic department make a contribution from its proprietary account; the athletic department was subsequently made whole by relieving it of paying a like amount to the tax supported part of KSU for services to the proprietary fund.

This circuitous procedure was approved by the KSU president, but the confidential Grant Thornton audit noted

The Foundation, the Alumni Association,.. and the Athletics Department view themselves, and are viewed by others, as part of or associated with the institution of KSU. However, they are all separate legal entities apart from the University. They all have as a common goal the advancement of KSU and have at times entered into transactions with one another in support of that goal. However, as separate legal entities, any transactions among them should be appropriately disclosed, approved and documented allowing for transparency of intent and substance. The failure to do so raises the question of the legitimacy of the transaction. Our report details numerous instances where transactions between the various entities did not meet this standard.

Kansas newspapers knew of the Grant Thornton audit from earlier documents in which the Regents contracted for it. When reporters asked for the final product, the Regents said it was off-limits. But the Kansas Press Association sued and the Regents eventually released it.

One KSU official was caught off-guard: "I was not aware they were going to release that," he told the Kansas City Star. The admission provides a rare glimpse into how decisions are influenced in higher education by lax standards in auditing transparency.

Release of the audit also provides a window into the knowledge -- or lack of it -- of the auditors. A statement in the audit that "monies to fund scholarships historically came from the Kansas State University Student Assistance Foundation from the resale of ... loans" is incorrect. The "school as lender" payments were historically nothing, zero; they were a newly created device that was under investigation by federal officials for fraud, waste, and abuse. Which is another reason audits should be public, so as to provide a check on the work of the auditors themselves.

The need for greater transparency in higher education auditing has never been greater, inasmuch as state cutbacks in tax support for many institutions has left them more dependent on proprietary entities and foundations, to include large corporate donors eager to move in on, and to control subtly or otherwise, university research and outreach. Agreements of dubious legality, conflicts of interest, attached strings, and ethically challenged behavior that strike at the heart of universities' integrity are correspondingly on the rise.

An antidote would be more tax support and its implicit corrective, but in the current opaque auditing environment it is hard to tell if more tax support would make much of a difference. States considering boosts in tax support for their public universities should simultaneously be demanding higher audit standards from their state auditors, who ultimately have the responsibility for how higher education auditing is conducted.


* A component unit of a public university that raises and holds funds for the direct benefit of the university must be included in the university's financial statements, according to GASB Statement 39 and Statement 61. This is to prevent government audits that would render the financial statements of the reporting entity misleading or incomplete. Disputes have occurred recently between state auditors and universities in Ohio, North Dakota, and Kentucky. See links. In my opinion, universities are better off complying with the spirit as well as the letter of the GASB requirements (and OMB-133); the KSU example above shows why it is necessary to see all sides of financial transactions to understand them fully; to insist that foundation transactions are private is counterproductive to the purpose of the public institution.

Criteria for Merit Aid

January, 2014

Washington -- While the President was hosting college presidents this week in a high-profile session at the White House, trying to convince colleges to do more for the low-income, a related session was being held across the country at USC's Center for Enrollment Research, Policy, and Practice.

Of the two sessions, the USC conference delved more deeply into the issue of college "enrollment management" and its often deleterious consequences for the low-income. The conferees tried to define criteria for "merit" aid, a major tool of enrollment management in current practice.

The real issues of merit aid do not revolve around whether a 3.4 versus a 3.5 GPA should be defined as meritorious. Merit aid competes with aid for financially needy students in colleges' budgets. A better term for it would be Vanity Aid, as it is a staple in colleges' quests for vanity rankings in magazines. Another term would be Cocktail Scholarships -- so well-to-do parents can talk at cocktail parties about the "merit scholarships" their children receive.

The huge amount of such aid across the nation is a significant factor in the socio-economic gap in college access that the White House is concerned about. It is also a major factor in forcing loans on the low-income and in creating a trillion dollar student loan burden that overhangs the nation's economic recovery. To the extent its funding source is really Pell Grants (fungible with college aid in financial aid packages), it is abuse of a federal program and a multi-billion dollar reason to explain why increases in Pell grants do not reduce student loan burdens. To the extent its source is actually unfunded discounting, the consequences are increasing showing up as financially threatened and failing colleges.

Several of the USC conferees deserve accolades not only for squarely addressing the role of merit aid in enrollment management, but in demonstrating alternatives at their colleges: Kenyon, Puget Sound, Vassar.

So what are the real criteria for merit aid; how are merit aid amounts set; what are the calculated tradeoffs made by colleges between vanity, access, and student loan burdens; and how are these reflected in individual student financial aid packages? These are not so much philosophical questions, but quantifiable nuts-and-bolts numbers in many colleges' budgets and enrollment management plans. Many institutions pay good money to enrollment management consultants to put numbers to the trade-offs. Customarily these numbers are closely held, lest anyone see the real criteria, the resulting amounts, and who is responsible for making decisions.

I was disappointed that none of the USC conferees brought up (or seemed to know) that a federal regulation actually requires colleges to disclose to their students the "criteria for determining the amount" of student financial aid awards, whether federal, state, local, private, or institutional. [34 CFR 668.42] The incurious U.S. Department of Education has never enforced it, or considered disclosure's potential salutary effect on college decision-making in favor of providing more low-income access and lowering student loan debt.

If the Secretary does not want to enforce the law, then at least he could put a notice in the Federal Register asking for comment about what to do with the existing provision. Some colleges could voluntarily disclose their criteria and their calculations, which might create peer pressure for other colleges to follow suit. Ideally, some colleges would apply to the federal experimental site program, to demonstrate how they are making choices that simultaneously make their colleges financially viable but also serve the public interest, and to work with the Department on what colleges need in the way of federal leadership to move toward overdue enrollment management reforms.

Prairie Lists from 2013

January, 2014

Lincoln -- Construction of the barn on our North prairie was finished early in 2013. The barn attracted many guests during the year. The following are some of the family, friends, neighbors, classmates, prairie experts and others who visited:

Claudia, Steve, Barb, Nancy, Ron, Shelly, Delores, Oliver, Barry, Denny, Bob, Dan, Lisa, Mary Ellen, Dave, Shannon, Alicia, John, Larry, Gary, Lynn, Lee, Joel, Imo, Debbie, Verity, Sheryl, Ulysses, Sonia, Stan, Jennifer, Ralph, Fran, Mark, Bob, Alice, Michelle, Michael, Mike, John, Deb, LuAnn, Jim, Gail, and several others. Some slept over in the barn, from one night to many nights.

Trail cameras on the prairie's three miles of trails recorded many animals in 2013: deer, turkey, raccoon, rabbit, skunk, opossum, squirrel, fox, coyote.

The bare earth around the construction site was colonized by a variety of annual plants in 2013, which over time should give way to perennial grasses characteristic of the rest of the surrounding native and restored prairie. The first plants were pennycress, foxtail, kochia, ragweed, buffalo burr, smartweed, field bindweed, sunflower, barnyard grass, pigweed, and velvetleaf. (I pulled much of the bindweed, buffalo burr, and velvetleaf.) Tree seeds also sprouted and grew in the bare area: cottonwood, locust, and sycamore. In the bare septic field to the east of the barn, our attempt to restore native plants was more successful than we anticipated -- it was seeded just as the 2012 drought began. Nevertheless, we have a good stand of big bluestem, little bluestem, Indian grass, switchgrass, other native grasses and even some milkweed for monarch butterflies (if there are any left).

New Berlin Acquaintances

January, 2014

Berlin -- Over three consecutive days in December I made the acquaintance of three engaging people in Berlin. One had been a student of the painter Gerhard Richter early in Richter's teaching days; another was an American who had perched above Berlin's Teufelsberg during the Cold War, listening; the third was the widow of the charismatic revolutionary, Rudi Dutschke. Each had fascinating stories to tell.

All three will be memorable, but none more than Gretchen Dutschke, as I had no idea she was living in Berlin looking for a publisher for her late husband's collected papers. She is concerned that no one is interested. That I cannot believe; among the papers she has collected are the surveillance files on him. Surveillance organizations seem to have recorded his every speech and his every movement, as he was considered a danger to both sides in the Cold War. But some of his visions have since been vindicated.

In 2010 a German television movie told the story of Rudi and Gretchen's life together; Emily Cox played Gretchen. It was largely based on Gretchen's 1996 biography Rudi Dutschke: Wir hatten ein barbarisches, schönes Leben. The movie got mixed reviews, I have since read. Der Tagesspiegel thought it was excellent; Die Welt, a paper of the Springer publishing house, said much of the movie was falsified. That is to be expected, as many have concluded that it was the Springer empire itself that brought about the assassination attempt on Dutschke's life in 1968, from which he eventually died in 1979.