Secretary of State Kate Brown released a performance audit that recommends significant changes to increase accountability in the Oregon University System and its seven universities.

Oregon leaders agree that a college education is a key to the state’s future and are working to strengthen the Oregon University System. The audit report found several areas that can help accomplish the shared goal of a university system that meets the needs of Oregon students.
"We need to know how much it costs to educate an Oregon university student," said Secretary of State Kate Brown. "We need greater accountability. Improving our higher education system is critical to Oregon's economic growth."

The audit highlights several areas to address, including:

Oregon’s current structure risks creating confusion and a lack of accountability.  Governance and authority over higher education needs to be clarified.

Tuition and Fees
Residential tuition and fees increased faster than inflation and increased more than the loss of state funding between 2001 and 2012.   Despite increased tuition rates and higher spending by universities, educational spending per student has declined.  OUS’s current financial tracking and reporting makes it difficult to understand how many resources are devoted to educational activities.  Better tracking of education spending is needed.

Student Debt
Student debt for OUS graduates was on average 9% higher than the national average for the classes of 2005 to 2010.  In addition, the heaviest cost burden falls on those with the lowest incomes. However, OUS does not report on the 35% of students who fail to graduate with a bachelor’s degree within six years or started at another institution.  OUS should determine and track the unmet need and debt for all students and align programs to provide access and reduce student debt for those most in need.

Research Costs 
Tenured and tenure-track faculty at OSU, PSU, and UO are expected to conduct research and non-sponsored costs are absorbed within the department budget.  Universities do not track the amount of time that faculty spend on research, teaching, advising, or other duties.   OUS and its research universities should account for all research related costs.
Financial Accountability.  Oregon universities have taken some steps to control costs but the efforts and results are varied.  Budget reports and analyses are not presented to decision-makers in a way that aids evaluation and financial management. OUS universities need to track, report, and evaluate costs across all levels of higher education in order to prioritize spending and improve financial decision making.

Personnel Costs 
Personnel costs (salary and benefits) are OUS’s largest expenditure.  The Chancellor’s Office cannot analyze actual personnel cost trends in detail without working closely with individual universities.  OUS cannot control most of the costs related to health and retirement, which are driven by PERS and the state.  However, OUS can control personnel costs in terms of the number and type of employees as well as their job functions. OUS and its universities should closely monitor and routinely report on all personnel costs.  

Costs and Enrollment 
OUS universities are relying on increased enrollment to help balance their budgets, especially from non-resident students.  However, OUS universities do not know the full cost of increasing enrollment.  OUS universities calculate the average cost to educate a student; however, they do not include costs associated with increased capacity, such as debt service or capital construction.  In addition, admittance of non-resident students has increased while admittance of resident students has slowed and in some cases decreased.   OUS and its universities should create a comprehensive enrollment and financial management strategy.

Graduation Rate
Oregon universities admit  applicants that are less prepared for college and less likely to graduate. Performance metrics do not represent the entire student body.  For those it tracks, OUS has steadily improved the number of degrees granted each year. Apart from the University of Oregon and Oregon State University, the 6-year OUS graduation rate is below the national average for similar institutions. Oregon is less likely to achieve its 40-40-20 educational goal if OUS universities do not increase graduation rates.  OUS needs to better assess the effectiveness of student assistance programs and report performance metrics for all students.

News release: Oregon Secretary of State