Spring 2013 issue of Horizons

3. Uniform Appeals Process Third, the Department of Education should establish a uniform appeals process that would allow an institution to review its calculation results before they are made public, in order to identify any potential mistakes made during the calculation process. The NAICU task force identified several examples in which the department incorrectly calculated an institution’s ratios and related composite score. Currently, the regulations do not provide institutions with a consistent means to appeal inaccurate assessments or to correct any issues noted. Providing a uniform and consistent mechanism could allow institutions to help to prevent mistakes, as well as unnecessary negative media attention on the institution. 4. Prove Sufficient Resources Fourth, the department should fully utilize the measure included in the Higher Education Act that allows an institution that has not passed the financial responsibility test to prove to the department that it still has sufficient resources to meet its financial obligations and prevent the precipitous closure of the institution.

The implementation of this provision would provide institutions with a less costly option than the other, currently available remedies from the department.

5. External Panel Finally, the NAICU report recommends that the department engage an external panel of individuals who possess a high level of expertise in nonprofit accounting rules. The panel could help the department close the gap between the historical differences of opinion and the interpretation of rules that have existed between private institutions and members of the department. The panel would also be an excellent resource for the department to ensure that the ratios and regulations are updated as needed when new nonprofit accounting regulations are released. RubinBrown will continue to monitor progress on this report, specifically as it relates to the department’s formal response. The entire NAICU report is available to the public on its website.

RubinBrown’s Colleges & Universities Services Group RubinBrown provides assurance, tax and management consulting services to colleges and universities, both public and private.

Brent Stevens, CPA – Saint Louis Partner-In-Charge Colleges & Universities Services Group 314.290.3428 brent.stevens@rubinbrown.com

Kaleb J. Lilly, CPA – Kansas City Partner Colleges & Universities Services Group 913.499.4417 kaleb.lilly@rubinbrown.com

Rodney Rice, CPA – Denver Partner Colleges & Universities Services Group 303.952.1233 rodney.rice@rubinbrown.com

Pat Miller, CPA – Saint Louis Accountant Colleges & Universities Services Group 314.290.3217 pat.miller@rubinbrown.com

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