Excerpt from State Auditor General Tuition Waiver Document

Draft Finding, November, 2, 2000

The University of Illinois had taken steps to implement the recommendation made in the Office of the Auditor General's Management Audit of Tuition and Fee Waivers which was released in 1998. These recommendations stated that U of I should do the following:

• Recommendation #2: Develop written procedures for reporting waivers, keep accurate information on tuition and fees waived for each waiver program, and establish cut-off dates for accepting waivers.
• Recommendation #3: Develop a written policy for ROTC waivers.
• Recommendation #4: Require seven years employment for Children of Employees waivers.
• Recommendation #5: Implement policy on General Assembly waivers.
• Recommendation #6: Maintain complete selection records on individuals awarded waivers.
• Recommendation #7: Develop adequate controls over institutional tuition waivers (e.g., written criteria , complete selection records, records on rejected applicants, university-wide checklist for waivers, internal audits).
• Recommendation #9: Develop a comprehensive tuition and fee waiver policy.

The university has assembled a team of individuals with knowledge about tuition waivers from each campus and is in the process of implementing the recommendations made in the management audit. The Provost's Office and Graduate Colleges are working with individual units on establishing policies, controls, reporting, and documentation.

The 50 percent tuition waiver program to children of employees employed three years has been phased out, although Board of Trustees' review is pending. The policy on General Assembly waivers, established in 1934, has been updated to conform with statute and each legislator has been notified about the change, although Board review is pending. The university has not conducted internal audits of tuition waivers but plans to do so after statewide waiver guidelines are implemented.

The university has not established a comprehensive university-wide policy on tuition and fee waivers as yet. A comprehensive university policy can contain guidance on the process of determining the total number and amount of waivers to be awarded by the university, process for allocating waivers to units within the university, and record keeping responsibility of units involved in awarding waivers (e.g., budget and planning office, academic departments, and the business office).

The IBHE Guidelines specify in Section III on Principles For University Written Procedures that each university must adopt written procedures for a number of purposes that include waiver approvals and allocations; waiver applications; student eligibility and selection; and waiver agreements, records, and records retention.

During this audit, we selected a random sample of 68 Spring 2000 tuition waivers at the three campuses from the two types of tuition waiver programs that are administered by the university: mandatory tuition waiver programs for which criteria were established by statute, and discretionary tuition waivers programs for which criteria were established by individual universities.

The tuition waivers we sampled did not have complete supporting documentation, particularly for discretionary waivers to graduate assistants which represented the largest dollar component of waivers.

Since universities were in the process of implementing new policies and procedures, including those adopted by the Illinois Board of Higher Education, we took that into consideration if supporting documentation was not adequate. At least one of the following documents, when applicable, was missing in 48 of the 68 tuition waivers randomly sampled at the three University of Illinois campuses: application (16), eligibility criteria (11), selection criteria (14), evaluation (22), recommendation (16), decision (15), and contract (22).

Complete written records can formalize the process that is used to award tuition and fee waivers. A formal award process can ensure that applicants submit written applications with an explanation of why they are requesting waivers, that applicants are evaluated against written criteria, that evaluations are documented to demonstrate all applicants were considered equitably, and that documents are retained to support recommendations and decisions.

Eligibility criteria are the minimum requirements that applicants should meet to become a part of the pool of candidates from which the best will be selected. Eligibility criteria may include status as a full-time student, State residency, acceptance into a specific academic program, and/or being in the top specified percentile of the high school graduating class.

Establishing written selection criteria can inform applicants of factors against which they will be evaluated and ensure fair and objective selection of applicants. To choose from a pool of eligible students, selection criteria are necessary, such as grade point average, aptitude test scores (SAT, ACT, GMAT), extracurricular activities, reference checks, interview results, and /or demonstration of skills (e.g., acting, artistic, debate, music).

The individuals who evaluated tuition waiver applicants (e.g., faculty and administrators) did not maintain complete documentation of their evaluation. The records that were maintained could not demonstrate that applicants who best met the criteria were selected and that applicants rejected did not meet criteria or were less qualified. Complete records can also serve to defend the university by providing documentation if there are claims of favoritism or discrimination.

The Springfield campus provided a list of students who were rejected for a talent waiver (IBHE program number 2.2.1 Academic/Other Talent Waivers) but the Chicago and Urbana campuses did not provide this list. The talent wavier program was the only program for which we requested universities to provide a list of rejected applicants. Keeping records on rejected applicants is required by the Illinois Board of Higher Education's policy titled "Public University Tuition and Fee Waiver Guidelines."

Complete written records are necessary, as are effective controls, since tuition waivers were $43 million, or 30 percent of the $145 million in graduate and undergraduate tuition revenue at the three University of Illinois campuses in Spring 2000.

Recommendation

We recommend that the University of Illinois fully implement the recommendations made in the Management Audit of Tuition and Fee Waivers.