Education Department Sanctions Howard University
Fallout continues from Howard University’s financial aid scandal earlier this year. The Department of Education has placed the historically black university on heightened cash monitoring 2 status, meaning that Howard can get federal funding only after it distributes financial aid to students. The restrictions could create additional financial instability at Howard, which has faced budget and financial issues in recent years. An internal investigation revealed fraud and misappropriation of funds in its financial aid office and led to the termination of six employees. More on Howard’s financial aid restrictions is available on Inside Higher Ed.
Boston Universities Paying Less in PILOT Program
A Boston-based alliance known as the PILOT Action Group claim that the city’s tax-exempt nonprofit institutions aren’t paying their fair share. The group says Boston’s 49 biggest institutions owe the city over $77 million under the PILOT program. While the payments are considered voluntary, all large nonprofit organizations were expected to contribute at a standard level. However, in 2017, institutions like Harvard, Boston College, and Northeastern University paid way less than the amounts requested. The authors of a report on Boston’s PILOT program say the schools can afford to meet their obligations and are shortchanging city residents on services like. Read More.
Survey Reveals Financial Troubles at Private Four-Year Colleges
Inside Higher Ed’s latest survey of business officers reflect declining confidence in financial stability at four-year private colleges. In the 2018 Survey of College and University Business Officers, 68 percent of financial officers at private four-year institutions say that they cannot sustain their tuition discount rate. The number is a nine-percent increase from 2017 and a 21-percent rise from three years ago. Other notable findings were that nearly one-quarter (24 percent) of private college financial officers say their leaders have held serious talks about merging with another school, and 26 percent of officers believe their institution should merge with another.. Read More.
Judge Dismisses Lawsuit over NYU Employee Retirement Plans
Last week, U.S. District Judge Katherine Forrest dismissed a class-action lawsuit against New York University (“NYU”) concerning the institution’s employee retirement plans. Thousands of employees had accused NYU of mishandling their retirement plans, which included an estimated $358 million loss at two 403(b) plans. Judge Forrest ruled that the plaintiffs could not prove NYU’s retirement plan committee caused the losses by burdening employees with underperforming investment choices. The lawsuit is the first of many similar cases brought against universities and their retirement plans; Cornell, Duke and Northwestern are also being sued. More on this ruling is available on the Reuters website.
Tax Reform Could Impact Campus Parking and Transit Benefits
With little guidance provided on the Tax Cuts and Jobs Act, colleges and universities are uncertain how to handle tax law changes related to campus parking. College and university officers worry that the lack of guidance will lead to new taxes on employee parking, even if free parking is a benefit. Officers are also concerned that they will be taxed on upkeep for employee parking lots. Another unresolved issue relates to handling pretax transit programs. Colleges could face taxes on employees who use a pretax account to pay for public transportation to work. Such taxes, however, may be avoided if. Read More.
Government Accountability Office Revises Yellow Book Standards
The U.S. Government Accountability Office (“GAO”) has updated its generally accepted government auditing standards to improve the quality of governmental audits. Commonly known as the “Yellow Book,” the revised standards supersede their 2011 counterparts and provide transparency and accountability for auditors when providing the public with unbiased analysis and information. Some of the changes include reformatting the chapters that distinguish requirements from application guidance, adding a definition for waste and related examples, and specific considerations for when internal control is significant to the audit objectives for performance audits. The revised standards must be applied to financial audits, attestation engagements, and. Read More.