INSIDE HIGHER ED: Cash Monitoring List Unveiled

Career College Central Summary:

  • The U.S. Department of Education on Tuesday, for the first time, named most of the hundreds of colleges whose federal aid it has restricted because of concerns about their finances or compliance with federal requirements.
  • The department released a partial list of the nearly 560 institutions that, as of March 1, were subject to the financial restrictions known as heightened cash monitoring. Most of the colleges — 487 institutions — were on the lower level of scrutiny, and 69 were subject to the higher, more stringent restrictions.
  • “We feel that by issuing this list today we’re doing what’s right for good government and transparency’s sake,” said Ted Mitchell, the under secretary of education.
  • The department continued to keep secret the identities of 21 of the 69 colleges that it placed on the highest level of monitoring, which means that department employees manually approve every dollar that flows to an institution. Nearly all of those unidentified colleges were on that status because a federal audit of the institution resulted in “severe findings.”  
  • “We have ongoing investigations at each of those institutions and we fear that, at this point, releasing those names would impede the progress of our investigation,” Mitchell said in an interview. He said the names of those colleges would eventually be released as the investigations are completed.
  • ‘A Caution Light’
  • Mitchell said that colleges may be placed on either form of cash monitoring for a range of reasons, some of which are more serious than others.
  • The department, for example, may impose the sanction on a college for submitting its financial statements late. That appears to have been the case for 43 public colleges and universities in Minnesota, all of which were on cash monitoring with the designation of “audit late/missing.”
  • At the other extreme, a college may land on cash monitoring because of serious concerns about its financial viability. Roxbury Community College, in Massachusetts, for instance, is on cash monitoring because of concerns about its "administrative capacity." The college released a report in 2013 that showed, among other things, that administrators had lost track of significant amounts of money.
  • A college being on the list “is not necessarily a red flag to students and taxpayers, but it can serve as a caution light,” Mitchell wrote in a blog post. “It means we are watching these institutions more closely to ensure that institutions are using federal student aid in a way that is accountable to both students and taxpayers.”

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