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Trusteeship Magazine

Fashioning an Institutional Response to Government Regulations

By Lawrence White

A question for boards to ponder: Has your institution reached a tipping point on unfunded legal mandates?

Hartwick College is a liberal-arts college in upstate New York. In an eye-opening report prepared for President Margaret Drugovich in 2012, presidential senior assistant Kelly Zack-Decker wrote that Hartwick “is regulated by 28 different federal agencies and departments, 15 different state agencies and departments, four local governments, seven accrediting agencies, three different athletic associations and four other private organizations.” Dryly commenting that legal compliance imposes “an economic impact on the College,” Zack-Decker calculated that Hartwick dedicates the equivalent of three and a half full-time positions and spends almost $300,000 a year to monitor compliance with statutory and regulatory mandates.

It has long been fashionable for higher education leaders to decry the impact of overregulation. One recent Forbes article was facetiously headlined “Breaking News from 1636: Colleges Think Government Regulations Excessive”—1636 being the year Harvard was founded as the nation’s first college.

It is nevertheless legitimate to ask whether something has changed in recent years with respect to both the volume and the intrusiveness of government mandates. One national law firm, Hogan Lovells LLP, sends alerts to its higher education clientele whenever federal agencies impose new reporting, record-keeping, or training requirements on colleges and universities. In the past 12 months, I have received 17 alerts—the equivalent of one every three weeks.

More troublesome than the number of new mandates is their extraordinarily detailed nature. Earlier this year, for example, the U.S. Department of Education issued regulations implementing the gainful-employment provisions in the Higher Education Act. Those provisions serve the relatively straightforward purpose of ensuring that colleges and universities accurately represent their data on graduates’ success in obtaining jobs after completing their course of study. This year’s regulations were an astonishing 219 single-spaced pages, with 63 numerical tables and 158 footnotes. In mind-numbing detail, the regulations specified the wording that must be included in notices to students, the formatting in reports to the government, and other minutiae.

The dramatic escalation in the number and complexity of new federal regulations prompted a bipartisan group of U.S. senators recently to form the “Task Force on Government Regulation of Higher Education.” The task force, composed of 16 eminent higher education leaders and co-chaired by University System of Maryland Chancellor William E. Kirwan and Vanderbilt University Chancellor Nicholas Zeppos, convened several meetings this year and is expected to issue recommendations in early 2015. Among the goals that the task force set for itself is to formulate “specific recommendations to consolidate, streamline and eliminate burdensome, costly and/or confusing regulations, legislation, and reporting requirements.”

In the meantime, what is a responsible governing board to do to stay ahead of the new-mandate tidal wave? I might suggest three modest steps. First, ask administrators who serve as first responders on regulatory issues—the general counsel, chief compliance officer, internal auditor, and risk management director—to perform a compliance audit and report on the results, as Zack-Decker did at Hartwick College.

Second, set up a regular line of communication between compliance officials and the appropriate board committee—which in most instances would be the audit committee or the executive committee—to ensure that board members receive regular reports and updates on compliance developments.

Third, ask institutional officials to examine whether existing compliance resources are adequate and whether changes to the compliance infrastructure should be considered. Many colleges and universities have established or are in the process of establishing dedicated compliance offices to track compliance developments, conduct periodic compliance audits, and interact with federal enforcement agencies.

Whether to set up a compliance office, what structure it should have, and what resources to allocate to the compliance function are issues requiring sensitivity to the mission, culture, and size of your institution. But this much is certain: Government regulation is here forever and will grow before it shrinks. Taking a fresh look at the systems we use for complying with government mandates has never been more topical than now.



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