Kevin Carey has an interesting post on the Chronicle Brainstorm blog discussing gross mismanagement and fiscal impropriety occurring at the public Chicago State University. He cites a Washington Monthly article by his colleague Ben Miller and Phuong Ly:
state audit found that even as the university suffered budget cuts, [Elnora] Daniel [former President] and other employees had spent lavishly on meals, alcohol, and first-class airfare. Daniel had brought five relatives and a university administrator with her on a nine-day Caribbean cruise for a “leadership conference.” Lax financial oversight allegedly resulted in the university paying more than a quarter of a million dollars for two photocopiers purchased from a company owned by a university employee.Carey concludes by raising an important issue:
Meanwhile, students contended with broken elevators, dirty classrooms, and ill-equipped labs. As enrollment declined, so did graduation rates. Of the first-time, full-time freshmen who started in 1996, about 18 percent graduated within six years.
Because colleges and universities are unusually well-regarded institutions that serve a noble societal purpose and are run by people with esteemed academic credentials, the public conversation about them tends to discount the possibility of gross incompetence. In reality, universities can be terribly mismanaged just like K-12 schools, fire departments, or huge multinational oil companies. Failure to acknowledge this prevents us from tackling the problems that most need to be solved.I have a great deal of respect and am a fan of Mr. Carey's work, but I'd like to amend his statement slightly. Colleges and universities are well regarded institutions so long as they are not operated for a profit. Public and non-profit institutions such as Chicago State are essentially given a free pass for the types of economic rent-seeking behavior that the for-profits are accused of regularly and brought to the public shackles for. Zac Bissonnette and I discussed this exact topic recently in an article for Forbes.
Senator Durbin has been one of the leading forces behind the recent movement to reign in the for-profit higher education sector. He is even heading to his home state of Illinois next week to host another scolding of these institutions. Meanwhile, similar misuse of public funding and outright poor performance has been occurring at a state university right up the street.
Paging Senator Durbin...economic profits at the expense of public funds are not limited to those paid out to shareholders and executives at for-profits, they can also be extracted by college administrators through misuse of funds. Public higher education is just as guilty, if not more so, of taking advantage of taxpayer funds as the for-profit institutions that you are attacking.