Audit Shows Loophole Allows Universities to Raise Money through Supplemental Fees

Missouri State Auditor Nicole Galloway released an audit in August drawing attention to what she views as a loophole in the Higher Education Student Funding Act.

“The purpose of the Higher Education Student Funding Act is to keep the cost of college affordable for Missouri students and families. It defeats the intent of the law when there is no cap or limit on certain fees,” Galloway said in a press release. “The General Assembly should take action to address this issue, because while fees continue to rise, state funding per student has decreased.”

To deal with the lack of funding, institutions use supplemental fees, additional charges that are often associated with the use of specialized technology or equipment in the classroom. According to the audit, revenue from supplemental fees has increased by 112 percent per full-time equivalent student, from $276 per student in the fiscal year 2009 to $586 per student in the fiscal year 2015.

Among the main issues pointed out in the report is the way in which required fees are defined by the Higher Education act. According to the press release, the law defines tuition as “tuition and required fees,” but an increasing number of universities maintain that the fees are only required for certain courses.

The report looked at over 13 different 4-year institutions including MU.

Student Fee Review Committee Chairman William Vega said that an easy next step for MU would be increasing transparency.

“I think one of the easier fixes that could really address this issue would be putting student oversight at least in conjunction with administrative changes,” Vega said. “Even giving us at this point a little bit more clarity about what goes into the decision-making about how you increase, decrease, merge.”

MUTV reached out to the MU for comment and was referred to a statement issued by the University of Missouri System. “The UM System concurs with the Missouri Department of Higher Education’s responses to the audit report, including the expansive view of the audit regarding tuition and fees.”

The Missouri Department of Higher Education said the audit’s claim that institutions were adding supplemental fees to generate money didn’t take into account evolving delivery costs or upgrades, new course and program offerings and enrollment increases that could have led to the increase in supplemental fees.

This particular audit was the second in a series of four audits by Galloway. The other two will focus on higher education performance funding and the University of Missouri system administration, according to a press release.

For more on the audit, head over to MUTV.com.

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