GAO 

United States Government Accountability Office

Report to the Chairman, Subcommittee 

on Higher Education, Lifelong 

Learning, and Competitiveness, 

Committee on Education and Labor, 

House of Representatives 

LOW-INCOME AND 

MINORITY SERVING 

INSTITUTIONS 

Management Attention 

to Long-standing 

Concerns Needed to 

Improve Education’s 

Oversight of Grant 

Programs 

August 2009 

GAO-09-309 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

August 2009

LOW-INCOME AND MINORITY SERVING 

INSTITUTIONS 

Management Attention to Long-standing Concerns

Needed to Improve Education’s Oversight of Grant 

Programs

Highlights of GAO-09-309, a report to the 

Chairman, Subcommittee on Higher 

Education, Lifelong Learning, and 

Competitiveness, Committee on Education 

and Labor, House of Representatives 

Institutions that serve large 

proportions of low-income and 

minority students may receive 

funding under Titles III and V of the 

Higher Education Act. In fiscal year 

2008, $667 million in grants were 

awarded to over 500 institutions. 

GAO was asked to determine (1) 

the characteristics of institutions 

eligible to receive grants under 

Titles III and V and characteristics 

of students served; (2) any 

challenges grantees face, and how 

they spent Title III and V funds to 

address these challenges; and (3) 

the extent to which the Department 

of Education (Education) monitors 

the financial and programmatic 

performance of grantees, and uses 

this information to target its 

technical assistance. To address 

these objectives, GAO analyzed 

data from a representative sample 

of grant applications and annual 

performance reports for the entire 

population of fiscal year 2006 

grantees. GAO also interviewed 

officials from Education and 27 

grantee institutions, and conducted 

financial site visits at other 7 

grantee institutions. 

What GAO Recommends

GAO recommends that Education 

develop a comprehensive, riskbased approach to target 

monitoring and technical 

assistance; follow-up on improper 

uses of grant funds identified in 

this report; ensure staff training 

needs are fully met; disseminate 

information about implementation 

challenges and successful projects 

to grantees; and develop 

appropriate feedback mechanisms. 

Education agreed with our 

recommendations.

Twenty-eight percent of all 2-year and 4-year public and private, not-for-profit 

institutions are eligible to receive Title III and V grants. Eligible institutions 

had fewer resources, including endowment holdings and revenue from 

tuition and fees, and lower per student spending on equipment than ineligible 

institutions. Eligible institutions also served more students who were 

minority, low-income, and attended part-time. 

In their grant applications, Title III and V grantees reported challenges in all 

four grant focus areas: academic quality, student support, institutional 

management, and fiscal stability. Grantees reported spending almost $385 

million in fiscal year 2006 grant funds to address challenges in these areas, 

primarily to strengthen academic quality and student support services. 

Specifically, grantees reported using 43 percent of grant funds on efforts 

designed to improve academic quality, such as using the latest technology in 

the classroom and improving academic space. Efforts to improve student 

support services, including remedial courses, tutoring, and academic 

counseling represented about one-third of grantee expenditures. While nearly 

all grantees reported challenges related to strengthening institutional 

management and fiscal stability, expenditures in these areas represented less 

than one-quarter of all grant funds spent. 

Since GAO reported and made recommendations on the management of 

these programs in 2004 and 2007, Education has continued to take steps to 

improve monitoring, but many of its initiatives have not been completed. 

Education has made recent progress in developing an electronic monitoring 

system and risk-based criteria to improve monitoring, but it discontinued the 

use of annual plans to guide its efforts. Also, limited progress in addressing 

staff skill gaps and substantial declines in site visits to grantees has impeded 

Education’s ability to adequately monitor grantees. Because Education lacks 

a comprehensive approach to target monitoring, it lacks assurance that 

grantees appropriately manage federal funds, increasing the potential for 

fraud, waste, or abuse. For example, GAO identified more than $100,000 in 

questionable expenditures at one grantee institution, including student trips 

to locations such as resorts and amusement parks, and an airplane global 

positioning system. Education provides limited technical assistance to 

grantees, but it has not developed a systematic approach that targets the 

needs of grantees. For example, some grantees told GAO that Education 

could strengthen grantee performance by sharing more information 

regarding common implementation challenges and successful projects. 

Additionally, GAO found that Education’s ability to target technical 

assistance is limited because its current approach for obtaining feedback 

does not encourage candor, and it does not use the feedback it currently 

receives from grantees. 

View GAO-09-309 or key components.

For more information, contact George Scott at 

(202) 512-7215 or scottg@gao.gov. 
Page i GAO-09-309 

Contents 

Letter 1

Background 4 

Eligible Institutions Had Fewer Resources to Serve Proportionately 

More Students at Academic Risk 11 

Institutions Faced Challenges across the Grant Programs’ Four 

Focus Areas but Spent Most of Their Funds in Two Areas, 

Academic Quality and Student Support 19 

Long-standing Deficiencies in Grant Monitoring and Technical 

Assistance Limit Education’s Ability to Ensure That Funds Are 

Used Properly and Grantees Are Supported 25 

Conclusions 36 

Recommendations for Executive Action 37 

Agency Comments 37 

Appendix I Objectives, Scope, and Methodology 39 

Appendix II Institutional and Student Characteristics, by 

Program Eligibility Status 43 

Appendix III Fiscal Year 2002 to 2005 Grantee Expenditures by 

Focus Area 45 

Appendix IV Comments from the Department of Education 47 

Appendix V GAO Contact and Staff Acknowledgments 50 

Tables 

Table 1: Characteristics and Eligibility Criteria of Title III and V 

Grant Programs 6 

Table 2: Title III and V Funding, Fiscal Years 1999 and 2008 7 

Table 3: Comparison of All Title III and V Allowable Activities by 

Program 8 

 Low-Income and Minority Serving Institutions 
Table 4: Summary of Opportunities for Improvement in Grants 

Management 9 

Table 5: Title III and V Eligibility Status of Postsecondary 

Institutions 11 

Table 6: A Comparison of the Status of Education’s Monitoring 

Initiatives in 2004 and 2008 26 

Table 7: Site Visits to Title III and V Grantees, Fiscal Years 2003 

through 2008 29 

Table 8: Summary of Findings from Financial Site Visits 31 

Table 9: Number of 2002 to 2006 Applications Reviewed during 

Content Analysis 40 

Table 10: Summary of GAO Contacts with Title III and V Grantees 42 

Figures 

Figure 1: Location of Institutions Currently Eligible for Title III and 

V Funding and Projected Change in College-Age Minority 

Population by 2015 14 

Figure 2: Race and Ethnicity, by Eligibility Status, 2006 16 

Figure 3: Fiscal Year 2006 Grantee Expenditures by Focus Area 20 

Figure 4: Before-and-After Photos of Science Facilities on Native 

Hawaiian Campus 21 

Figure 5: Monitoring Index Criteria Used to Assess Institutional 

Risks 28 

Figure 6: Desk and Chair Purchased by Grantee 32 

Figure 7: Fiscal Years 2002 and 2003 Grantee Expenditures, by 

Focus Area 45 

Figure 8: Fiscal Years 2004 and 2005 Grantee Expenditures, by 

Focus Area 46 

Page ii GAO-09-309 Low-Income and Minority Serving Institutions
Abbreviations 

Education Department of Education 

HEA Higher Education Act of 1965 

IDUES Institutional Development and Undergraduate Education 

 Service 

IPEDS Integrated Postsecondary Data Systems 

NPSAS National Postsecondary Student Aid Study 

OPE Office of Postsecondary Education 

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Page iii GAO-09-309 Low-Income and Minority Serving Institutions
Page 1 GAO-09-309 

 

United States Government Accountability Office

Washington, DC 20548 

 

August 17, 2009 

The Honorable Rubén Hinojosa 

Chairman 

Subcommittee on Higher Education, 

 Lifelong Learning, and Competitiveness 

Committee on Education and Labor 

House of Representatives 

Dear Mr. Chairman: 

With more than two-thirds of 2008 high school graduates estimated to 

enroll in college soon after graduating, higher education has become more 

accessible than ever before. Yet students from some demographic groups 

still face challenges in attending college. For example, in 2006 only half of 

low-income students enrolled in college soon after completing high 

school, compared to 80 percent of students from high-income families. 

Similarly, African American and Hispanic high school graduates enrolled 

at lower rates than white students, and those who do enroll are at greater 

risk of dropping out before earning a degree or certificate than other 

students. Given current population projections showing the proportion of 

college-age minorities may increase by as much as 54 percent for some 

minority groups over the next decade, the federal government has a 

continuing interest in ensuring the needs of these students are met. 

Beginning in 1965, Congress enacted several grant programs under the 

Higher Education Act (HEA) to strengthen and support developing 

postsecondary institutions. In subsequent reauthorizations, Congress 

expanded the HEA to include programs that support institutions that 

provide low-income and minority students with access to higher 

education. These programs have been authorized under Title III and Title 

V of the HEA, as amended.1

 Institutions eligible to receive these grants 

include Historically Black Colleges and Universities, Hispanic-serving 

1

These programs include three Title III, Part A programs: Strengthening Institutions, 

American Indian Tribally Controlled Colleges and Universities, and Alaska Native and 

Native Hawaiian Serving Institutions. It also includes Title III, Part B Strengthening 

Historically Black Colleges and Universities, and Title V, Part A Developing Hispanic 

Serving Institutions. Throughout the report when we refer to Title III and Title V programs 

or grants we are referring to these specific programs. Our review did not include Title III, 

Part B Historically Black Professional or Graduate Institutions; Part D HBCU Capital 

Financing; or Part E Minority Science and Engineering Improvement Program. 

 Low-Income and Minority Serving Institutions 
 

institutions, Tribal colleges and universities, Alaska Native-serving 

institutions, and Native Hawaiian-serving institutions, and other 

undergraduate postsecondary institutions that serve low-income students. 

In fiscal year 2008, $667 million in grants were awarded to over 500 

institutions. Under the Department of Education’s (Education) program 

guidance, participating institutions are allowed to spend these grants on 

challenges in four focus areas: academic quality, student support services, 

institutional management, and fiscal stability. Within these areas, activities 

might include renovating existing buildings to upgrade technological 

capacity, providing remedial classes or tutoring, developing faculty, or 

building endowments, among others. 

In 2004 and 2007, we reported on Education’s administration of Title III 

and V programs and found that it had made limited progress in 

implementing initiatives to enhance monitoring of and technical assistance 

for grantees.2

 In this requested report, we address the following 

questions:(1) what are the characteristics of institutions eligible to receive 

grants under Titles III and V, including the characteristics of students 

served; (2) what challenges do grantees face, and how have they spent 

Title III and V funds to address these challenges; and (3) to what extent 

does the Department of Education monitor the financial and 

programmatic performance of Title III and V grantees, and use this 

information to target its technical assistance? 

To describe the characteristics of postsecondary institutions eligible to 

receive grants under Titles III and V and the characteristics of their 

students, we analyzed the most recent data available from Education data 

systems. Specifically, we analyzed 2006 data from Education’s Integrated 

Postsecondary Education Data System (IPEDS) to identify institutions 

eligible to receive Title III and V grants and to describe both institutional 

and student characteristics.3

 

2

GAO, Low-Income and Minority Serving Institutions: Department of Education Could 

Improve Its Monitoring and Assistance, GAO-04-961 (Washington, D.C. : Sept. 21, 2004) 

and GAO, Low-Income and Minority Serving Institutions: Education Has Taken Steps to 

Improve Monitoring and Assistance but, Further Progress Is Needed, GAO-07-926T

(Washington, D.C.: June 4, 2007). 

3

IPEDS is a system of surveys designed to collect data from all primary providers of 

postsecondary education on institution-level information such as enrollments, program 

completions, faculty, staff, finances, and academic libraries. Data are collected annually 

from approximately 9,600 postsecondary institutions, including over 6,000 institutions 

eligible for the federal student aid programs. 

Page 2 GAO-09-309 Low-Income and Minority Serving Institutions
 

We also analyzed data from Education’s 2004 National Postsecondary 

Student Aid Study (NPSAS) to provide additional insight into student 

characteristics.4

 Because NPSAS data are based on a representative 

sample of students enrolled in postsecondary education, it does not 

include the universe of institutions as reported in IPEDS. As a result, it is 

not possible to discuss the NPSAS data in terms of eligible and ineligible 

institutions, as can be done with IPEDS data. Instead, when discussing 

NPSAS data, we refer to minority serving and non-minority serving 

institutions. While only Historically Black Colleges and Universities, 

Hispanic-serving Institutions, and Tribal Colleges are classified as minority 

serving institutions for NPSAS, these data are the most complete source of 

information on the characteristics of students attending minority serving 

institutions. We determined that IPEDS and NPSAS data are sufficiently 

reliable for the purposes of this report by testing it for accuracy and 

completeness, reviewing documentation about systems used to produce 

the data, and interviewing agency officials. We also conducted a review of 

the literature to gain a better understanding of the characteristics of 

minority serving institutions and the students they serve. To describe the 

challenges that grantees face and how they used grant funds to address 

these challenges, we reviewed grant applications and annual performance 

reports. Specifically, we conducted a content analysis of grant applications 

using a representative sample of 78 of the 511 fiscal year 2006 grantees, 

allowing us to generalize our findings to the entire population of grantees 

with a 95 percent degree of confidence. Additionally, we analyzed data 

from annual performance reports detailing expenditures of fiscal year 2006 

grant funds—the most recent data available—for 503 of 511 fiscal year 

2006 grantees that submitted these data electronically.5

 We also 

interviewed officials from 27 grantee institutions—including 11 conducted 

on-site—about the challenges they face and their experiences with the 

grant programs. We selected this nonprobability sample based on program 

participation, size of grant, and geographic location. To determine how 

Education monitors and provides technical assistance, we conducted 

interviews with officials at Education and reviewed grant program 

requirements, policies, procedure manuals, and monitoring plans. Finally, 

 

4

NPSAS is a comprehensive nationwide study designed to determine how students and 

their families pay for postsecondary education and to describe some demographic and 

other characteristics of those enrolled. The surveys use a nationally representative sample 

of postsecondary education institutions and students within those institutions. 

5

Eight grantees submitted paper filings of these reports and these were not included in our 

analysis. 

Page 3 GAO-09-309 Low-Income and Minority Serving Institutions
 

we conducted additional site visits at seven grantee institutions to evaluate 

their fiscal policies and internal control practices, and determine whether 

program funds were properly used. These institutions were selected using 

a nonprobability sample based on factors such as program participation, 

size of grant, and geographic location. A more detailed explanation of our 

methodology can be found in appendix I. 

We conducted this performance audit from September 2007 through June 

2009 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Title III and Title V of the Higher Education Act (HEA) authorize federal 

funding for postsecondary institutions that provide large proportions of 

low-income and minority students access to higher education. In 1965, 

Congress authorized grant programs6

 to strengthen and support 

developing postsecondary institutions, leading to today’s Strengthening 

Institutions Program. This program provides discretionary grants to help 

institutions that serve large numbers of low-income students improve their 

academic quality, institutional management, and fiscal stability.7

 In 

subsequent reauthorizations, Congress established several programs to 

target grant funding to certain institutions that serve large numbers of 

minority students. Specifically, in 1986, a program was created to 

designate formula grant funding for historically black colleges and 

universities.8

 In 1998, further amendments to the HEA created new grant 

programs specifically for tribally controlled colleges and universities, 

Alaska Native and Native Hawaiian-serving institutions, and Hispanicserving institutions.9

 Prior to these amendments, these institutions 

Background 

 

6

Higher Education Act of 1965, Pub. L. No. 89-329, Title III, 79 Stat. 1219, 1229. 

7

See 20 U.S.C. §§ 1057-1059g. While not specified in the Act, Education’s guidance also 

allows grantees to use grant funds to improve student support services. 

8

See Higher Education Act of 1986, Pub. L. No. 99-498, Title III, 100 Stat. 1294. For 

Education’s Strengthening Institutions Program regulations, see 34 C.F.R. pt. 607. 

9

See Higher Education Act of 1998, Pub. L. No. 105-244, Title III, 112 Stat. 1581, 1636, 1639, 

1641, 1765. 

Page 4 GAO-09-309 Low-Income and Minority Serving Institutions
 

competed for funding under the Strengthening Institutions program. 

Collectively, these institutions are referred to as minority serving 

institutions. 

Institutions that participate in the Historically Black Colleges and 

Universities and Tribal programs receive mandatory grants based on two 

distinct formulas.10 Institutions that participate in all other programs 

receive grants based on a ranking of applications by a competitive peerreview evaluation. Such institutions may apply individually or as part of a 

cooperative partnership for development grants to develop capacity in 

specified areas on selected campuses. Institutions that receive cooperative 

grants partner and share resources with another postsecondary 

institution—which may or may not be eligible for Title III or V funding—to 

achieve common goals without costly duplication of effort. In addition to 

5-year individual development and cooperative grants, Title III, Part A and 

Title V institutions may apply for a 1-year grant for the purposes of 

planning an application for a 5-year grant, 1-year construction grant, or 1-

year renovation grant. Table 1 briefly describes the characteristics and 

eligibility criteria of Title III and V programs. 

 

10The Historically Black Colleges and Universities program formula considers, in part, the 

amount of funds appropriated, the number of Pell Grant recipients, the number of 

graduates, and the number of students who enroll in graduate school in degree programs in 

which African Americans are underrepresented within 5 years of earning an undergraduate 

degree. Institutions that participate in the Title III, Part A, Tribally Controlled Colleges and 

Universities program receive grants based on a formula which also allows the Secretary of 

Education to reserve 30 percent of appropriations for 1-year construction, maintenance, or 

renovation projects for grants not less than $1 million beginning in fiscal year 2009. The 

majority of other funds available are to be distributed based on Native American student 

head count. 

Page 5 GAO-09-309 Low-Income and Minority Serving Institutions
 

Table 1: Characteristics and Eligibility Criteria of Title III and V Grant Programs 

Grant program Type of grant Duration 

Wait-out 

perioda

Eligibility criteria 

Title III, Part A, 

Strengthening 

Institutions 

Competitive Up to 5 years 2 years An institution of higher education which (1) has an 

enrollment of needy students—at least 50 percent of 

students receive need-based federal financial assistance 

or its percentage of students receiving Pell Grants 

exceeds that of comparable institutions; (2) has average 

educational and general expenditures that are low 

compared to other institutions that offer similar 

instruction; (3) is accredited or making reasonable 

progress toward accreditation; and (4) is legally 

authorized by the state in which it is located to be a junior 

college or award bachelor’s degrees. 

Title III, Part A, Tribal 

Colleges 

Formula 

noncompetitiveb

Up to 5 years None Must meet the same eligibility criteria as the 

Strengthening Institutions program. Additionally, must 

meet the statutory definition of “tribally controlled college 

or university.” 

Title III, Part A, 

Alaska Native and 

Native Hawaiian 

Competitive Up to 5 years None Must meet the same eligibility criteria as the 

Strengthening Institutions program. Additionally, must 

have an undergraduate enrollment of at least 20 percent 

Alaska Native or at least 10 percent Native Hawaiian, as 

applicable. 

Title III, Part B, 

Historically Black 

Colleges and 

Universities 

Formula 

noncompetitive 

Up to 5 years None Any college or university established prior to 1964 and 

whose principal mission was, and is, the education of 

African Americans, and is accredited or is making 

reasonable progress toward accreditation. 

Title V, Part A, 

Hispanic-Serving 

Institutions 

Competitive Up to 5 years None Must meet the same eligibility criteria as the 

Strengthening Institutions program. Additionally, must 

have an undergraduate enrollment of full-time equivalent 

students that is at least 25 percent Hispanic, of which no 

less than 50 percent are low-income individuals. 

Institutions receiving grant funds through Title V may not 

simultaneously receive funds through Title III, Parts A or 

B. 

Sources: Higher Education Act of 1965, as amended, and Department of Education regulations. 

a

The minimum number of years institutions receiving an individual development grant must wait 

before they are eligible to receive another grant under the same program. 

b

The Tribal College program awarded the first formula grants in 2009. 

From fiscal year 1999 to fiscal year 2008, total appropriations for these 

programs increased from $230 million to $667 million. In fiscal year 2008, 

the range of new annual institutional awards was $172,560 for a 1-year 

planning grant to $3 million for an individual development grant (see table 

2). 

Page 6 GAO-09-309 Low-Income and Minority Serving Institutions
 

Table 2: Title III and V Funding, Fiscal Years 1999 and 2008 

Dollars in millions 

Funding 

Program 1999 2008

Title III, Part A, Strengthening Institutions $60 $78

Title III, Part A, Tribal Colleges 3 53

Title III, Part A, Alaska Native/Native Hawaiian Institutions 3 20

Title III, Part B, Historically Black Colleges and 

Universities 136 323

Title V, Part A, Hispanic Serving Institutions 28 193

Total $230 $667

Source: Department of Education, Budget of the United States Government—Appendix, Fiscal Year 2001, at 362, Fiscal Year 2010, at 

372-73. 

The HEA outlines broad goals for Title III and V programs to strengthen 

participating institutions but provides institutions flexibility in deciding 

what approaches will best meet their needs. An institution can use the 

grants to focus on one or more activities to address the challenges 

articulated in its comprehensive development plan, which is required as 

part of the grant application and must include the institution’s strategy for 

achieving growth and self-sufficiency. Under Education’s program 

guidance, institutions are allowed to address challenges in four broad 

focus areas: academic quality, student support services, institutional 

management, and fiscal stability. More specifically, funds can be used for 

activities such as supporting faculty development; purchasing library 

books, periodicals, and other educational materials; hiring tutors or 

counselors for students; improving educational facilities; or building 

endowments. Although each Title III and V program allows funds to be 

used in the same broad areas, there are variations in the rules for 

allowable activities across each of the Title III and V programs (see 

table 3). 

Page 7 GAO-09-309 Low-Income and Minority Serving Institutions
 

Table 3: Comparison of All Title III and V Allowable Activities by Program 

Program 

Allowable activity 

Strengthening 

Institutions Tribal

Alaska Native/ 

Native Hawaiian 

Historically 

Black 

College or 

University 

Hispanic 

Serving 

Institution 

Acquisition of scientific or laboratory equipment • • • • • 

Construction or improvement of instructional 

facilities, including the integration of computer 

technology into instructional facilities 

• • • • • 

Faculty exchange and development for attaining 

advanced degrees 

• • • • • 

Development and improvement of academic 

programs 

• • • • • 

Purchase of educational materials • • • • 

Tutoring, counseling, and other services to 

improve academic success 

• • • • • 

Management of funds and administration • • • • • 

Joint use of facilities • • • • • 

Establishment or improvement of development 

office 

• • • • • 

Establishment or improvement of an endowment • • • • 

Creation or improvement of facilities for distance 

learning capabilities 

• • • • 

Academic instruction in disciplines for 

underrepresented groups 

• • • • 

Establishment or enhancement of a teacher 

education program 

• • • 

Increase the number of underrepresented 

graduate or professional students served 

through expanded courses and institutional 

resources 

• 

Establishing community outreach programs that 

encourage elementary and secondary school 

students to develop the academic skills and 

interest to pursue postsecondary education 

• 

Other activities approved by the Secretary of 

Education 

• • • • • 

Source: GAO analysis of the Higher Education Act. 

Title III and V programs are administered by the Institutional Development 

and Undergraduate Education Service (IDUES) within Education’s Office 

of Postsecondary Education (OPE). In addition to the Title III and V 

programs we examine in this report, IDUES administers the Strengthening 

Page 8 GAO-09-309 Low-Income and Minority Serving Institutions
 

Historically Black Graduate Institutions, Minority Science and Engineering 

Improvement, and the Robert C. Byrd Honors Scholarships programs. 

Additionally, in 2007, IDUES assumed responsibility for several new grant 

programs for other categories of minority serving institutions, including 

Native American-serving Nontribal Institutions and Asian American and 

Native American Pacific Islander-serving Institutions.11 IDUES currently 

has 32 program staff members to administer more than 1,000 grants across 

its portfolio. 

The Comptroller General’s Domestic Working Group highlights areas of 

opportunity and promising practices in grants management—focused both 

on ensuring grant funds are spent properly and on achieving their desired 

results12 (see table 4). Effective grants management calls for establishing 

adequate internal control systems, including efficient and effective 

information systems, training, policies, and oversight procedures, to 

ensure grant funds are properly used and achieve intended results. 

Table 4: Summary of Opportunities for Improvement in Grants Management 

Areas of opportunity Promising practice issue areas 

Internal control systems • Preparing policies and procedures before issuing grants 

• Consolidating information systems to assist in managing 

grants 

• Providing grant management training to staff and grantees 

• Coordinating programs with similar goals and purposes 

Preaward process • Assessing applicant capability to account for funds 

• Competing grants to facilitate accountability 

• Preparing work plans to provide framework for grant 

accountability 

• Including clear terms and conditions in grant award 

documents 

 

11These programs were first authorized in the College Cost Reduction and Access Act (Pub. 

L. No. 110-84) prior to inclusion in the Higher Education Opportunity Act (Pub. L. No. 110-

315). 

12Domestic Working Group, Grant Accountability Project, Guide to Opportunities for 

Improving Grant Accountability (October 2005). 

Page 9 GAO-09-309 Low-Income and Minority Serving Institutions
 

Areas of opportunity Promising practice issue areas 

Managing performance • Monitoring the financial status of grants 

• Ensuring results-through-performance monitoring 

• Using audits to provide valuable information about grantees

• Monitoring subrecipients as a critical element of grant 

success 

Assessing and using 

results 

• Providing evidence of program success 

• Identifying ways to improve program performance 

Source: Domestic Working Group. 

Internal controls provide federal managers with reasonable assurance that 

their program is (1) achieving its primary objectives of effective and 

efficient operations, reliable financial reporting, and compliance with 

applicable laws and regulations; (2) safeguarding assets; and (3) 

preventing fraud, waste, abuse, and mismanagement. Like other federal 

departments and agencies, Education is expected to implement internal 

control systems consistent with the requirements established by the Office 

of Management and Budget and GAO.13 Entities that receive federal funds, 

such as institutions of higher education, are also expected to implement 

effective internal control systems consistent with federal requirements. 

 

13Under 31 U.S.C. § 3512 (c), (d), commonly known as the Federal Managers’ Financial 

Integrity Act of 1982, agency management is responsible for establishing, maintaining, and 

assessing internal control to provide reasonable assurance that it is meeting the Act’s broad 

internal control objectives consistent with the standards GAO prescribes and the 

evaluation guidance Office of Management and Budget (OMB) issues. For more 

information on internal control standards and guidance, see GAO, Standards for Internal 

Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 

1999); and OMB, Management’s Responsibility for Internal Control, Circular No. A-123 

(Washington, D.C.: Dec. 21, 2004). 

Page 10 GAO-09-309 Low-Income and Minority Serving Institutions
 

Eligible Institutions 

Had Fewer Resources 

to Serve 

Proportionately More 

Students at Academic 

Risk 

Lower Revenues May 

Make It Difficult for 

Eligible Institutions to 

Meet Needs of Current and 

Future Students 

We estimate that 28 percent of 2-year and 4-year public and private not-forprofit postsecondary institutions are eligible to participate in the Title III 

and V programs, and together these institutions enrolled just over 4 million 

students. About one-half of all eligible institutions are 2-year colleges, such 

as community colleges, compared to 31 percent of 2-year institutions that 

are ineligible to participate in the programs (see table 5). The substantial 

representation of 2-year public institutions that are eligible to participate 

in the programs appears to amplify some of the overall differences in both 

institutional and student characteristics between eligible and ineligible 

populations discussed throughout this section. 

Table 5: Title III and V Eligibility Status of Postsecondary Institutions 

2-year public 

2-year private, 

not-for-profit 4-year public 

4-year private, 

not-for-profit Total 

Number Percent Number Percent Number Percent Number Percent Number Percent

Eligible 400 46 47 5 154 18 277 32 878a 28

Ineligible 654 29 66 3 489 21 1,080 47 2,289 72

All 

institutions 1,054 33 113 4 643 20 1,357 43 3,167 100

Source: GAO analysis of 2006 IPEDS data. 

a

Postsecondary institutions with branch campuses can decide whether to report IPEDS data for the 

entire system or individually for each branch campus. Totals do not fully account for branch 

campuses that are otherwise eligible but did not report as an individual campus into IPEDS. 

Overall, eligible institutions had access to fewer revenue sources, 

including endowment holdings and tuition and fees, to serve their 

students. Endowments provide additional funds for activities, such as 

providing scholarships and constructing facilities, which would be 

unaffordable if institutions relied solely on tuition, private philanthropic 

gifts, or government funding. The median per-student endowment holdings 

at eligible institutions were lower than the holdings of their ineligible 

peers. For example, the median per-student endowment for eligible 4-year 

Page 11 GAO-09-309 Low-Income and Minority Serving Institutions
 

private, not-for-profit institutions was nearly three times less per student 

($7,297) than the median for ineligible 4-year private, not-for-profit 

institutions ($20,391). Another major source of revenue for institutions is 

the tuition and fees charged to students. For all eligible institutions, the 

median tuition and fees reported were lower than what was reported at 

ineligible institutions. Median tuition and fees at eligible institutions were 

12 percent less than at ineligible institutions for 2-year private, not-forprofit institutions, and 38 percent less at 4-year private, not-for-profit 

institutions. 

Lower revenues may limit an institution’s ability to undertake activities 

that build institutional capacity, such as improving campus facilities and 

enhancing academic offerings. In 2006, per-student spending on 

instructional equipment at eligible institutions was almost 47 percent less 

than spending at ineligible institutions. Eligible institutions also spent 

almost 60 percent less per student on expenses related to day-to-day 

operations, such as financial aid and registration, and about two times less 

per student on certain services, such as providing technology in 

classrooms and activities related to student life and development. 

While eligible institutions had lower revenues and per-student spending, 

they more often had admissions policies associated with the enrollment of 

students who need greater academic support. Research has shown that 

students attending institutions that accept any student who applies for 

admission—known as open-enrollment institutions—are less likely to be 

prepared to successfully undertake college-level coursework. About 60 

percent of eligible institutions had open enrollment, compared to 35 

percent of ineligible institutions. Almost all 2-year public institutions—

both eligible and ineligible—reported open enrollment policies, which is 

consistent with the mission most community colleges have to work with 

students of all ability levels. Open-enrollment policies were much less 

common at eligible 4-year institutions. Less than 30 percent of these 

schools had open enrollment, but it was still more prevalent than at 

ineligible 4-year institutions, of which 10 percent or less had such policies. 

Limited revenues may also impact the ability of eligible institutions to 

meet the demand of future students based on population projections. 

Specifically, about two-thirds of eligible institutions are located in 

southern and western states, many of which are projected to experience 

an increase in the number of college-age students in coming years (see fig. 

1). Studies also project long-term growth in the number of minority and 

low-income high school graduates in these two regions beginning in 2015 

and extending through 2022, driven in part by accelerated growth in the 

Page 12 GAO-09-309 Low-Income and Minority Serving Institutions
 

Hispanic population.14 Given the importance many students enrolled at 

minority-serving institutions place on geographic proximity to home when 

choosing a college, eligible institutions in high-growth states could 

experience proportionately more growth in numbers of students and 

changes in the demographics of the college-age population may result in 

an expansion in the number of eligible institutions. For example, a 2008 

Education study found that in some states including Texas, Arkansas, and 

North Carolina, over 80 percent of entering freshmen are state residents.15

Additionally, Education’s 2004 NPSAS survey found that 80 percent of 

students enrolled at Hispanic-serving institutions and almost 73 percent of 

students enrolled at Historically Black Colleges and Universities stated 

that geographic location was a key reason for selecting their 

postsecondary institution. 

 

14Western Interstate Commission for Higher Education, Knocking at the College Door, 

Projections of High School Graduates by State and Race/Ethnicity (Boulder, Colo., 2008). 

15M. Planty, et. al., “Mobility of College Students” (Indicator 10, Supplemental Table 10-2), 

The Condition of Education 2008 , NCES 2008-031, a report for the U.S. Department of 

Education, National Center for Education Statistics, Institute of Education Sciences 

(Washington, D.C., 2008). 

Page 13 GAO-09-309 Low-Income and Minority Serving Institutions
 

Figure 1: Location of Institutions Currently Eligible for Title III and V Funding and Projected Change in College-Age Minority 

Population by 2015 

Source: GAO analysis; Map Resources (map).

Hawaii

Alaska

(1) (48)

(4)

(3)

Less than 0 percent (negative projected growth)

0.01 to 5 percent

5.01 to 10 percent

10.01 to 20 percent

Greater than 20 percent

Puerto

Rico

Virgin

Islands

Projected percentage change in total college-age minority population by 2015

Outlying Pacific territories and commonwealths (6)

Northern Mariana Islands (1), Guam (2), Marshall Islands (1), 

Federated States of Micronesia (1), American Samoa (1), 

Palau (information not available)

( ) = Number of Title III and V eligible institutions in states, territories, and commonwealths

Del. 

Md. 

D.C. 

(1)

(8)

(3)

N.H. 

Mass. 

R.I. 

Conn. 

N.J. 

(2)

 (14)

(0)

(4)

(11)

Ala.

Ariz.

Ark.

Calif.

Ga.

Ill. Ind.

Iowa

Kans.

La.

Maine

Mo.

Nebr.

N.Mex.

N.Y.

N.Dak.

Oreg.

Pa.

Tex.

Fla.

Miss.

N.C.

Ohio

Okla.

S.Dak.

Wyo.

Idaho

Mont.

Wash.

(0)

(1)

(62)

(11)

(1)

(24)

(21)

(9)

(17)

(14)

(21)

(21)

(25)

(26)

(29)

(15) (34)

(26)

(11) (13)

(37) (31)

(22)

(73)

(9)

(2)

(8)

(13)

(14)

(81)

(9)

(13)

(10)

(9)

(12)

(7)

(8)

(8)

(1) (5)

(20)

Nev.

Utah

Colo.

Mich.

Minn.

Va.

W.

Va.

Ky.

S.C.

Tenn.

Wisc.

Vt.

WEST MIDWEST

SOUTH

NORTHEAST

Note: Demographic projection data were not available for U.S. territorial and commonwealth 

holdings. 

Page 14 GAO-09-309 Low-Income and Minority Serving Institutions
 

Eligible Institutions 

Enrolled More Minority 

and Low-Income Students 

Than Ineligible Institutions 

On average, eligible institutions enrolled more minority students than 

ineligible institutions. In 2006, about one-half of all students enrolled at 

eligible institutions were minority, compared to about one-quarter at 

ineligible institutions (see fig. 2). While eligible institutions represent 28 

percent of all postsecondary institutions, they enrolled over 43 percent of 

all minority students. Eligible institutions were largely comprised of the 

minority group associated with their program eligibility. For example, at 

Historically Black Colleges and Universities the predominant student 

population was African American, and at Hispanic-serving institutions, it 

was Hispanic. Almost 60 percent of all students enrolled at eligible and 

ineligible institutions were women. 

Page 15 GAO-09-309 Low-Income and Minority Serving Institutions
 

Figure 2: Race and Ethnicity, by Eligibility Status, 2006 

Source: GAO analysis of Department of Education 2006 IPEDS data.

2%

Nonresident

Racial/ethnic composition of ineligible institutions

Percentage of white students enrolled

Percentage of minority students enrolled

Percentage of students with unknown race/ethnicity enrolled

Percentage of nonresidents enrolled

45% 48%

18%

22%

5% 6%

Asian

1%

Native American

Other 

African American

Non-Hispanic White

Hispanic

Racial/ethnic composition of eligible institutions

24%

67%

9%

8%

7%

6%

1%

Native American

Non-Hispanic White

2%

Nonresident

Asian

Other

African American

Hispanic

Note: The sum of individual race/ethnicity percentages may not equal total minority enrollment due 

to rounding. 

Eligible institutions also served more low-income students, a central 

requirement for participation in Title III and V programs. Specifically, 44 

percent of students enrolled at eligible institutions received Pell grants 

Page 16 GAO-09-309 Low-Income and Minority Serving Institutions
 

compared to 26 percent at ineligible institutions.16 In addition, eligible 

institutions reported that half of all first-time, full-time students enrolled 

received some form of federal student aid, compared to 25 percent of 

students enrolled at ineligible institutions.17

Students at eligible institutions also may have characteristics that put 

them at academic risk, including attending part-time and delaying their 

enrollment following high school. In 2006, 47 percent of students at 

eligible institutions attended part-time compared with 34 percent of 

students at ineligible institutions. This difference is largely driven by the 

substantial proportion of 2-year public institutions in the eligible 

population. At both eligible and ineligible 2-year public institutions, more 

than 60 percent of students attended part-time. In particular, about twothirds of students attending both eligible and ineligible 2-year public, 

Hispanic-serving institutions attended part-time. At 4-year institutions, 

rates of part-time attendance were much lower. However, eligible 

institutions enrolled more part-time students than ineligible institutions: 29 

percent of students at eligible 4-year public institutions attended part-time, 

compared to 19 percent at ineligible 4-year public institutions. One 

possible explanation for the difference in part-time enrollment may be 

related to the extent to which a student works while enrolled. According 

to Education’s 2004 NPSAS survey, almost 40 percent of students 

attending minority serving institutions worked 35 hours or more per week 

and considered themselves as employees enrolled in college instead of 

students who work, when compared to students attending non-minority 

serving institutions. 

A greater percentage of students at eligible institutions delayed enrollment 

in college than students at ineligible institutions. Research has shown, 

however, that students who delay enrollment are at greater risk of not 

completing a postsecondary credential, as compared to their peers who 

enroll soon after completing high school. At 4-year private, not-for profit 

 

16Pell Grants are grants to low- and middle-income undergraduate students who have 

federally defined financial need and who are enrolled in a degree or certificate program. In 

general, a student’s Pell Grant award is determined by subtracting a student and family’s 

expected family contribution from either the maximum allowable Pell Grant award, $5,350 

for the 2009-2010 school year, or the cost of attendance, whichever is less. 

17Grants provided by federal agencies such as Education, include Title IV Pell Grants and 

Supplemental Educational Opportunity Grants, as well as need-based and merit-based 

educational assistance funds and training vouchers provided from other federal agencies 

and/or federally-sponsored educational benefits programs. 

Page 17 GAO-09-309 Low-Income and Minority Serving Institutions
 

institutions, for example, 34 percent of students at eligible institutions 

compared to 21 percent at ineligible institutions enrolled in college for the 

first time when 25 or older. Rates at 2-year public colleges were similar 

with more than 40 percent of students at eligible and ineligible institutions 

enrolling for the first time at age 25 or older. One exception to this trend 

among eligible institutions was students at Historically Black Colleges and 

Universities, where almost three-quarters of the students enroll right after 

high school. 

Eligible institutions had lower retention rates, on average, than ineligible 

institutions.18 For example, in 2006, eligible institutions retained 60 percent 

of their full-time students compared to 69 percent at other institutions. 

Research has shown that a number of factors, including attending parttime, working full-time, and delaying enrollment in college for more than a 

year after high-school, put students at a greater risk of leaving 

postsecondary education without a credential.19 The retention rate for 2-

year public institutions was lower, but similar, at eligible and ineligible 

institutions. Graduation rates were lower as well.20 Specifically, 39 percent 

of students at eligible 4-year institutions received a bachelor’s degree 

within 6 years of enrolling, compared to 60 percent of students at ineligible 

4-year institutions. According to a recent Education study, graduation 

rates may decline as the percentage of an institution’s low-income student 

population increases.21 This may be for a variety of reasons, including a 

student’s academic preparation, working full-time while enrolled, parents’ 

educational attainment, as well as an institution’s selectivity in admissions. 

However, the report also found that several highly selective minority 

serving institutions enrolled a significant number of low-income students 

 

18For 4-year institutions, retention rate is defined as the percentage of first-time degreeseeking undergraduates from the previous fall who are enrolled the following fall semester. 

For all other institutions, this is the percentage of first-time degree or certificate-seeking 

students from the prior fall who either re-enrolled or successfully completed their program 

by the following fall. 

19U.S. Department of Education, College Persistence on the Rise? Changes in 5-year 

Degree Completion and Postsecondary Persistence Rates between 1994 and 2000 

(Washington, D.C., 2004). 

20Graduation and completion rates are measured by the proportion of students who earn a 

degree within 150 percent of the expected time—6 years for a bachelor’s degree and 3 

years for an associate degree. The formula counts only first-time, full-time students. 

21U.S. Department of Education, Placing College Graduation Rates in Context: How 4-

Year College Graduation Rates Vary With Selectivity and the Size of Low-Income 

Enrollment (Washington, D.C., 2006). 

Page 18 GAO-09-309 Low-Income and Minority Serving Institutions
 

and were high performers with respect to graduation. Another possible 

explanation for the difference in graduation rates may also be tied to 

institutional expenditures. One study reported that those institutions with 

lower expenditures on student support services had lower graduation 

rates.22 Graduation rates for both eligible and ineligible 2-year public 

institutions were similar; however, the relevance of graduation rates at 2-

year institutions has been widely debated since students may enroll in 

these institutions for a variety of reasons other than completing a degree 

or certificate program. See appendix II for more information on 

institutional and student characteristics. 

In their grant applications, Title III and V grantees reported challenges 

across all four grant focus areas: academic quality, student support, 

institutional management, and fiscal stability. According to data collected 

through Education’s annual performance reports, fiscal year 2006 grantees 

reported spending almost $385 million in total grant funds on activities 

across all four focus areas, with over three-quarters of the funds expended 

in the areas of academic quality and student support services (see fig. 3). 

See appendix III for additional information on Title III and V expenditures 

of grant funds for fiscal years 2002 to 2006. 

Institutions Faced 

Challenges across the 

Grant Programs’ Four 

Focus Areas but 

Spent Most of Their 

Funds in Two Areas, 

Academic Quality and 

Student Support 

 

22The Pell Institute, Demography Is Not Destiny: Increasing the Graduation Rates of LowIncome College Students at Large Public Universities (Washington, D.C., 2007). 

Page 19 GAO-09-309 Low-Income and Minority Serving Institutions
 

Figure 3: Fiscal Year 2006 Grantee Expenditures by Focus Area 

0 20 40 60 80

6%

27

57

66

28 17%

43%

34%

Percentage of total dollars, by focus area Percentage of grantees undertaking at least one activity, by focus area

Source: GAO analysis of Department of Education fiscal year 2006 annual performance report data.

Fiscal stability

Institutional management

Student support

Academic quality

Academic Quality Based on our review of a representative sample of grant applications, we 

estimate that all grantees reported challenges in improving academic 

quality, such as recruiting and training highly qualified faculty, using the 

latest technology in the classroom for instruction, improving academic 

space, and tailoring courses to student needs. Fifty-seven percent of fiscal 

year 2006 grantees dedicated at least one activity to improving academic 

quality, and expenditures in this focus area represented about 43 percent 

of total grant funds spent. Specific examples of how institutions used grant 

funds to address academic quality challenges follow: 

• A 2-year Alaska Native institution seeking to provide access to students in 

seven remote villages—covering roughly 88,000 square miles—began 

offering classes online. However because access to computers and highspeed Internet in the villages was costly, unreliable, or nonexistent, most 

lesson plans limited the use of multimedia. By leveraging its Title III grant 

with funds from the Department of Housing and Urban Development’s 

Assisting Communities program, the school obtained wireless capability 

and now offers 8 to 12 online courses each semester. 

Page 20 GAO-09-309 Low-Income and Minority Serving Institutions
 

• A 4-year Native Hawaiian institution said that it has struggled to provide 

science instruction to students due to outdated laboratory facilities. These 

facilities were reportedly so antiquated that the television show “Lost” 

used the facilities to replicate a 1950s laboratory. The institution leveraged 

$2.3 million in Title III grant funds to renovate 12,000 square feet of un-airconditioned, termite-damaged laboratory space that did not comply with 

federal safety and health regulations (see fig. 4). 

Figure 4: Before-and-After Photos of Science Facilities on Native Hawaiian Campus 

Source: Chaminade University, Honolulu, Hawaii.

Student Support Services Nearly all grantees reported difficulty providing student support services, 

including remedial courses, tutoring, and academic counseling. Many of 

these grantees reported that the unique needs of their students underscore 

the importance of providing student support services. Over three-quarters 

of grantees cited difficulties associated with retaining and graduating their 

students, which most attributed to incoming students arriving 

underprepared for college-level course work. Two-thirds of fiscal year 

2006 grantees reported dedicating at least one activity to improving 

student support services, and expenditures in this area represented 34 

percent of total Title III and V grant funds spent. Most of these 

Page 21 GAO-09-309 Low-Income and Minority Serving Institutions
 

expenditures were for tutoring and counseling. Specific examples of how 

institutions used grant funds to address student support challenges follow: 

• A 2-year strengthening institution in Illinois reported in 2005 that 75 

percent of its first-year students were at risk of leaving college without a 

degree because the institution could not provide adequate academic 

support and advisement. To reduce the likelihood that students would fail 

or drop out, the school reported spending $360,000 in grant funds to 

provide training to 175 faculty members on the use of multimedia and 

technology, active learning, and strategies to support various learning 

styles. Additionally, all 46 of its academic advisors were provided training 

in techniques for advising students with different learning styles. 

• A 2-year Hispanic-serving institution in Texas reported using almost 

$350,000 in fiscal year 2006 grant funds to conduct an outreach program at 

area high schools for students at risk of dropping out without earning a 

diploma, as well as to provide bilingual financial aid services to better 

serve its students. By providing support services to students while they are 

in high school, the college aims to improve high school graduation and 

college enrollment rates in Dallas County high schools where 63 percent of 

Hispanic and 52 percent of African American students left high school in 

2001 without a diploma. The outreach program provides students with 

career exploration courses in math, science, and technology, as well as 

peer mentors who are enrolled in 4-year colleges or universities. College 

officials credit the 5-year Title V grant as contributing to a 12 percent 

increase in students pursuing postsecondary education and a 45 percent 

increase in the number of associate degrees awarded between 2004 and 

2007. 

• A 2-year tribal college in South Dakota reported it relied on faculty and 

staff to provide additional tutoring and counseling support to at-risk 

students because it lacked resources to fully address student needs. 

Because almost all of its students come from low-income families, or are 

the first in their families to attend college, additional support could only be 

provided for one-third of the students in need. According to school 

officials, in fiscal year 2006, the school spent nearly $32,000 of its Title III 

grant to hire additional staff and peer mentors to provide tutoring and 

counseling services for 120 additional students, an increase of 169 percent. 

Institutional Management Nearly all grantees reported institutional management challenges, 

including recruiting and retaining qualified staff, updating technology on 

campuses, addressing administrative challenges such as financial aid or 

student registration, undertaking strategic planning, or tracking student 

performance. Twenty-eight percent of all fiscal year 2006 grantees funded 

Page 22 GAO-09-309 Low-Income and Minority Serving Institutions
 

at least one activity in this area, and expenditures on institutional 

management represented about 17 percent of total grant funds spent. 

Specific examples of how institutions used grant funds to address 

institutional management challenges follow: 

• A 2-year Alaska Native-serving institution reported significant staffing 

shortages due to its isolated location, and its staff had to perform a variety 

of jobs. For example, the business office director also occasionally 

performs building and grounds maintenance tasks, such as shoveling 

sidewalks and handling computer problems. Additionally, a staff member 

assigned to manage the bookstore was also responsible for providing 

financial aid advice. While it is not possible to address all challenges with 

Title III funds, the grant was a critical first step in establishing four fulltime financial aid positions that have since become part of the college’s 

budget. 

• A 4-year historically black university in North Carolina that ranks high 

nationally in the production of computer science graduates reported it has 

difficulty maintaining its ongoing investment in its technology 

infrastructure. After spending $1.2 million of Title III funds in 2000, the 

college used an additional $834,000 from subsequent Title III grants to 

upgrade telecommunications, implement Web-enabled administrative 

software, and increase classes with wireless capabilities by 34 percent. 

• A 4-year Hispanic-serving institution in Puerto Rico said its ability to 

expand is limited by its location in an historic building that cannot be 

altered, hindering service to the island’s growing college-age population. 

While delays in obtaining construction permits have limited the college’s 

progress, the college is completing renovations for a new academic 

building. It has spent $740,000 in grant funds to renovate its library, 

increasing the space dedicated to this building by 32,000 square feet. 

• A tribal college in South Dakota reported using more than $85,000 in grant 

funds to develop a comprehensive training program for its grants 

management staff to address internal control weaknesses identified by 

federal auditors. According to school officials, auditors reported that prior 

practices resulted in $2.3 million in federal grants at risk of fraud, waste, 

and abuse. In 2006, the college used grant funds to create a Human 

Resources Office, increase its administrative staff from four to six and 

provide them with training, and post its internal control policies and 

practices online. Officials reported that a federal agency that rescinded a 

$50,000 grant award in 2005 later returned the grant upon completion of 

these activities. 

Page 23 GAO-09-309 Low-Income and Minority Serving Institutions
 

• A 4-year historically black college in Tennessee reported spending 

$101,795 in Title III funds to strengthen institutional management by 

developing an operating manual and providing training for members of its 

Board of Directors. A school official told us that most board members do 

not have professional experience related to higher education 

administration, and their staggered 3-year terms result in new members 

joining the board periodically. 

Fiscal Stability We estimate that nearly all grantees reported fiscal stability challenges, 

including decreases in state and local government funding, an overreliance 

on tuition-based revenue, and lack of donations from private sources. 

Twenty-seven percent of fiscal year 2006 grantees funded at least one 

activity in this focus area, and fiscal stability expenditures represented 6 

percent of all grant funds spent. Specific examples of how institutions 

used grant funds to address fiscal stability challenges follow: 

• A 2-year strengthening institution in Iowa cited declining state funding as a 

challenge, reporting that in 2002, it fell below other Iowa community 

colleges in per-credit hour funding from the state and was forced to raise 

tuition and fees. Officials said many of its students are low-income and 

cannot pay more. As a result, the college ranks last among Iowa 

community colleges in general fund balance, threatening its long-term 

viability. To address these challenges, the college established three new 

academic programs—dental hygiene, biotechnology, and advanced 

manufacturing—that are in high demand in the surrounding community. 

The dental hygiene and biotechnology programs are anticipated to provide 

the college with an additional $200,000 in revenues annually and $1 million 

in federal and state appropriations.23

• Officials at a tribal college in South Dakota reported that despite having a 

large, active donor list of 40,000, the college lacked staff with the requisite 

skills to request major gifts from these donors. The college reported using 

$170,000 in Title III grant funds to improve operations at its development 

office by acquiring software to track such information as donor giving 

history and by centralizing its direct mail operations for requesting gifts. 

Additionally, nearly 20 percent of its $2.5 million grant was used to 

increase its existing endowment of $13 million. 

 

23At the time of publication, the institution did not have data available for the advanced 

manufacturing technology program. 

Page 24 GAO-09-309 Low-Income and Minority Serving Institutions
 

Long-standing 

Deficiencies in Grant 

Monitoring and 

Technical Assistance 

Limit Education’s 

Ability to Ensure That 

Funds Are Used 

Properly and 

Grantees Are 

Supported 

Education Has Made 

Limited Progress in 

Improving Its Monitoring, 

and Still Lacks a 

Systematic Approach to 

Coordinate Its Efforts 

Five times since 1996, GAO and Education’s Inspector General have 

recommended that Education implement a systematic approach to 

monitoring to better assess the fiscal and programmatic performance of 

Title III and V grantees. Such an approach would include implementing 

formal monitoring and technical assistance plans based on risk models 

and developing written procedures for providing technical assistance. 

When we previously reported on Education’s management of the programs 

in 2004, the department had begun several initiatives to improve 

monitoring, including the development of annual monitoring plans to 

identify potential risk with grants and guide the work of program staff. 

However, we found that the lack of progress it made in implementing 

these initiatives had resulted in uneven monitoring of Title III and V 

grantees.24 Accordingly, we recommended that Education take steps to 

ensure its monitoring plans were carried out and targeted toward at-risk 

grantees by completing its electronic monitoring system and training 

programs. While Education has taken some steps to better target its 

monitoring plans in response to our recommendation, many of its 

initiatives have yet to be fully realized (see table 6). 

 

24GAO-04-961. 

Page 25 GAO-09-309 Low-Income and Minority Serving Institutions
 

Table 6: A Comparison of the Status of Education’s Monitoring Initiatives in 2004 and 2008 

Monitoring initiative 2004 status 2008 status 

Implement electronic 

monitoring system 

Education implemented electronic 

monitoring of Title III and V grantees at the 

end of 2004. 

Redesigned in fiscal year 2007 because the original system 

did not achieve its intended goal of presenting a 

comprehensive view of risk based on an institution’s portfolio 

of higher education grant programs. The new system, while 

fully operational, will continue to be enhanced through fiscal 

year 2010. 

Establish risk-based 

criteria 

Education’s OPE developed risk-based 

criteria in fiscal year 2003, but used these 

criteria inconsistently within the program 

office. 

OPE established preliminary risk-based criteria for all its 

grant programs in fiscal year 2008. Criteria have been used 

to create a monitoring index of schools on which to focus 

additional monitoring, but only a small portion of these 

criteria are being utilized to set priorities. 

Develop monitoring plans Following a fiscal year 2002 effort to place 

greater emphasis on performance 

monitoring for all grantees, annual 

monitoring plans were developed to guide 

monitoring and technical assistance. 

Once the requirement to submit these plans to Education’s 

OPE was rescinded in 2006, the program office ceased to 

develop monitoring plans. 

Design comprehensive 

approach to site visits 

While program staff were required to 

complete at least two site visits annually, 

the majority of staff did not fulfill the 

requirement. Site visits that were conducted 

lacked a standard approach and varied in 

quality. 

The requirement for program officers to complete a minimum 

number of site visits has been eliminated. Since 2004, few 

site visits have been completed, and most of those did not 

include financial monitoring to determine whether program 

funds were properly used. 

Develop training for 

enhanced monitoring 

Education developed a corrective action 

plan to provide additional courses over a 3-

year period to address training needs of its 

staff. 

Education has developed courses to enhance monitoring, 

but most staff have not completed coursework and one key 

course has yet to be offered. 

Source: GAO analysis. 

In 2007, the Office of Postsecondary Education (OPE) reestablished an 

office to oversee monitoring across all of its higher education grant 

programs. The program oversight staff is responsible for overseeing OPE 

monitoring policies, procedures, and standards, and training staff in these 

areas. The establishment of the oversight staff was designed to increase 

consistency in monitoring practices throughout more than 40 grant 

programs administered by OPE, including Title III and V programs, and to 

supplement the responsibilities of individual program offices with regard 

to monitoring and technical assistance. 

In 2007, Education redesigned its electronic monitoring system to provide 

several key enhancements lacking in the system that was originally 

introduced 4 years earlier. The original system was not designed to share 

key information across grant programs administered by OPE. The 

redesigned system brings together information about an institution’s 

performance in managing its entire portfolio of higher education grants, 

Electronic Monitoring System 

Page 26 GAO-09-309 Low-Income and Minority Serving Institutions
 

increasing Education’s ability to assess the risk of grantee noncompliance 

with program rules. Program officers can also enter updates about a 

grantee’s performance in the system, based on routine interactions with 

the grantee. According to Education officials, this information can be used 

to reflect real-time information about institutional behavior. Because the 

system integrates financial and programmatic data, such as institutional 

drawdown of grant funds and annual performance reports, staff will have 

ready access to information needed to perform monitoring tasks. Given 

that each program officer is responsible for managing around 50 grants, 

electronic monitoring, if fully integrated into the oversight activities of 

program staff, has the potential to improve the quality and consistency of 

monitoring. 

Another feature of the system is a monitoring index, implemented in 2008, 

that determines an institution’s need for heightened monitoring or 

technical assistance based on nine weighted criteria designed to assess 

risk related to an institution’s ability to manage its grants (see fig. 5). For 

example, an institution that has lost accreditation (30 percent of the 

index) or has grants totaling more than $30 million (5 percent of the index) 

is automatically prioritized for heightened monitoring, which may involve 

site visits or other contacts with the school. Education has identified over 

130 institutions across all higher education grant programs for heightened 

monitoring, of which 43 percent participate in the Title III and V programs. 

Education officials said they will review the criteria and make revisions, as 

necessary, to better assess risk. 

Page 27 GAO-09-309 Low-Income and Minority Serving Institutions
 

Figure 5: Monitoring Index Criteria Used to Assess Institutional Risks 

5%

5%

15%

15% 15%

15%

30%

Source: GAO analysis of Department of Education data.

Accreditation

status

Funds not completely expended during grant cycle

Total number of higher education grants

Other

Independent audits

with findings

Past operating deficit

Decline in enrollment

by 25 percent

Total grant funds exceed

$30 million (5%)

Number of earmarks

held (5%)

Institutional matches

required (5%)

While Education has made recent progress in automating its monitoring 

tools and developing risk-based criteria, it lacks a coordinated approach to 

guide its monitoring efforts. Specifically, Education officials told us they 

discontinued the development of annual monitoring and technical 

assistance plans for Title III and V programs, one of the initiatives that we 

reported on in 2004. In 2002, Education directed each program within the 

agency to develop a monitoring plan to place greater emphasis on 

performance monitoring for all grantees. In addition to asking whether 

grantees were achieving results, program officials were also to consider 

what assistance Education could provide to help grantees accomplish 

program objectives and incorporate an increased departmental emphasis 

on compliance with the law into their planning. Education developed a 

plan for Title III and V programs that called for staff to (1) conduct risk 

assessments, (2) perform a minimum number of site visits each year, and 

(3) follow up with grantees regarding their performance reports. However, 

in 2006, Education rescinded the requirement for each program office to 

submit annual monitoring plans because the practice did not achieve its 

intended purpose of better targeting its monitoring resources. Since then, 

OPE has not developed any plans to guide its monitoring activities for 

Annual Monitoring Plans 

Page 28 GAO-09-309 Low-Income and Minority Serving Institutions
 

Title III and V programs, although such plans are in place for other OPE 

grant programs. 

Since our 2004 report, site visits to Title III and V grantees, a critical 

component of an effective grants management program, have declined 

substantially. For example, Education conducted 26 site visits in fiscal 

year 2003, but only visited 22 grantees over the 4-year period of fiscal year 

2005 through fiscal year 2008 (see table 7). We were unable to fully 

determine the nature or quality of these site visits because Education 

could not account for most of the reports required to document site visit 

findings. Additionally, since the issuance of our 2004 report, which found 

that about three-quarters of the program staff were not meeting the 

requirement to complete at least two site visits per year, Education has 

discontinued the two site visit requirement. Instead Education officials 

said they have changed the focus to improve the quality of monitoring by 

relying on the risk criteria to target grantees most in need of site visits to 

make the best use of the department’s limited resources. 

Site Visits 

Table 7: Site Visits to Title III and V Grantees, Fiscal Years 2003 through 2008 

Program 2003 2004 2005 2006 2007 2008

Title III, Part A, Strengthening Institutions 14 14 1 7 0 1

Title III, Part A, Alaska Native/Native 

Hawaiian Institutions 7 0 0 0 0 0

Title III, Part A, Tribal Colleges 0 3 3 0 0 0

Title III, Part B, Historically Black Colleges 

and Universities 1 0 2 3 0 4

Title V, Part A, Hispanic Serving 

Institutions 4 1 1 0 1 0

Total 26 18 6 10 1 5

Source: GAO analysis of Department of Education data. 

Note: As of April 2009, Education had completed six site visits for fiscal year 2009 to an equal 

number of Strengthening Institutions, Historically Black Colleges and Universities, and Hispanic 

Serving Institutions. 

One former senior Education official told us that site visits had declined 

because the program office has limited staff and few have the requisite 

skills to conduct financial site visits. According to Education, the OPE 

office responsible for administering Title III and V grant programs 

currently has 32 staff to monitor more than 1,000 grants across its assigned 

programs, compared to 2003 when it had 38 staff responsible for 

approximately 750 grants. To address concerns that program officers do 

not have the right skill mix to conduct comprehensive site visits, OPE’s 

Page 29 GAO-09-309 Low-Income and Minority Serving Institutions
 

program oversight staff assumed responsibility for conducting site visits 

for Title III and V programs in 2008. However, because the office is 

responsible for conducting site visits across more than 40 higher 

education grant programs, the number of Title III and V grantees it can 

visit will be limited. In fiscal year 2008, for example, five site visits that 

program oversight staff conducted were to Title III grant recipients. 

With the implementation of an electronic monitoring system and riskbased monitoring index, Education now has tools to enhance its ability to 

select grantees for site visits. However, officials said that aside from 

referrals from the Inspector General, the criteria they used in selecting 

schools for fiscal year 2008 and 2009 site visits was the total amount of 

higher education grants awarded (i.e., grantees receiving $30 million or 

more), which represents only 5 percent of the monitoring index criteria. In 

fiscal year 2008, this limited criteria resulted in a narrow subset of schools 

being visited, with four of the five site visits being made to Historically 

Black Colleges and Universities. Ideally, Education’s risk-based approach 

would consider not only grant amounts, but also the full list of weighted 

criteria on its monitoring index, along with other factors such as grant 

program participation and institution type to ensure that risk is considered 

across each of the grant programs and a mix of schools are visited. 

Education has made progress in developing grant monitoring courses to 

enhance the skills of Title III and V program staff, but skill gaps remain 

and limit the ability of program staff to fully carry out their monitoring and 

technical assistance responsibilities. Since our 2004 report, Education has 

developed courses on internal control and grants monitoring, but these 

courses have been attended by less than half of the program staff. For 

example, of 28 staff members only 2 have completed a new internal 

control course and 13 have completed a course on grants monitoring. 

Senior officials at Education we spoke to also identified critical areas 

where additional training is needed. Specifically, one official told us that 

the ability to conduct comprehensive reviews of grantees has been 

hindered because program staff have not had training on how to review 

the financial practices of grantees. A course on this topic was developed in 

2007 but has yet to be offered. Another official said Education needs to 

provide training for program staff on how to incorporate the results of the 

external evaluations that grantees are required to complete into their 

reviews. 

Staff Training 

Page 30 GAO-09-309 Low-Income and Minority Serving Institutions
 

Education has not fully implemented its planned monitoring initiatives and 

lacks assurance that grantees appropriately manage federal funds, 

increasing the potential for fraud, waste, or abuse. During the course of 

this study, we reviewed financial and grant project records at seven 

institutions participating in Title III and V programs in fiscal year 2006. We 

identified $142,943 in questionable expenses at 4 of 7 institutions we 

visited25 (see table 8). 

Education Lacks 

Assurance That Grant 

Funds Are Used 

Appropriately 

Table 8: Summary of Findings from Financial Site Visits 

Grantee State 

Total dollars 

reviewed 

Questionable 

grant expenses

A Texas $300,438 $2,127

B Puerto Rico 353,963 29,258

C Illinois 226,670 

D Maryland 427,180 105,117

E Tennessee 175,388 

F California 108,977 6,441

G North Dakota 299,846 

Total $1,892,462 $142,943

Source: GAO analysis of grantee disbursement records conducted during site visits. 

At one institution, we identified significant internal control weaknesses 

and $105,117 in questionable expenditures. Specifically, a review of grant 

disbursement records for Grantee D revealed spending with no clear 

linkage to the grant and instances in which accounting procedures were 

bypassed by grant staff at the institution. Of the questionable expenditures 

we identified, $88,195 was attributed to an activity designed to promote 

character and leadership development. Of that amount, we found that the 

institution used more than $79,975 to pay for numerous student trips to 

locations such as resorts and amusement parks. According to the grant 

agreement, the funds were to be used for student service learning projects. 

Additionally, $4,578 in grant funds was used to purchase an airplane global 

positioning system even though the school did not own an airplane. Over 

$6,000 of grant funds was used to purchase a desk and chair (see fig. 6). In 

 

25Questionable expenses are expenditures that appear to have been made for incorrect 

amounts, for unauthorized purposes, or for personal use. They can be inadvertent errors, 

such as duplicate payments and calculation errors, or violations of grant agreement terms, 

such as payments for unsupported or inadequately supported claims or payments resulting 

from fraud and abuse. 

Page 31 GAO-09-309 Low-Income and Minority Serving Institutions
 

purchasing the global positioning system and office furniture, a school 

official split the payments on an institutionally issued purchase card to 

circumvent limits established by the institution. Officials at the institution 

ignored multiple warnings about mismanagement of this activity from 

external evaluators hired to review the grant. Education visited the school 

in 2006 but found no problems, and recommended we visit the institution 

as an example of a model grantee. We referred the problems we noted at 

this institution to Education’s Inspector General for further investigation. 

Figure 6: Desk and Chair Purchased by Grantee 

Source: GAO.

Examples of the questionable expenditures we identified at three other 

institutions we visited follow: 

• We were unable to complete testing for about $147,000 of grant fund 

transactions at Grantee A due to a lack of readily available supporting 

documentation. For one transaction that was fully documented, the 

grantee improperly used $2,127 in grant funds to pay late fees assessed to 

the college. Once we pointed out that grant funds cannot be used for this 

purpose, the college took corrective action by writing a check to 

reimburse the grant. 

Page 32 GAO-09-309 Low-Income and Minority Serving Institutions
 

• Grantee B used $27,530 to prepay subscription and contract services that 

would be delivered after the grant expired. 

• Grantee F used more than $1,500 in grant funds to purchase fast food and 

over $4,800 to purchase t-shirts for students. 

We presented Education with the results of our analysis supporting each 

of our findings related to our grantee visits, and senior officials expressed 

commitment to follow up on each of the findings in coordination with 

grantees. 

The annual performance reports that grantees are required to submit to 

receive continued funding provide a key tool for monitoring grantee 

performance, but we found evidence that the program office is not 

consistently reviewing these reports. In reviewing seven annual 

performance reports that fiscal year 2006 grantees submitted late, we 

found six that lacked detail, provided inaccurate information, or were 

incomplete. For example, one grantee reported that 80 percent ($2.3 

million) of total funds allotted for the year were committed to “other 

unspecified activities” instead of clearly listing how the funds were spent, 

as required. Another institution in the final year of its grant submitted a 

report that was mostly blank, but it was counted as complete by program 

staff until we pointed out the discrepancy. The lack of information 

provided by the institution limits OPE’s ability to follow administrative 

requirements for closing the grant, and it also significantly impairs its 

ability to understand the impact federal funds had on this particular 

campus or whether funds were used appropriately. Education 

subsequently requested that the school finalize its performance report a 

full year after it was originally due. While such reports will now be easily 

accessible through the electronic monitoring system, program staff will 

still have to take the initiative to review the information to determine 

whether grantees have demonstrated adequate progress to justify 

continued funding. 

Education’s Ability to 

Target Technical 

Assistance Remains 

Limited 

While Education provides technical assistance for prospective and current 

Title III and V grantees through preapplication workshops and routine 

interaction between program officers and grant administrators at the 

institutions, it has not made progress in developing a systematic approach 

to target the needs of grantees. According to one senior Education official, 

technical assistance is generally provided to Title III and V grantees on a 

case-by-case basis at the discretion of program officers. There are no 

Page 33 GAO-09-309 Low-Income and Minority Serving Institutions
 

particular criteria to determine when a program officer should provide 

technical assistance. For example, officials at a few of the institutions we 

spoke to told us that Education should provide technical assistance 

whenever the grant administration staff at an institution changes. Another 

senior Education official said that technical assistance should be provided 

when annual performance reports show numerous grantees experiencing 

similar problems, or if program officers receive numerous calls on a 

particular issue. Since we found evidence that program staff may not 

consistently review these reports, the extent to which this type of followup is occurring is unclear. 

According to grantees we interviewed, the technical assistance Education 

provides is not consistent throughout the grant cycle. Specifically, several 

officials from schools at which we conducted interviews were 

complimentary of the technical assistance Education provided when they 

were applying for grants. Some of those officials, however, noted a 

precipitous drop in assistance during the first year after grants were 

awarded when grantees often need help with implementation challenges, 

such as recruiting and retaining highly qualified staff, securing matching 

funds for endowments, and overcoming construction delays. In the past, 

grantees had an opportunity to address such challenges at annual 

conferences sponsored by Education, but these conferences have not been 

held since 2006. Nearly 40 percent of the 113 grantees that provided 

comments in their annual performance reports requested that Education 

resume providing the conferences on a regular basis. According to 

Education officials, resource constraints have prevented them from 

holding the conferences, but plans are under way to hold a conference in 

fall 2009. Since Education stopped convening conferences, schools, and in 

some cases higher education advocacy groups, have hosted conferences at 

which Education staff participated. For example, five conferences or 

workshops held for the Title V program in 2008 were hosted by schools or 

advocacy groups. Officials from a few schools we interviewed said it is 

important for Education to take the lead in planning conferences to ensure 

that grantees receive information that is consistent with program rules. 

They also noted that when conferences were held in locations such as 

Washington D.C., participation could be expensive and suggested 

Education consider holding regional conferences to make it more 

affordable for grantees to attend. 

Officials from about half of the schools and some officials from advocacy 

groups we interviewed also reported that Education could strengthen 

grantee performance by more broadly disseminating information about 

successful projects. Education has included limited information on its 

Page 34 GAO-09-309 Low-Income and Minority Serving Institutions
 

Web site about six current and past projects. However, the information for 

each project is maintained on the specific Title III or V program pages, 

rather than being presented in a centralized location for the benefit of all 

grantees. For example, one of the projects that highlighted student 

retention efforts at a Native Hawaiian institution, a topic that has wide 

applicability across the grant programs, was only located at the 

Strengthening Institutions Program Web site. Additionally, this Web 

information did not consistently include contact information to allow 

interested schools to contact the featured grantees. School officials said 

such information sharing would provide lessons learned from similar 

projects and better leverage the federal investment. For example, an 

official at a 2-year Strengthening Institutions grantee in North Carolina 

told us he independently identified a contact at a Title III grantee to 

discuss the application process, but suggested that a clearinghouse of 

successful projects would be helpful for connecting institutions with 

similar challenges. 

As we reported in 2004 and 2007, Education’s ability to target technical 

assistance is also limited in that the annual performance reports used to 

obtain feedback about program improvements may discourage candor 

because the reports identify grantees and are used to make continued 

funding decisions. The department also does not readily use the feedback 

it obtains from grantees to improve the programs. In 2004, we 

recommended that Education use appropriately collected feedback from 

grantees to target its technical assistance. While Education agreed with 

the recommendation and officials said they were considering ways to 

obtain feedback separate from the annual performance reporting process, 

Education continues to rely on these reports to obtain feedback. 

Education has separate feedback mechanisms in place to measure 

customer satisfaction and gauge the need for program improvement for 

some of its other programs.26 One senior Education official said the 

current process for obtaining feedback is adequate for assessing the needs 

of Title III and V grantees. However, our review of the annual performance 

reports that fiscal year 2006 grantees submitted found that only 22 p

provided feedback. Additionally, a representative from the contractor 

responsible for compiling information from the reports said that the 

narrative data—where feedback from grantees can be found—is not 

ercent 

 

26Education has collected customer satisfaction data for selected grant programs and 

federal student aid programs through the American Customer Satisfaction Index to use in 

decision making for program improvement. 

Page 35 GAO-09-309 Low-Income and Minority Serving Institutions
 

summarized for Education. The 113 grantees that provided feedback in 

these reports made a number of suggestions for improving the program, 

including requests for improved communications from Education, 

consistency in timing of events and reporting requirements, re-establishing 

annual conferences for grantees, and clarifying program regulations. For 

instance, Education has posted program regulations on its Web site, but 61 

of 113 grantees that provided feedback specifically requested that 

Education clarify the regulations. 

Given the current challenges low-income and minority serving institutions 

face, and the projected growth in the college-age population, Title III and V 

funds will continue to play an integral role in helping these institutions 

address some of their most critical needs. Because these institutions have 

limited resources, they may need additional assistance to successfully 

implement their grant projects. Education’s role in monitoring and 

providing assistance to Title III and V grantees is critical to ensuring that 

the substantial investment the federal government makes in these 

programs leads to improvements in institutional capacity and student 

outcomes. When we reviewed the management of these programs in 2004 

and 2007, Education had begun several initiatives to improve its 

monitoring and assistance. However, many of these initiatives never 

achieved their intended purpose or remain unfinished. Education has 

made progress in developing tools, such as an electronic monitoring 

system and risk-based criteria, to assess potential risks associated with 

Title III and V grants, but it lacks a comprehensive risk-based monitoring 

and technical assistance approach to target its efforts. Previously, we 

recommended that the Secretary of Education take steps to ensure that 

monitoring and technical assistance plans are carried out and targeted to 

at-risk grantees and the needs of grantees guide the technical assistance 

offered. At the core of such an approach, which Education has not fully 

implemented, would be plans to guide its monitoring and technical 

assistance efforts following a thorough assessment of the risk and needs 

of grantees. Such an approach would also ensure that more information is 

shared among grantees about common implementation challenges and 

successful projects to better leverage the considerable federal investment, 

and ensure that grantees have an opportunity to provide feedback on areas 

for program improvement. Additionally, Education has not adequately 

addressed skill gaps that limit the ability of program staff to carry out 

monitoring and technical assistance. Consequently, Title III and V funds 

continue to be at risk for fraud, waste, or abuse. The internal control 

weaknesses and questionable expenditures we identified at certain 

grantees we reviewed demonstrate the importance of having a strong 

Conclusions 

Page 36 GAO-09-309 Low-Income and Minority Serving Institutions
 

monitoring and assistance program in place. In an environment where 

Education is called on to administer additional programs with limited 

resources, a coordinated approach to guide its efforts is critical to 

ensuring that grant funds are appropriately spent and the needs of 

grantees are met. 

We recommend that the Secretary of Education take the following five 

actions: Recommendations for 

Executive Action • Develop a comprehensive, risk-based approach to target grant monitoring 

and technical assistance based on the needs of grantees. In doing so, 

Education should take steps to ensure that all available tools, including its 

electronic monitoring system, risk-based criteria, site visits, and grantee 

annual performance reports, are fully integrated to better target its limited 

resources. 

• Follow up on each of the improper uses of grant funds that were identified 

in this report. 

• Provide program staff with the necessary training to fully carry out 

monitoring and technical assistance responsibilities. 

• Disseminate information to grantees about common implementation 

challenges and successful projects to leverage the investment that has 

been made across the programs. 

• Develop appropriate mechanisms to collect and use feedback from 

grantees. 

We provided a draft of this report to officials at the Department of 

Education for review and comment. In written comments, Education 

agreed with our findings and recommendations. Officials indicated that 

they have begun to undertake a number of corrective actions to respond to 

these recommendations, such as convening a task force to better 

coordinate program resources toward grantees most in need of monitoring 

and/or technical assistance. Officials also agreed to provide additional 

training to new and existing program staff, reinstitute the annual Title III 

and V project director’s meeting in an effort to better disseminate 

information about the program and successful grants, and implement an email address that grantees can use to provide feedback. 

Agency Comments 

Page 37 GAO-09-309 Low-Income and Minority Serving Institutions
 

Reinstituting the annual Title III and V project director’s meeting is an 

important step in strengthening Education’s technical assistance for 

grantees, but it will be important for Education to develop an approach for 

disseminating key information to grantees on a more routine basis than 

annual meetings. Additionally, Education’s plan to provide grantees with 

an e-mail address that is monitored by staff outside the program office 

may encourage grantees to provide more candid feedback. However, 

unless Education develops an approach to systematically collect and use 

the feedback, it may miss opportunities to further improve its oversight 

efforts. Education also provided technical comments, which we 

incorporated where appropriate. Education’s comments appear in 

appendix IV. 

As arranged with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

issue date. At that time, we will send copies of this report to relevant 

congressional committees, the Secretary of Education, and other 

interested parties. The report will also be available at no charge on the 

GAO Web site at http://www.gao.gov. 

If you or your staff have questions about this report, please contact me at 

(202) 512-7215 or scottg@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made key contributions to this report are 

listed in appendix V. 

Sincerely yours, 

Director, Education, Workforce, and 

ty Issue 

George A. Scott 

 Income Securi

Page 38 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix I: Objectives, Scope, and 

Methodology 

Page 39 GAO-09-309 

Appendix I: Objectives, Scope, and 

Methodology 

We reviewed Title III and V grants programs to determine (1) what are the 

characteristics of institutions eligible to receive grants under Titles III and 

V, including the characteristics of students served, (2) what challenges do 

grantees face , and how have they spent Title III and V funds to address 

these challenges, and (3) to what extent does the Department of Education 

(Education) monitor the financial and programmatic performance of Title 

III and V grantees, and use this information to target its technical 

assistance. 

To describe the characteristics of postsecondary institutions eligible to 

receive grants under Titles III and V, we analyzed 2006 data on 2-year and 

4-year public and private, not-for profit institutions from Education’s 

Integrated Postsecondary Education Data System.1

 Historically Black 

Colleges and Universities and Tribal Colleges that receive formula grants 

through Title III were automatically included in our eligible population. To 

determine the number of institutions eligible for discretionary grant 

programs under Title III and V, we identified postsecondary institutions 

that had low educational and general expenditures and enrolled more Pell 

grant recipients, as compared to comparable institutions. To determine 

eligibility for specific types of grant programs, we also analyzed racial and 

ethnic data for students enrolled at eligible institutions. Eligible 

institutions reporting Hispanic student enrollment of 25 percent or more 

were categorized as Title V eligible. The 2,283 institutions that did not 

meet any of the criteria mentioned above were categorized as ineligible for 

participation in the Title III and V grant programs.2

We also analyzed data from Education’s 2004 National Postsecondary 

Student Aid Study (NPSAS), the most recent year for which data were 

available, to provide insight into student characteristics. Because NPSAS 

data are based on a representative sample of students enrolled in 

postsecondary education it does not include the universe of institutions as 

reported in Integrated Postsecondary Education Data Systems (IPEDS). 

As a result, it is not possible to discuss the NPSAS data in terms of eligible 

and ineligible institutions as can be done with IPEDS data. Instead, when 

 

1

Because participation in Title III and V programs is restricted to public and private not-forprofit institutions, for-profit institutions are not included in our analysis. 

2

Decisions institutions with branch campuses make about whether to report their 

Integrated Postsecondary Education Data Systems data separately for each branch campus 

or in the aggregate for an entire system of campuses may have resulted in the number of 

eligible institutions being underestimated in this report. Branch campuses may apply for 

the Title III and V programs if they independently meet the eligibility criteria. 

 Low-Income and Minority Serving Institutions 
Appendix I: Objectives, Scope, and 

Methodology 

discussing NPSAS data, we refer to minority serving and non-minority 

serving institutions. While only Historically Black Colleges and 

Universities, Hispanic-serving institutions, and Tribal Colleges are 

classified as minority serving institutions for NPSAS, these data are the 

most complete source of information on the characteristics of students 

attending minority serving institutions. To determine the completeness 

and reliability of this data, we reviewed the documentation from the 

National Center for Education Statistics on how the data were collected, 

interviewed Education officials responsible for handling the data, and 

performed electronic tests to look for missing or out-of-range values. 

Based on our reviews and tests, we found the data sufficiently reliable for 

our purposes. 

To describe the challenges that grantees face and how they used grant 

funds to address their challenges, we reviewed a representative sample of 

grant applications, all electronically submitted annual performance 

reports, and interviewed officials from 27 Title III and V grantees. 

Specifically, we conducted a content analysis of grant applications using a 

representative sample of 78 of the 511 fiscal year 2006 grantees, allowing 

us to generalize our findings to the entire population of grantees (see table 

9.). 

Table 9: Number of 2002 to 2006 Applications Reviewed during Content Analysis 

Grant program 

Total number 

of grantees 

Sample size 

and total 

cases 

reviewed

Title III, Part A, Strengthening Institutions 222 20

Title III, Part A, Tribal Colleges 27 14

Title III, Part A, Alaska Native Institutions 10 5

Title III, Part A, Native Hawaiian Institution 9 5

Title III, Part B, Historically Black Colleges and 

Universities 

97 16

Title V, Part A, Hispanic Serving Institutions 146 18

Total 511 78

Source: GAO calculations based on Department of Education data. 

We stratified our sample by the six programs and, within these strata, 

randomly selected grantees. Our sample was statistically drawn and 

weighted so that we could generalize the results of our review across 

programs. As with all samples, our review of grant files is subject to 

sampling errors. The effects of sampling errors, due to the selection of a 

Page 40 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix I: Objectives, Scope, and 

Methodology 

sample from a larger population, can be expressed as confidence intervals 

based on statistical theory. Sampling errors occur because we use a 

sample to draw conclusions about a larger population. If a different 

sample had been taken, the results might have been different. To recognize 

the possibility that other samples might have yielded other results, we 

express our confidence in the precision of our particular sample’s results 

as a 95 percent confidence interval. Each sample element was 

subsequently weighted in the analysis to account for all members of the 

population, including those that were not selected. 

In conducting our content analysis, we developed a code tree that 

consisted of potential challenges identified through our review of the 

literature and interviews with grantees and higher education advocacy 

groups. Two analysts independently coded each application, and then 

reconciled any differences in their analysis to ensure inter-rater reliability. 

To describe how Title III and V grantees used grant funds to address their 

challenges, we analyzed data from 503 of 511 fiscal year 2006 grantee 

annual performance reports that were submitted electronically. To 

determine the reliability of these data, we interviewed officials from 

Education and its contractor about limitations with the data collected and 

how its uses these data. We performed a number of data reliability checks, 

such as establishing frequency tables for certain variables to check for 

outliers and missing values. We also ran tests to check for out-of-range 

values for specific variables. Based on information about outliers provided 

by Education for a small percentage of these data (about 1 percent), we 

decided to keep data for all variables supplied by the department. As a 

result of our tests, we found these data to be sufficiently reliable for our 

purposes. 

To better understand the nature of grantee challenges and how Title III 

and V grant funds were used to address them, we also interviewed officials 

from 27 grantee institutions about the challenges they face and their 

experiences with the grant programs. We selected a nonprobability sample 

based on program participation, size of grant, and geographic location (see 

table 10). 

Page 41 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix I: Objectives, Scope, and 

Methodology 

Table 10: Summary of GAO Contacts with Title III and V Grantees 

Number of institutions 

contacted 

Grant program Location Site visit Interview

Strengthening Institutions North Carolina and 

Virginia 

3 0

Historically Black Colleges 

and Universities 

North Carolina, South 

Carolina, and Virginia 

3 0

Hispanic Serving Institutions New Mexico and New 

York 

3 4

Tribal Colleges New Mexico and 

Montana 

2 1

Alaskan Native Serving 

Institutions 

Alaska 0 3

Native Hawaiian Serving 

Institutions 

Hawaii 0 8

Total 11 16

Source: GAO. 

We also conducted a review of the literature to gain a better understanding 

of the challenges that specific types of minority serving institutions face. 

To determine how Education monitors and provides technical assistance, 

we conducted interviews with officials at Education and reviewed 

program requirements, policies, procedure manuals, and monitoring plans. 

We also conducted additional site visits at seven Title III and V fiscal year 

2006 grantees to evaluate their fiscal policies and internal control policies 

and determine whether program funds were properly used. These 

institutions were selected using a nonprobability sample based on factors 

such as program participation, size of grant, and geographic location. The 

grantees selected were located in California, Illinois, Maryland, North 

Dakota, Puerto Rico, Tennessee and Texas. Our grantee site reviews were 

limited in scope and were not sufficient for expressing an opinion on the 

effectiveness of grantee internal controls or compliance. 

Page 42 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix II: Institutional and Student 

Characteristics, by Program Eligibility Status 

Eligible Ineligible 

2-yr 

public 

2-yr 

private, 

not-forprofit 

4-yr 

public

4-yr 

private, 

not-forprofit Total

2-yr 

public

2-yr 

private, 

not-forprofit 

4-yr 

public

4-yr 

private, 

not-forprofit Total

Institutional resources (median $ per student) 

Endowment $273 $2,125 $1,251 $6,610 $1,069 $287 $2,781 $2,623 $20,391 $5,451

Tuition and fees 2,163 8,055 4,005 11,826 3,687 2,183 10,868 5,445 19,455 6,952

Institutional expenditures (median $ per student) 

Instructional 

equipment $1,276 $2,417 $3,648 $5,909 $2,177 $1,288 $3,405 $4,747 $8,118 $4,690

Academic 

support 449 780 1,065 1,318 675 490 846 1,414 1,916 1,163

Institutional 

support 862 2,778 1,642 3,922 1,402 901 3,100 1,697 4,665 2,463

Student services 568 1,623 993 2,185 878 595 1,341 1,106 3,192 1,495

Open admission (% of institutions) 

Yes 96% 49% 29% 28% 60% 95% 33% 9% 10% 34%

No 4 51 71 72 40 5 67 91 90 66

Offers remedial services (% of institutions) 

Yes 100% 85% 88% 78% 90% 99% 67% 74% 62% 75%

No 0 15 12 23 10 1 33 26 38 25

Average 

undergraduate 

enrollment 5,995 497 7,712 1,552 4,595 5,870 291 9,199 1,956 4,575

Race/ethnicity (% of students) 

African American 16% 16% 22% 24% 18% 11% 13% 8% 8% 9%

Asian 7 8 6 3 6 6 3 7 5 6

Hispanic 19 15 25 29 22 11 15 6 6 8

Native American 1 7 1 1 1 1 -- 1 1 1

Total minority 43 46 54 56 48 30 30 22 29 24

White 56 54 45 41 51 70 70 76 68 75

Other 1 1 3 1 -- -- 2 3 1

Gender (% of students) 

Male 41% 34% 42% 38% 41% 42% 37% 46% 43% 44%

Female 59 66 58 62 59 58 63 54 57 56

Part-time 

attendance 62% 34% 29% 22% 48% 62% 28% 19% 17% 34%

Appendix II: Institutional and Student 

Characteristics, by Program Eligibility Status 

Page 43 GAO-09-309 Low-Income and Minority Serving Institutions 
Appendix II: Institutional and Student 

Characteristics, by Program Eligibility Status 

 Eligible Ineligible 

2-yr 

public 

2-yr 

private, 

not-forprofit 

4-yr 

public

4-yr 

private, 

not-forprofit Total

2-yr 

public

2-yr 

private, 

not-forprofit 

4-yr 

public

4-yr 

private, 

not-forprofit Total

Age at time of first enrollment 

Under 18 7 2 4 3 5 6 2 2 2 4

18 to 24 51 51 70 64 58 53 65 80 77 69

25 or older 42 47 26 34 37 41 33 18 21 27

Financial aid (% of students receiving) 

Pell grants 41% 58% 43% 48% 44% 33% 40% 23% 23% 15%

Federal grant 

aida

50 68 53 67 54 33 39 23 22 25

Retention rate 55% 49% 67% 65% 60% 56% 67% 74% 75% 69%

Graduation rate 20% 39% 40% 38% 39% 22% 59% 56% 67% 60%

Source: GAO analysis of 2006 IPEDS data and 2006 to 2007 Pell Grant recipient data. 

a

Federal grant aid reported in IPEDS captures data for first-time, full-time students only. 

Page 44 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix III: F

Grantee 

iscal Year 2002 to 2005 

Expenditures by Focus Area 

Page 45 GAO-09-309 

Appendix III: Fiscal Year 2002 to 2005 

Grantee Expenditures by Focus Area 

Figure 7: Fiscal Years 2002 and 2003 Grantee Expenditures, by Focus Area 

Total expenditures, by focus area, fiscal year 2003

grantees

Percentage of fiscal year 2003 grantees undertaking at least one activity, by focus area

0 20 40 60 80

34

66

69

35

7%

19%

41%

32%

7%

19%

42%

32%

Percentage of fiscal year 2002 grantees undertaking at least one activity, by focus area

0 20 40 60 80

32

64

67

33

Source: GAO analysis of Department of Education annual performance report data.

Fiscal stability

Institutional management

Student support

Academic quality

Total expenditures, by focus area, fiscal year 2002

grantees

Note: Due to rounding, totals may not add to 100 percent. 

 Low-Income and Minority Serving Institutions 
Appendix III: Fiscal Year 2002 to 2005 

Grantee Expenditures by Focus Area 

Figure 8: Fiscal Years 2004 and 2005 Grantee Expenditures, by Focus Area 

0 10 20 30 40 50 60 70

29

60

63

27

0 10 20 30 40 50 60 70

30

64

66

33

7%

19%

41%

33%

7%

38% 21%

34%

Total expenditures, by focus area, fiscal year 2004

grantees

Total expenditures, by focus area, fiscal year 2005

grantees

Percentage of fiscal year 2005 grantees undertaking at least one activity, by focus area

Percentage of fiscal year 2004 grantees undertaking at least one activity, by focus area

Source: GAO analysis of Department of Education annual performance report data.

Fiscal stability

Institutional management

Student support

Academic quality

Page 46 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix IV: Comments from the Department Appendix IV: Comments from the of Education 

Department of Education 

Page 47 GAO-09-309 Low-Income and Minority Serving Institutions 
Appendix IV: Comments from the Department 

of Education 

Page 48 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix IV: Comments from the Department 

of Education 

Page 49 GAO-09-309 Low-Income and Minority Serving Institutions
Appendix V: 

A

GAO Contact and Staff 

cknowledgments 

Page 50 GAO-09-309 

Appendix V: GAO Contact and Staff 

Acknowledgments 

George A. Scott, (202) 512-7215 or scottg@gao.gov

Debra Prescott (Assistant Director) and Carla Craddock (Analyst-inCharge) managed this assignment. In addition, the following individuals 

made important contributions to this report: Susan Aschoff, Jenna Aurand, 

Carolyn Boyce, Muriel Brown, Sunny Chang, Alisha Chugh, Bonnie Derby, 

Lauren Fassler, Doreen Feldman, Jeanette Franzel, Alice Feldesman, Lisa 

Galvan, Jeremie Greer, Melissa Jaynes, Angela Leventis, Sheila McCoy, 

John Mingus Jr., Lauren Mohlie, Mimi Ngyuen, Dae Park, Susan Ragland, 

Glenn Spiegel, Sabrina Springfield, Nicholas Weeks, and Doris Yanger. 

 Low-Income and Minority Serving Institutions 

GAO Contact 

Staff 

Acknowledgments 

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